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A striking exhibition by Nedbank in ‘Africa’s richest square mile’ shines a spotlight on how consumerism and debt are hindering SA’s vital economic growth

 A striking exhibition by Nedbank in ‘Africa’s richest square mile’ shines a spotlight on how consumerism and debt are hindering SA’s vital economic growth
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An eye-catching live exhibition by Nedbank drew the attention of South Africans to the dangers of unchecked consumerism, overspending, and rising debt. More importantly, the street exhibition highlighted how simply making good money management choices is an effective way of addressing these issues and securing a better financial future.

 

The exhibition on Sandton Drive took the form of a pop-up display that asked consumers: would you blow it or grow it? It included four striking exhibits of the extravagant ways that many South Africans are tempted to spend their money, like splurging on a luxury car, a designer wardrobe or an expensive night on the town. The message was clear – while these lifestyle elements are fine if you have the money to pay for them, aspiring to a lifestyle that is beyond your means and gets you into debt, is never a wise decision.

The reasoning behind Nedbank’s hard-hitting message is not hard to see. An excessive reliance on credit is demonstrated by the TransUnion Q4 2020 South Africa Industry Insights Report, which found that South Africans currently have 7 million credit cards, 16,2 million clothing accounts, 2,3 million vehicle accounts, 6,7 million personal loan bank accounts and 5,7 million  personal loan non-bank accounts.

And over-indebtedness is not limited to low- or middle-income households. Experian’s Q4 Consumer Default Index reported that new default balances in Q4 2020 amounted to R18,26 billion, with the bulk of this being among the most affluent segments of the population. Wealthy households have outstanding debt of almost R600 billion, and the top 2,5% of South Africa’s credit active population was responsible for total new defaults on debt repayments of more than R4 billion. What’s more, up to 40% of consumers skipped retail store payments, and nearly 60% skipped personal loan payments.

 

Simultaneously, the household saving rate in South Africa decreased to 0,50% in Q4 of 2020 from 0,70% in Q3 of 2020.

 

Nobanda points out that, while there is nothing inherently wrong with debt and consumption – they are key drivers of growth – we, as South Africans, undoubtedly need to address some of the deeply ingrained money habits and attitudes within our culture that are hindering us to achieve long-term wealth creation.

‘Rampant consumerism at a large scale is unsustainable. As the bank that takes money seriously, we support South Africans in improving their financial positions, and helping to rebuild commerce, and the broader economy, in South Africa sustainably.’

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