South Africans are bracing for another challenging year in 2018, as the country continues to face low economic growth, low confidence, high rates of unemployment, and political uncertainty.
The latest BankservAfrica Transactional Index (BETI) showed that, despite November being one of the biggest months for transactions (with Black Friday and Cyber Monday driving consumer spending), overall economic activity was flat.
Coupled with disposable income data, the picture that is being painted is pretty clear: South Africans simply don’t have much money to spend.
2018 also holds some nasty surprises in store, with an expected ratings downgrade in February, as well as a host of new taxes being implemented to try and fill a multi-billion rand hole in the national budget.
With belt-tightening a cert for the new year, a recent BusinessTech poll asked South Africans what they were most willing to cut from their monthly budget to save money in 2018.
The poll drew over 6,000 responses, reflecting the views of middle to high income South Africans, across the country.
In-line with the creeping economy, the cost of everything – from food, to movie ticket prices – have shot up in the last year, making even a small family trip to the mall a costly affair. The biggest portion of respondents were willing to let this go.
Meanwhile, government has clamped down hard on vices, with 2017’s sin tax raising the price of cigarettes and alcohol by 6.7% and 8.5%.
With 11% of the vote each (though differing by only 14 votes), respondents said that they would cut spending on domestic workers and gardeners, or on subscription services like DStv or Netflix.
The former is particularly notable as South Africa is getting ready to adopt a national minimum wage, which could impact employment in the domestic worker sector.
There are currently around 1 million domestic workers employed in the country. For 2016/17, the minimum wage for domestic workers was set between R2,205 and R2,422 a month – or between R9.30 and R11.50 an hour.
Under the new national minimum wage, domestic workers should get paid R15 an hour, which could work out to be the range of R2,700 to R3,000 a month. For a significant number of South African homeowners, this may become unsustainable in the tough economic times ahead.
The other two categories which drew notable numbers are clothes and shoes, as well as holiday and travel, which 10% and 9% of South Africans said they were most willing to cut to save money.