Q: Hi Guys, It has come to my attention to really warn you as my friends and family of the current economic conditions we are facing in South Africa and the rest of the world. Yesterday I attended a Absa conference whereby Tito Mboweni was our guest speaker Tito Mboweni has made it clear to us that the worse is yet to come so we must tighten up our belt in terms of getting into debts before I start with the really figure he made an example to us that if a person goes to KFC to buy chicken using his Credit Card for an amount of R40 this implies that in the 6 months period you have bought the chicken for R72. Most of us did not know this but this is true and He gave us advise to STOP USING CREDIT CARDS AS REASON THAT YOU DON'T HAVE CASH. Never use credit cards for luxury things, use it for things that you really need. The real situation now we have this reports that we do for the reserve banks whereby we forecast the future using certain drivers and getting the economist analysis which is called Medium Term Plan for 2009-2011 its basically three year plan. 1. It shows that the interest rate will go up to 19% (currently we are at +-14.5%) from now up until 2010 just before the world cup. Good news after the world cup it will decrease. 2. The inflation (unemployment) will go up to 12% (currently sitting at +-6%) 3. The GDP (Basically your food staff) will increase by 15% I'm not sure what it sitting at now. 4. The petrol will also increase up to R13.78 per litre and diesel to R15.05 What causes this? If you want to know. 1. The political instability of the country (investor's perception of the new President of the country) 2 The scarcity of resources i.e. low output on gold, farming of rice etc 3 Lack of skills labour in the country 4. Unemployment To add to this on our March financial statement Absa profit has drop by 10% and as of the month of March Absa will repossess 700 houses in the country. Absa will employ about 1500 staff to work at collections department as our impairment of assets (bad debt) is increasing very fast. This has been approved by Exco so we are waiting for the appointment of the employee agent to recruit those staff. So expect more calls from "private numbers". My advice is for now and next year Do Not engage in installment sale transaction for no reason. you must really ask yourself do you really need that. So guys that was it with me hope you will take this changes into your budget for this year and next year. OK thanks T.I. I didnt actually check. Anyway its probably just the same old good advice our parents used to give us!! Ferrari man- ok well lets see how long this one lasts, I didnt check to see if someone else had posted it. I dont know why it got reported. Its nothing we dont already know, its not insulting or blaming anyone - just telling us to watch our debt. ALS yes apparently we are a nation of non-savers. SAGirl. I closed all my accounts when I got married and was just a co-signatory on my husbands accounts. Then I read a few finance books that say this is the WORST thing to do. Worldwide you need a credit record, so buy some clothing on your account, pay it off properly (over 3 months) and you will have a credit record. I now have a 32 day notice account in my name. I dont qualify for credit as a non-salaried housewife.
A: Save what? I think that most South Africans are using their cards to make ends meet anyway. Not for luxuries. Their budget is over the limit every month trying to juggle living costs. That projection spells doom with a capital D. It is discriminating and a disgrace that housewives are not considered credit worthy. Most of them have to do the month end budget anyway. What a stone age concept! It makes my blood boil. Would the stalker of Ferrari man please stop it.