Zululand economic stress levels on the rise
High inflation, unemployment and debt push up regional economic stress levels
INFLATION, unemployment and debt pressures are mounting in the South African economy – and Zululand is no exception to the rising ‘tension trend’.
This is according to economist Mike Schüssler in his latest report to the KZN Provincial Treasury.
Shockingly, he revealed that the KZN business barometer fell by 4% ending August – a third consecutive month of year-on-year decline, as well as being down on a month-on-month and quarter-on-quarter basis.
‘The main reason for the drop in the barometer, even as the KwaZulu-Natal economy is still growing, is the increase in economic stress levels in the province,’ stated Schüssler.
‘Civil debt cases were up by 35%, inflation accelerated to 6.4% and unemployment in KwaZulu-Natal stood at 23.2% compared to 20% a year earlier, increasing the strain on the province’s economy.
‘All of these factors are a strain on consumers’ pockets,’ warned Schüssler.
Specialised risk finance company Business Partners’ Richards Bay Area Manager, Thula Mkhwanazi, strongly agrees that the fiscal players have placed the regional economy in hot water.
‘Inflation is every consumer’s nightmare, because it means you buy less for every rand you have.
‘Throw in unemployment and you have a time bomb waiting to explode,’ says Mkhwanazi.
‘Business and industries have already tightened their belts which further compounds unemployment.’
Mkhwanazi believes infrastructure development in Richards Bay is the answer to help off-set unemployment in Zululand.
‘It is imperative to prioritise investment in infrastructure, which in turn will make Zululand a more attractive investment destination to foreign as well as domestic buyers.
‘Investment in high-impact projects like the port expansion would ensure that Zululand experiences lower stress index levels in coming months.
‘These projects have a knock-on effect on SMEs (small and medium enterprises) who ultimately employ a greater number of people and contribute greatly to the growth of the economy,’ Mkhwanazi said.
