Windhoek — Expect this year's Christmas and New Year celebrations to be subtle for both individual consumers and corporate entities.

It is likely that during this festive season there would be fewer exchanges of traditional corporate gifts that range from silk ties, a selection of wine, and other corporate memorabilia.

In Croatia, which coincidentally attained its independence in 1991 like Namibia albeit being a European country, parastatals and state-owned corporations are not to hold festive season receptions or use funds for Christmas-related events or presents this year.

The instructions came from the government, which is trying to protect public funds, hence state-owned entities would not be allowed to dip into their funds even if it is to buy the chairman a miniature bottle of a single malt.

The situation is not any different for Namibia. The unbearable cost of living is having far-reaching implications on everybody be it the 'working class', the middle- or high-income earners.

Namibian economists and the financial analysts point that the year has generally been a "tough one", and the signs are prevalent as individuals and corporate institutions alike re-adjust their Christmas spending. The traditional corporate year-end functions for this year were less lavish and grandiose, and it is most likely that households would have spectacular family Christmas or New Year's feasts, because of a general over-leverage among many households.

Aggravating this year's financial problems is the 'biting off more than one could chew' habit by households, aggravated by this year's high inflation that eroded household cash flows to the extent that the little cash on hand can barely cover the usual prices of food and other luxurious items and habits that consumers indulge in.

"People have had to re-adjust their balance sheets, some living on overdrafts, throughout this year," said Daniel Motinga.

Household debt is money owed to financial institutions for mortgages, overdrafts, leases, instalment sales and credit cards. The household debt situation is not only restricted to Namibia. In South Africa, where the debt-counselling agency Credit Matters compiled a consumer debt report over a six-month period, found that statistically each South African owes about N$100000 in unsecured debts.

The study also found that among those struggling are consumers high earning brackets with the most affected being those between the age of 25 and 35 years and earning between N$8000 and N$12000 per month.

These young professionals could no longer afford their car instalments, mortgages and rentals, credit cards, personal and student loans, and utility bills. The situation is equally dire for families where parents have to foot additional bills of school and associated extramural fees on top of the normal household expenditures.

Further, the affluent people are not immune from the situation, as they are the most prone to the chew off more than one could bite habit.