Shoprite and indebted households taking strain in South Africa

Indebted households are a concern according to Pravin Gordhan, the Minister of Finance, who spoke in parliament yesterday for the 2014 budget speech.

Addressing parliament on the budget speech for the fifth time, Gordhan stated that growth in South Africa has been mundane due to the budget deficit of 4.8 percent of the GDP, or Gross Domestic Product. Gordhan however, predicts that the budget deficit will decrease to 2.8 percent of the GDP by 2016/17.

One of the hot topics on the agenda was the state of debt. Debt service costs took R114 billion of the allocated general public services budget. Gordhan stated that investment into people’s future was important, and the state of living from hand to mouth would need to be assisted and adjusted.

Consumers were not the only ones who were struggling due to financial restraints. Shoprite Checkers, who target the lower income market, have seen disappointing numbers in South Africa, possibly due to these high debts and interest rates affecting consumers.

Nadim Tompatien, a finance expert from 24/7 investments said, “Shoprite has seen the effects of slow business as their consumers in South Africa cannot afford to shop at the chain anymore, preferring the roadside stalls for their shopping needs”.

”The low income consumer is suffering under a mountain of debts, increasing interest rates and shedding of jobs.” stated Tompatien. “Over the past year, Angola’s 5 Shoprite stores have sold more Red bull than all of South Africa’s 380 Shoprite stores put together.”

J.W Basson, the CEO of Shoprite Checkers is looking to Africa for growth.

The purposed budget by Gordhan will offer respite to companies such as Shoprite and debt affected households by providing R9.3 billion in income tax relief to households. The government is also working on programmes in employment and is hoping to improve the situation in the next three years, stated Gordhan

Health, education and public order safety received the majority of the budget allocation. The fuel levy went up by 12 cents as was expected, whiskey will now cost R4.80 extra and cigarettes 68 cents more expensive. Grants were increased across the board and a hopeful Gordhan ended with, “We have achieved much over the past five years, in a very difficult post-recession climate. But there is more to do ahead, more to build, more to put right, more to learn, more to implement. We can only do this together.”

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Change of society

New registration online creates mixed feelings and low numbers for societies

A well-known society is reporting that currently they have received 50% of their total number of sign-ups compared to previous years. This could be attributed to the fact that Stellenbosch students who wished to sign-up for their favourite societies had to follow a new process to previous years.

Vera Leven, a SRC member and the Societies Council Chairperson speaks about the new online sign up procedure, “The new system was initiated by the finance department. The idea is to make signing up easier and more accurate, as students will only be able to sign up if they log in with their specific student number and can’t sign up for others. So far the feedback has been mostly positive and funds are made immediately available to societies.”

Societies and students however had varied feelings when it came to this new system. Benita van Eerden, a second year student who had just signed up online at the BTK stall said, “It was easy to register on the committee’s computer at the stall.” Van Eerden goes on to admit that she wouldn’t have signed up online if she didn’t sign up at the stall. “It just seems complicated and like too much effort, I would have gone home and forgot all about it”, said van Eerden.

Thousands of students squeezed through the Neelsie, the universities popular food court, from Monday to Wednesday last week. The society stalls set up in the court were offering students information on the respective committees offered.

Students who were interested would write down their email address as all the years before but students were then emailed a few days later with a number of hyperlinks to guide them to the actual registration process online. Payment and signing up would occur on this online system.

Marli Geldenhuys, chairperson of the PULP film society relates to the benefits of the online process, “The new system allows quicker processing of memberships. What would usually take months for registration and payments now happens instantaneously.”

Herman Brand, chairman of SPYS, Spirituality, Philosophy and Yoga Society of Stellenbosch, has a different outlook on the new system. “Online is the future yet students feel like it is too complicated or too much effort to log on and click a few buttons. We have been conditioned to put our name down somewhere and that would be all the effort required of us. Anything more than that is just too much time and effort.” said Brand.

Some societies took up the initiative and set up a computer at their stalls which proved more useful.

When asked about the future of sign-ups, Geldenhuys stated, “I feel that the fact that we are limited to online signups has made a negative impact on signups, but that in the long run, the new system is for the better.”