Budget 2017: OPINION
KHANYILE NZUKUMA: Caught in a debt trap
Somehow we have to broadly entrench the concepts of basic budgeting and planning which lead to personal financial wellness
For finance minister Pravin Gordhan, debt management is a huge problem. National debt servicing costs are R169bn for 2017 and they’re swallowing up an alarming amount of his budget. So he knows how most South Africans feel because, as individuals, we’re also drowning in debt. Only one in four of us have any money left at the end of the month. And 86% of adults borrow money (the highest level anywhere, according to a 2015 World Bank report). This level of indebtedness has a back story which is important to understand. Prior to 1994, the majority of the nation didn’t have access to formal lines of credit and lacked education regarding their use. After we achieved democracy, access to credit was opened across the board, with positive and negative consequences.
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