News in South Africa 26th February:

1. South Africans are poorer:

An analysis of household finances shows that real salaries have deteriorated in 2023, with South Africans going into more financial distress in the final quarter of last year.

South Africans are poorer
Photo by Timur Weber

This is according to Investec chief economist Annabel Bishop, who pointed to data from BankservAfrica that showed real salaries dropped significantly last year, down 4.7% year-on-year.

Toward the end of last year, this trend accelerated. In the last quarter of 2023, real take-home pay dropped 1.4% year-on-year and 3.7% quarter-on-quarter.

In addition, BankservAfrica’s Take-Home Pay Index decreased by 3.7% quarter-on-quarter in Q4 2023.

Lower real salaries dampened South African retail, with retail sales dropping 2.3% in October and 0.9% in November.

These factors, combined with high inflation, a weak rand, and more debt inquiries, point to South African households’ financial distress towards the end of 2023.


Inflation is largely to blame for low real income levels. December 2023 was the first month since August 2023, when take-home pay increases exceeded CPI inflation.

Accounting for inflation, however, December saw only a stabilisation in take-home pay, with no improvement in real terms.

The only months in 2023 when real take-home pay improved were July and August when inflation slowed temporarily.

Unfortunately, Bishop said real incomes will likely contract further in the first quarter of 2024. In addition, due to the usual start-of-year cost increases, CPI inflation remained elevated in January.

The South African Reserve Bank forecasted that CPI inflation would average 5.3% in Q1 2024 and drop only slightly to 5.1% in Q2.

Inflation will likely remain heightened until July when the first interest rate cuts of 2023 are expected.

Another factor hurting South African consumers in recent months has been the exchange rate, as the rand is still weak compared to its purchasing power parity value.

An undervalued rand also negatively affects the cost of fuel and food, meaning South Africans will have to spend more.

South Africans sought more debt rescue in 2023:

According to Debt Busters, there were 39% more debt inquiries in 2023 than in 2022, indicating that more individuals were facing financial distress.

This trend accelerated in the final quarter of 2023, with greater demand for debt management than in the same period last year.

Compared to Q4 2022, debt counselling inquiries increased by 46%, and online debt management increased by 54%. According to Bishop, this trend is expected to continue into 2024.

The debt burden is particularly concerning for lower-income earners, who tend to have a lower proportion of secured debt than more affluent households.

Notably, 56% of debt is unsecured for South Africans who take home R20,000 or less every month. For those earning over R35,000, this figure is 37%.

This debt disparity shows that poorer households are particularly vulnerable to financial distress in South Africa’s challenging economic environment.

2. Voting day finalised:

Important updates regarding the 2024 general elections have been published.

The Department of Home Affairs has officially declared May 29, 2024, as a public holiday in South Africa, and the Electoral Commission has published the election timetable.

The department processed the declaration made by President Cyril Ramaphosa, with the day of the public holiday coinciding with the date of the 2024 national election.

Ramaphosa announced the election date on 20 February 2024, but the date was only officially gazetted on Friday (23 February).

An election date is not automatically considered a public holiday, thus the additional gazette to that effect must also be submitted.

In addition to officially putting the election date on the calendar and making it a public holiday to ensure that all South Africans are free and available to vote, the gazetting of the date also marks the closure of voter registration.

The voters roll officially closed at midnight on 23 February.

What comes next:

The 2024 elections coincide with South Africa’s celebration of 30 years of freedom and democracy.

The Independent Electoral Commission has gazetted an extensive schedule outlining the series of events which will occur before, during, and after the elections.

The election timetable provides important dates, including the cut-off for political parties to submit candidate forms, potential voters to inform the Electoral Commission of voting abroad, and the dates of overseas and special voting.

Starting Monday (26 February), the voter roll will be available for inspection until March 4th. Any individual who wishes to raise objections must do so before this deadline.

For those who opt for a special vote, applications can be made between April 15th and May 3rd, with special voting scheduled to take place on May 27th and 28th, 2024.

If citizens residing abroad intend to vote at the embassy, they should notify the IEC by April 22nd.

Other important dates are:

  • 4 March – Cut-off date for objections to the provisional voters’ roll;
  • 8 March – Cut-off date for submission of list of candidates and parties;
  • 12 March – Cut-off date for chief electoral officer to certify the voters’ roll;
  • 10 April – Final candidate and party list contesting in the election to be presented following the objection process;
  • 17 – 18 May – Special voting at foreign missions (07h00 – 19h00);
  • 27 – 28 May – Special voting to take place (09h00 – 17h00);
  • 29 May – Official voting day.

3. Debt ceiling needed:

Budget 2024 announced last week underlined the poor fiscal state the government finds itself in, and the dipping into the Gold and Foreign Exchange Contingency Reserve Account to the tune of R150 billion is concerning, as it seems to be the only remaining pot of gold the government has access to.

Although it is common for countries worldwide to use foreign exchange profits, withdrawals need to be used productively.

Using the R150 billion will provide temporary relief, but will be wasted if the core structural problems that caused the country’s debt to increase to the extent it has are not addressed effectively. Think electricity supply, logistics, corruption, and poor financial management of government, of state entities and local governments.

South Africa needs a legislative debt ceiling to limit the debt the country can absorb.

The investment group Charles Schwab highlights that only a few countries have such ceilings.

These include the United States, Denmark, Poland, Kenya, Malaysia, Namibia and Pakistan. The US and Denmark have absolute ceilings, which means their debt cannot exceed a certain amount. The other countries’ ceiling is a percentage of GDP.

Countries with debt ceilingsCeiling
USAA fixed amount of $31.4 trillion
DenmarkA fixed amount of $180 billion
PolandCapped spending to 60% of GDP
Kenya55% of GDP
Malaysia66% of GDP
Namibia35% of GDP (the current ratio is 72%)
Pakistan60% of GDP (the current ratio is 75%)
Sourced from Moneyweb

Apart from Denmark, it seems as if not many other countries stick to the ceilings, but it at least provides a target.

South Africa’s debt currently stands at around R5.2 trillion or 74% of GDP, and it is already unaffordable as one of every five rands of revenue is consumed by interest payments.

The debt is set to rise to R6.3 trillion by 2027, or 75% of GDP, and according to National Treasury, this is the level at which the ratio will stabilise before declining.

History suggests that it is unlikely.

In 2018, when Cyril Ramaphosa became president, South Africa’s debt was R2.3 trillion or 49% of GDP.

At the time, National Treasury foresaw it would stabilise at 53% in 2024, which was spectacularly missed.

4. Escaping greylisting:

Deputy director-general of Treasury Ismail Momoniat says that South Africa is expected to be removed from the greylist of the Financial Action Task Force (FATF) by June 2025, as per the predetermined timeline.

However, the FATF has pointed out that the country still needs to fulfil 17 out of the 22 required actions.

5. E-toll debt collection:

The Gauteng Provincial Government still plans to collect the e-toll debt from motorists.

Mampho Modise, deputy director-general of public finance at National Treasury, confirmed this in an interview with reporters last week, saying that the treasury had to look at the existing e-toll debt, and “Gauteng has agreed that that debt should and will be collected”.

Modise confirmed that she was specifically talking about the e-toll debt of motorists and not the Sanral debt for bonds issued to pay for the Gauteng Freeway Improvement Project (GFIP).

Modise said this is not a new agreement between National Treasury and the Gauteng Provincial Government but an agreement reached “in the past”.

“It took long because we had to understand the numbers, the implications and the timelines, but, for now, those agreements remain in place,” she said.

Asked how this debt will be collected from motorists, Modise said: “That would be between Gauteng and Sanral [SA National Roads Agency], and they are working on a process on how to do that.”

More confusion:

Modise’s comments will add to the widespread confusion that already exists over the scrapping of e-tolls on the GFIP.

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said any thoughts National Treasury has of Gauteng chasing motorists for their e-toll debt will be “quickly squashed, and there’s no ways it will happen because of the elections”.

Gauteng Premier Panyaza Lesufi said in his State of the Province Address last week that the formal process to switch off and delink e-tolls on the GFIP will begin on 31 March 2024.

Lesufi confirmed that meetings were held with all affected parties, including Minister of Finance Enoch Godongwana and Transport Minister Sindisiwe Chikunga, and “all of us have now reached an agreement that by 31 March 2024 the formal process to switch off and delink e-tolls will begin and e-tolls will be history in our province”.

However, Godongwana reportedly said in response to questions on the budget from MPs in parliament’s joint finance committees last week that Gauteng had not yet met the preconditions that would allow the e-tolls to be scrapped.

All information sourced from articles posted by: DailyInvestor, BusinessTech, Moneyweb, BusinessDay, and The Citizen.

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