Thursday, February 9, 2023 | Hungry and in debt: Fewer South Africans happy about financial... | Hungry and in debt: Fewer South Africans happy about financial conditions




Just over a third of South Africans lived in food-deprived households in late 2020 to early 2021.

Just over a third of South Africans lived in food-deprived households in late 2020 to early 2021.

  • Fewer and fewer people are happy about their financial conditions.
  • This was the case even before the cost of living started spiralling in 2022 or interest rates began to climb.
  • A survey by the FSCA and the Human Sciences Research Council shows that a third of people lived in food-deprived households in late 2020 going into January 2021.
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Only slightly more than a quarter of South African households were happy with their financial conditions in 2020, a significant decline from 37% in 2012. This is according to the latest South African Social Attitudes Survey (SASAS) conducted by the country’s financial regulator and the Human Sciences Research Council (HRSC).

The Financial Services Conduct Authority (FSCA) first conducted this survey with HRSC in 2012 and every year after until 2018. The aim of the survey is to measure financial literacy, gauge the financial vulnerabilities of different demographic groups, and check the financial resilience of South African consumers.

In 2020, only 27% of people polled were satisfied with their financial conditions. Only 6% were “extremely satisfied”.

An increasing number of South Africans struggled to pay their bills. In the lower-income group, 70% of people couldn’t cover all their monthly expenses. Overall, almost half the adult population (46%) said they’d run into a situation where their income did not cover all their living expenses in the past 12 months. Only 41% of adult South Africans had experienced this financial shortfall in 2013.

READ | Desperate South Africans turn to gambling, crypto as a third earn less than in 2019 – survey

The HRSC conducted a third of the interviews in early 2020 before the lockdown began. The other two-thirds of almost 2 700 adults interviewed met with the researchers in late 2020, going into early 2021. They were all face-to-face interviews.

In the cohort interviewed after the hard lockdown, 49% of respondents were dissatisfied with their current financial situation, and 45% didn’t have enough monthly income to meet their needs, thanks to the loss of jobs or reduced incomes.

“Just over a third lived in food-deprived households,” said SASAS coordinator Benjamin Roberts.

Others lacked necessities like clothing and basic household services, including clothing. The elderly and black African youth were the most affected. More people took additional credit to make ends meet, and a fifth of the adult population admitted to having “too much debt” at that point. Also, 21% found it “very difficult” to service their loans, despite the interest rate being at historical lows.

“With the inflationary context we’re in now, I think we’re going to see the financial strain coming through in this survey data increasing intensifying if there’s no improvement,” said Roberts.

The researchers also found that while more people have reported that the lockdown spurred them to save, the reality is different. In the SASAS, 72% said they saved at least some money during this period. But when researchers dug deeper, they found that 18% of those people “rarely” put money aside, and another 20% only managed to do so “sometimes”.

“So, the 28% that didn’t manage to save at all, it is probably realistically a little bigger if you include the 18% that was rarely able to save,” said Roberts.

READ | South Africans were buckling under debt pressure, even before the 75bps interest rate hike

Part of this increased financial vulnerability stemmed from the fact that less than half (46%) of South African adults said that they had a household budget. In 2017, this figure stood at 54%. SASAS also flagged a decline in financial knowledge among consumers since 2015, save for understanding interest rates.

SASAS used a quiz that required people to make mental calculations to gauge participants’ financial knowledge. When asked in interviews, people thought they had better financial understanding than their quiz results showed.

“So, that’s something that we are looking into. What’s going on in society? Why is knowledge waning rather than being reinforced with all the interventions that are happening?” said Roberts.

But the biggest problem is the deterioration in the country’s economic performance. Because of it, fewer people could rely on family members for help or find additional jobs. Dependency on extended family members – a phenomenon that used to be called “black tax” in South Africa – has increasingly spread to more households of different races.

“A lot of the resources present in family networks are being run down. So, it is creating a real challenge for people to lean on those networks,” said Roberts.

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