Bleak time ahead for consumers, warns Debt Rescue
Debt counselling company Debt Rescue says the latest hike in electricity prices could put consumers in a worse financial position than during the global financial crisis in 2008.
The National Energy Regulator of South Africa (Nersa) announced on Thursday that it has granted Eskom a tariff increase of 9.41% for 2019.
Debt Rescue’s Livhuwani Naledzani believes paying more for power will have a massive impact on both consumers and the country’s economy.
He says there has already been a marked increase in consumers approaching the company for debt counselling.
“An increase of almost 10% in electricity tariffs granted by Nersa, on top of the 4.41% already granted, is going to be a catastrophe. Not to mention the fact that we have major fuel price increases waiting for us down the road.”
Naledzani adds that almost half of all consumers are struggling to pay their debts and are likely to be behind in their payments.
The major debt culprits are credit and store cards followed closely by unsecured debt.
“We urge consumers to budget and approach debt counsellors because everything is going up. However, income stays the same,” says Naledzani.
Consumers who are overly-indebted can make use of the legally-binding system of debt review.
The system allows deeply indebted consumers to repay their debts over a longer period of time in smaller instalments, often at a discount.