DEEPLY indebted consumers, who collectively owe about R1.44 trillion, will get some relief when the petrol price drops 67c at midnight today.
Neil Roets, the chief executive of one of South Africa’s largest debt management firms, Debt Rescue, said yesterday that there had been a steady decline in the ability of indebted consumers to repay their loans.
The decrease in the fuel price would help many South Africans who had been pushed into poverty by a variety of increases over the past months, including an 8 percent hike by Eskom in the cost of electricity, the 0.75 basis point increase in the repo rate this year, and an above-inflation rate increase in the cost of basic necessities such as food, Roets said.
Dawie Roodt, the chief economist at Efficient Group, was delighted with the petrol price decrease and said it would bring welcome relief to hard-pressed consumers.
“It is definitely going to put a few extra rands in the pockets of consumers.
“Now would be a good time to pay off outstanding debts and try to build up a nest egg for a rainy day,” he said.
Reckless lending has been brought into the spotlight by the recent failure of African Bank.
Wikus Olivier, a debt counsellor at DebtSafe, said a major part of the decline of South Africa’s credit health was due to the boom in unsecured, and often reckless, microlending.
“Years of reckless lending practices have resulted in many consumers becoming over-indebted and unable to keep up with their repayments due to a number of social and economic factors,” Olivier said.
He said that when the credit amnesty took place, much of the important information about the payment history of individuals was removed, meaning the same indebted consumers now stood the chance of gaining access to even further credit despite their inability to settle their existing accounts on their current income.
Mine Restoration Investments, the penny stock that listed on the JSE’s AltX in 2012, could be suspended at a time when it expects its newly commissioned coal briquetting project to boost revenue.
Yesterday, the JSE flagged how Mine Restoration had failed to submit its annual report for the year to June within the six-month prescribed period.
As a result it could be suspended or terminated from trading on the exchange if it failed to submit its annual report by September 30, the JSE said.
Mine Restoration’s newly appointed chief executive, Richard Stait, is confident it will meet the September 30 deadline. He told Business Report that financial headwinds had necessitated a delay in the company’s audit.
Stait also said the company would make an announcement within 24 hours on the coal briquetting project. Mine Restoration was established in a bid to clean up the acid mine water in gold mines on the Witwatersrand.
At the time of listing, Mine Restoration sets its sights on clinching a multimillion-rand tender from the government, which has yet to materialise.
There is no doubt that shareholders are disappointed after investing a lot of money in the acid mine drainage project.
Mine Restoration impaired more than R40 million. It was also unable to pay a R20m loan from the Development Bank of Southern Africa and it wanted to terminate its liability to the debt.
Fortunately for Mine Restoration, its coal briquetting project focuses on exploiting coal beneficiation opportunities. It is involved in a project at Keaton Energy’s Vaalkrantz colliery, where it produces coal briquettes through the processing of coal fines. Coal fines are an unwanted by-product in the coal mining industry.
Edited by Banele Ginindza. With contributions from Wiseman Khuzwayo and Dineo Faku.