26 February 2014

South Africa: Household Debt Concerning

Photo: South African Govt
Finance Minister Pravin Gordhan presenting budget speech.

Finance Minister Pravin Gordhan says government is concerned about the level of over-indebtedness of South African households.

"Cabinet has therefore approved a number of measures to assist such households reduce their debt burden and to stamp out abusive and fraudulent activities of reckless lenders and unscrupulous debt collectors," Minister Gordhan said.

"Working jointly with the Minister of Trade and Industry, we will jointly commence actions against abusive and unsustainable practices," he said.

The minister delivered his fifth Budget Speech on Wednesday, the last one for the current administration.

He said despite the rising consumer debt levels, there has been substantial progress in transforming South African households since 1994. The average income of South Africans had increased by over 30% and was expected to continue to rise in the year ahead.

More than 5.9 million jobs have been created by the economy since 1996. "Near-universal school enrolment and the steady increase in average years of education for men and women have improved the life prospects of millions of South Africans," said Minister Gordhan.

Access to basic services had improved rapidly across the country and more people than ever had access to housing, education and services. Black participation in the economy had expanded and there had been a transformation of the middle class.

"These are considerable achievements. But they are not enough. There are still fault lines that run deep in the social fabric of our communities and tendencies in the political landscape," Minister Gordhan said.

He said black economic participation remained incomplete. The economy needed to provide many more opportunities and the State needed to provide more support to enterprises and entrepreneurs. The structure of the economy also had to transform in order to meet the demands of a 21st century global economy and a fast evolving continent.

- SAnews.gov.za

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