Publications
Partners
Overall, South Africans are feeling the pinch from big business to the man in the street. But in how many different ways does this crisis affect the black emerging market?
Foshizi Black Consumer Insights Agency went into emerging townships of South Africa to investigate how the rising interest rates are impacting on the spending (and lives) of the emerging market. These were the findings:
1. Too broke to pay lobola: Those who managed to settle their lobola are opting for traditional weddings and not "white" weddings. This is because tradional weddings are not as expensive as "white" weddings. However, according to Themba Radebe (27), a Sales Representative from Benoni East Rand, his buddies who did not propose sooner, are saying they had planned to pay lobola at the end of this year but at the rate things are going in the economy, they don't think they will be able to pay lobola.
2. Free lunch at funerals: According to Zondi Mphake (27), times are hard, people no longer attend funerals for grieving and mourning their loved ones, instead some people now go to funerals because they know for sure they will get a decent plate of meal.
Attendance at funerals is being hit too – attending funerals of close family members is non negotiable but those of friends or very distant relations is given a second thought because of the cost of travel to and from the destination.
3. Stokvels in trouble: Dion Radebe (28) from Phiri, says because of the interest rates, he is no longer committed to the Stokvel group he belongs to. Thus, he has decided to invest on the JSE because he knows he can sell his shares anytime he wants. 54% of the respondents who are members to different Stokvel groups are complaining that members in their Stokvels are beginning to miss payments, which in turn impacts on their group's saving scheme.
4. Affecting shebeens: Mike Makamo (39), a sales director at Bonitas Medical Fund in Kibler Park, said as part of his routines, he'd usually visit Meisies Shebeen in Orlando East (Soweto) for a relaxing drink and catch up with friends after work. But nowadays Mike drives straight home after work and does not go to the shebeen on weekdays anymore, only on weekends instead.
This is not the only area in Alexandra, Soweto and Gululethu where the emerging market loves to meet for mogodu (tripe) on Monday nights. These hot spots are also affected by interest rates. "I stay in Mondeor, but every Monday night you'd find me at Bra Ben's Place eating mogodu," says Sbu Mgomezulu (22), account executive at a leading advertising agency.
5. Affecting family values: It is a known tradition that even when young black professionals have moved out of home, they still contribute by buying basic essentials for their parents. These may include groceries, paying electricity and phone bill, taxi fares or ensuring that some of their siblings are clothed and taken care off. But due to changes in the economy, priorities of the emerging market towards their extended families and parents are changing too. For example, Mr Tebatso (34), an IT specialist, says he used to stay with his parents in their four-room township home before moving out to live in a townhouse. "I used to buy my parents a R1000 groceries, but because of the state of affairs in SA, I buy R700 grocery for parents. A mere R300 makes a difference in my budget."
6. Bulk shopping is a hit: Ray Mthangala (31) is contemplating closing down his spaza shop because people are now buying in bulk from wholesalers like Makro and Jumbo Cash & Carry. "I no longer buy clothes from expensive shops like Bally Spitz and Markhams, I now settle for anything that looks good on me," says Ernest Tsese from Cadbury. He goes on to say his friends are opting to take their shoes to the shoemaker for repair instead of buying new shoes.
7. Let's make love, not a baby: Get used to seeing condoms and morning-after pills carried by teenagers. Our survey has revealed that teenagers are afraid to bring a child into this world because, as the 20-year-old call centre agent, Sheila, says, "We don't want to bring kids into the world with the current intrest rates and high petrol price."
Thabiso Majodina (34) used to buy Lovers-plus condoms but these days he settles for free government condoms because times are hard.
8. Affecting church: The emerging market has been seen donating large sums at churches before the rise on interest rates. This has since changed. "I used to donate R50 every Sunday at my church but now I donate R20," says Mrs Mnisi, a 60-year-old retired teacher from Noordgesig.
9. Motoring flops: Mgosana Phetla, a 35-year-old car wash entrepreneur from Orange Farm, is complaining that, after the motor dealers, they are the second-most hit by the interest rates in the townships. The emerging market are choosing to save their money and wash their own vehicles rather than drive them to a carwash.
Lerato Sengadi, a 25-year-old events coordinator, says she no longer takes her car for service as regularly as she supposed to. As an alternative, she takes it for service two months from the time it was due.
Mzamo Thabethe (37) is a Lenasia South taxi owner and says he used to buy genuine Toyota parts and tyres. Things have changed and he now buys pre-owned tyres on the streets corners and "fong kong" (fake) spare parts.
10. Yes to weekend TV: Spectators who used to frequent stadiums are saving up to buy TV sets to watch soccer from home. “It's cheaper,” says Kenny Vanas (40).
11. Walk to work: Lift clubs are not an option for those who can't afford to pay the new increased taxi fares. Caiphus (34) is a delivery truck driver, he says he used to catch his first taxi from where he stays in Diepkloof, and then he'd connect to another taxi in Baragwanath taxi rank that took him straight to Bryanston where he works. Nowadays, he no longer catches a taxi from home; instead he wakes up much earlier than usual to walk to Baragwanath taxi rank where he will catch a taxi to work.
12. Moving closer to work: "I used to stay in Orange Farm until I could not afford travelling under the new interest rates, hence I decided to move nearer to work in Randburg," says Wendy Yende (24), a bank teller from Snake Park.
13. Changes at home: Pascal Musibi from Dube no longer hires people to do his garden, he does it himself. Victor (18) who works as an insurance consultant says he cooks his lunch the night before and takes it to work the following day.
A 26-year-old taxi driver from White City said he never skipped paying papgeld for his two children, instead he finds himself paying half the amount he used to pay.
Then Richard Mukhari, a 29-year-old father of two boys, says the only thing that has changed due to interest rates is the money he gives his children when they go to school. "They no longer want the R7.50 I used to give them, today they want R10, they say the price of bunnychow has increased."
"I used to leave R20 every morning at home for my brothers who are unemployed to buy bread during the day," says Gwen Mahlatsi, but now she has to leave them R35 everyday for bread because the price of food is expensive today.
14. June-July is the season for tombstone unveilings: Now people don't have the money to do the tombstone unveilings which usually includes a cow, lots of food, catering, lots of alcohol, dressing up, tents, renting of buses and the cost of the tombstone itself.
15. The winter school holidays: saw fewer people going back home for family visits because of the costs of transportation.
How do interest rate hikes affect your everyday life?
