South Africans forced to use credit to buy food

South Africa is grappling with a significant escalation in the cost of living, coupled with stagnant wages, leading to a distressing trend among households: the necessity of buying food on credit.

This was revealed in a recent Debt Rescue survey, which assessed the severity of the cost-of-living crisis on households.

“It is desperate out there,” said Annaline van der Poel, Chief Legal Officer at Debt Rescue, in an interview with Newzroom Afrika.

The survey revealed that many households are sacrificing fundamental requirements, including food, to afford other necessities such as electricity as winter approaches.

86% of survey respondents indicated that they have already started reducing their expenditure on groceries and transport to ensure they can keep the lights on.

This happened before the 12.7% electricity tariff hike that became effective for direct Eskom customers in April of this year.

Van der Poel emphasised the severity of the situation, noting that this is the second survey in the past year examining the impact of the cost of living, focusing on electricity.

In both surveys, a high percentage of respondents reported making changes to their dietary plans due to financial constraints.

Initially, this involved cutting back on the number of meals consumed daily. These meals still included essential foods.

However, the latest findings indicate an even more concerning development: households are now cutting out major, essential food items from their monthly budgets.

Van der Poel said that the inevitable consequence of this financial pressure is an increase in household debt.

While inflation has slowed, the Debt Rescue legal officers said it is crucial to recognise that it is still increasing, albeit slower.

“For the average household, income is not keeping up with that,” said van der Poel. “Debt is still at enormously high rates.”

This means that South Africans cannot make ends meet. They have no choice but to look at using credit to put food on the table.

The concern around buying food on credit is paramount because it entails consuming goods that have not been paid for.

This situation can lead to a cycle of debt with added interest over an extended repayment period.

The impact of these rising costs is particularly acute for vulnerable populations, such as those relying on social assistance grants like SASSA payments.

Increases in essential tariffs, such as electricity, can effectively negate any increases in these grants, leaving beneficiaries in an even more precarious financial position.

Ways to address this crisis

Van der Poel said that addressing this crisis requires a multi-faceted approach. From an individual perspective, meticulous budgeting is crucial, even though it may be an unpopular task.

By creating a realistic and honest monthly budget, individuals can identify areas where they may be overspending and explore potential cutbacks, such as unnecessary subscriptions.

When it comes to grocery shopping, consumers should actively seek out specials and discounts on essential items by reviewing community papers and comparing prices.

This requires discipline and careful planning to manage expenses within the limited control available to individuals.

For those with credit cards, it is strongly advised to significantly reduce their use, reserving them only for absolute emergencies when all other options have been exhausted.