New financial challenges South Africans should get ready for in 2019
A happy 2019 to one and all! At Libertine Consultants, we are very excited about the year ahead. Our hope is that we will go on to help as many overindebted South Africans as possible to overcome their financial struggles, so they may lay the groundwork for a more prosperous future. Are you wondering what you should be doing to safeguard your livelihood and make sound financial decisions in 2019? Here are a few financial challenges that are coming our way in the year ahead:
Increased repo rate = SAVE
The South African Reserve Bank raised the national repo rate by 25 basis points from 6.5% to 6.75% in November. The repo rate is the benchmark interest rate at which the central bank lends money to other banks. Changes in this rate affect the prime lending rate, which is the rate banks use as a starting point to calculate interest rates for their clients. As such, individuals who are paying off loans will have to contend with a hike in the rate of monthly repayment. The rate is also likely to rise again later in 2019, so it is imperative to trim the fat on your household budget as much as possible, so you are able to absorb these costs comfortably.
A recurrence of drought could affect food prices
While the severe water restrictions in the Western Cape has been relaxed somewhat after a good rainy season, we are not out of the woods where the drought cycle is concerned. It is more than just a once-off occurrence. Climate change is a reality, and it affects our food growth potential across the agricultural sector. Food prices are likely to remain high and increase as water becomes scarcer. Plan your meals ahead, shop intelligently, and plant a food garden if possible. There is no more room for waste.
Ongoing reckless lending
Reckless lending is rife in South Africa. As consumers, we need to be aware that just because a financial institution or service provider is willing to provide us with a line of credit, it doesn’t mean it’s a good idea to overextend ourselves in this way. The National Credit Act No. 34 of 2005 first introduced the concept of reckless credit or lending in South Africa. The Act aims to promote responsible credit granting and use, and for that purpose prohibits reckless credit granting by credit providers. Don’t go into debt in 2019 if you can avoid it. If you feel that you have already been the victim or reckless lending practices, get in touch with a debt counsellor who can assess your situation.
These are a few of the most prominent challenges South African consumers are going to face in 2019. Keep an eye on the blog in coming weeks and months as we share more valuable insight into the country’s financial landscape and what you can do to ensure that you pave the way for prosperity throughout the year ahead.
In the meantime, feel free to reach out to a Libertine Consultants representative to learn more about our credit services and debt services – we are here to help.
