No escape from debt trap

Many South Africans are borrowing money simply to buy enough food to eat, according to the findings of a study commissioned by the country's major financial institutions and the national treasury.

Research Surveys, the marketing insights company that conducted the study, found that in the richest country on the continent, one in five South Africans do not have enough to eat, and one-third of black South Africans said they often or sometimes could not afford to eat properly.

"Most of these people have no income or earn less than R500 [about US$70] a month.

They do not have the money and often borrow money from friends and family to buy food," said Neil Higgs, director of Research Surveys. At least 17 percent of South Africans said they had no income at all, and nearly half of the more than 3,000 people interviewed said they sometimes or often went without a cash income.

South Africa, with a GDP per capita of $12,200, has one of the world's most unequal income distribution patterns. Jobs are hard to come by; the unofficial unemployment rate is estimated at around 40 percent, against the official unemployment figure of 25.6 percent.

At least 18 percent of respondents said they borrowed money to buy food, followed by 10 percent who borrowed to pay for a funeral, 9 percent who borrowed to pay school fees and 9 percent to cover medical expenses.

"I spend most of my salary on transport - at least R600 ($84) out of the R800 ($112.50) I earn every month - so I end up with only R200 ($28) to feed my four children," said Phumla Nzimande (not her real name), a casual worker at a leading food retail outlet in Johannesburg.

"I have no choice but to borrow money or look out for specials [discounted items] to feed the family."

Bheki Msimang (not his real name), employed as a waiter in a restaurant, said he earned about a dollar an hour and managed to make about $200 in a "good month - when I get good tips". But after deducting money for rent and transport, Msimang, who also supports his parents and pays for his siblings' schooling, is left with less than $100 a month.

"Sometimes I do not have enough to send back home - my mother has to borrow money from her neighbours," he complained.

"I manage on the food, as I work in a restaurant, but my family suffers."

More than 20 percent of participants identified their source of income as a relative or friend, followed by receiving a salary from a company (19 percent), a government child grant (11 percent) and wages they earned (9 percent). Labour unions and research organisations have often said that every worker in South Africa supports between five and 10 other people, mainly family members, due to the country's high jobless levels.

The death of a main breadwinner in the past 12 months affected 5 percent of adult South Africans, or 1.6 million people, and 8 percent reported having contributed to a family funeral in the same period.

South Africa has one of the world's largest populations living with HIV/AIDS - an estimated 5.5 million of South Africa's 45 million people are living with the disease.

Higgs said a basic income grant of R100 ($16) per person per month for every South African citizen, regardless of age or income level, remained the best option to help alleviate poverty.

Some nongovernmental organisations and the country's major labour federation, who have been lobbying for the grant, say around half of South Africa's population are poor.

But the government's welfare scheme - child grants, pensions, foster child support and disability payments - reach only 11 million people.

The South African government has maintained that it did not want to create a culture of dependency by giving people a basic income grant.

jk/he/oa