South Africans are in trouble

South Africans are still struggling with cost-of-living pressures, and new data shows they have less purchasing power than they did in 2016.

The most recent indication that South Africans are in trouble is that Easter spending took a hit this year, as more people scaled back on non-essential purchases due to the tough economic climate. 

This was highlighted by data from Standard Bank, which showed that even the traditionally busy March–April travel season failed to see significant consumer activity.

“Holiday and Travel remain one of the smaller spend categories for consumers,” said Shené Mothilal, Solution Owner of Digital Money Manager at Standard Bank.

“However, it’s been more erratic, likely because it’s one of the easiest areas to cut back on when money is tight.” 

Mothilal explained that while South Africans have always found ways to celebrate long weekends like Easter, many now approach them with greater caution. 

She said spending on necessities has taken priority. Categories such as transport and digital connectivity saw notable increases in April, partly due to service providers’ annual price hikes and increased road travel. 

“Transport and Digital Connectivity take up a sizeable share of consumer spending,” said Mothilal. “So, when prices go up, it makes sense that people cut back on other non-essential categories that were once more popular.”

This careful prioritisation is also evident in how people spend extra income like bonuses or 13th cheques. “This money typically goes toward necessities like groceries,” said Mothilal. 

“Wealthier South Africans tend to spend more on travel, but even that has seen slight declines and is generally more erratic, indicative of the tough economic climate and uncertainty that South Africans face.”

Charitable giving, once a seasonal priority, has also taken a hit. “We are seeing a declining trend in charity and donations over the past three to four years,” Mothilal added. 

“South Africans are making trade-offs on the more discretionary areas where they can.”

South Africans are poorer than they were nine years ago 

DebtBusters’ Q1 2025 Debt Index shows debt levels are climbing as consumers increasingly rely on personal loans to bridge the gap between income and expenses. 

Benay Sager, executive head of DebtBusters, said this trend is worrying. “It’s clear that personal loans, especially one-month loans, remain a lifeline for many, because income has not kept pace with rising expenses.”

The Index found that 91% of consumers who applied for debt counselling had a personal loan—a new record—while 37% had payday loans. 

Sager said that over the past nine years, electricity tariffs have increased by 135%, petrol has gone up by 88%, and cumulative inflation sits at 52%. 

“Consumers who applied for debt counselling now need 69% of their take-home pay to service debt,” he said. “This is the highest level since 2017.”

The burden is not limited to low-income earners. Those earning R35,000 or more spend an average of 77% of their income servicing debt, the highest figure recorded by DebtBusters. 

Even consumers taking home less than R5,000 per month are using 76% of their income to manage debt.

The index also showed that, compared to 2016, consumers today are significantly worse off. According to Sager, purchasing power has declined by 53%. 

“Although inflation has recently eased, average nominal incomes are still 1% lower than they were in 2016,” he said.

Nominal incomes for top earners have risen 11% since 2016, the first meaningful growth in nearly a decade, but even they are not immune. 

Unsecured debt among this group has surged by 90%, far outpacing the 34% average increase across all consumers.

The data paints a bleak picture of South Africans being squeezed from all sides. Essentials like food, electricity, water, and transport now consume as much as 25% of disposable income after debt repayments. 

Lower-income households have faced even sharper inflation due to rising food prices, forcing many to drop insurance and other forms of cover just to get by.