2024 represents tough times in Mzansi’s informal economy, finds new report. Image: File
New report finds citizens participating in Mzansi’s informal economy are battling to access even basic necessities. Here are the stats …
2024 represents tough times in Mzansi’s informal economy, finds new report. Image: File
Defined narrowly as citizens who don’t pay tax to the South African Revenue Service (SARS), Mzansi’s informal economy is really struggling in 2024. According to TimesLive, half of adult South Africans in Mzansi’s informal economy are struggling to afford basics like food and electricity.
Of course, this gap will only worsen with Eskom’s recent 12.8% tariff hikes, and the fact that South African Social Security Agency grants are not keeping pace with inflation. The South African recently reported that consumer inflation in 2024 sits at roughly 6% and is therefore outpacing SASSA grant increases of just 4.8%.
Now, a new report by FinMark Trust reveals the pressing financial challenges of those in Mzansi’s informal economy. In 2024 there are fewer jobs and the number of low-income earners is only increasing.
Living expenses (groceries, energy, transportation and communication) account for 85% of monthly income:
Jabulani Khumalo, senior data and analytics specialist at FinMark Trust says it is ‘highly burdensome’ that more than 10% of household income goes towards energy. Therefore, two out of every five individuals reported their homes were without electricity this year.
Moreover, people stuck in Mzansi’s informal economy are relying on credit to pay bills:
Out of approximately 30-million adults in South Africa, 86% do not have a retirement plan or savings of any sort. Therefore, the uptake of medical assistance and retirement products has decreased from 17% to 12% in the last 20 years. Of which, funeral insurance continues to be the most popular type of insurance. 48% of the adult population hold such a policy.
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