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Cape Town - Debt, combined with the steadily rising cost of living are major reasons for protracted and bitter strikes, says Terry Bell in his latest Labour Wrap.
And, although it was introduced with the best of intentions, the National Credit Act (NCA) of 2005 probably made matters worse.
Bell points out that the NCA made access to credit more difficult for the low paid, driving them to the township loan sharks, the mashonisas whose interest rates and methods of debt collection he describes as “brutal”. The NCA also set the maximum rate for small loans - under R8 000 - at 60% per annum.
But it is not just the low paid who face problems. According to Bell we are “a nation wallowing in debt”. He notes that the only way the government manages to balance its books is through portfolio investment on the Johannesburg Securities Exchange (JSE). This is money that could disappear at the touch of a computer key and it adds to problems of indebtedness with dividends and profits flowing abroad.
Watch
Ordinary citizens do not have this cash flow facility and more than 10 million South Africans now have “impaired credit records”. They cannot access anything other than the mashonisas. This he sees as a recipe for more social instability and suffering and wonders if the unions that collectively control billions of rand, might have a remedial role to play.
Bell also pays tribute to Nadine Gordimer, a great supporter of the labour movement and the trade unions.
- Fin24
What do you think? Drop us an email if you have any thoughts on this sensitive issue, or if you have any other questions for Terry.
* Terry Bell is a political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.
And, although it was introduced with the best of intentions, the National Credit Act (NCA) of 2005 probably made matters worse.
Bell points out that the NCA made access to credit more difficult for the low paid, driving them to the township loan sharks, the mashonisas whose interest rates and methods of debt collection he describes as “brutal”. The NCA also set the maximum rate for small loans - under R8 000 - at 60% per annum.
But it is not just the low paid who face problems. According to Bell we are “a nation wallowing in debt”. He notes that the only way the government manages to balance its books is through portfolio investment on the Johannesburg Securities Exchange (JSE). This is money that could disappear at the touch of a computer key and it adds to problems of indebtedness with dividends and profits flowing abroad.
Watch
Ordinary citizens do not have this cash flow facility and more than 10 million South Africans now have “impaired credit records”. They cannot access anything other than the mashonisas. This he sees as a recipe for more social instability and suffering and wonders if the unions that collectively control billions of rand, might have a remedial role to play.
Bell also pays tribute to Nadine Gordimer, a great supporter of the labour movement and the trade unions.
- Fin24
What do you think? Drop us an email if you have any thoughts on this sensitive issue, or if you have any other questions for Terry.
* Terry Bell is a political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.
