Is the culture of ‘black tax' making it harder for young South Africans to save?
While government and the private sector continue to pour resources into educating South Africans about saving and managing debt, the reality is many consumers remain deep in debt and struggle to put money aside.
One factor often raised in the national conversation is the pressure of 'black tax', the financial support many young earners provide to their extended families.
For some this is a proud responsibility rooted in cultural duty. For others, it is a major obstacle to financial freedom.
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The Citizen
41 minutes ago
- The Citizen
BLSA welcomes approach to performance and accountability of municipalities
While South Africans worry about the state of our municipalities, the BLSA believes there is hope after meeting with the minister. After meeting with the Department of Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa, Business Leadership South Africa (BLSA) says that it welcomes his department's approach to municipal performance and accountability. Busisiwe Mavuso, CEO of BLSA says in her weekly newsletter that the performance of municipalities, particularly the metros, is a serious concern for business because they rely on effective services to operate, as well as for employees and customers to be able to function. 'Water and local electricity outages create chaos and directly affect economic output. Recent estimates suggest that municipal service failures cost the South African economy billions annually, with small businesses particularly vulnerable to extended power and water cuts that can force temporary closures and drive away customers.' She says this crisis demands urgent collaboration between government and business, which is exactly what happened when she met with the Association of South African Chambers (ASAC) from the main metros and Minister Hlabisa, last week, to discuss the lack of performance in local government. 'And I must say that I found the minister's approach refreshing and encouraging. He fully grasps the issues that plague the performance of municipalities, from skills shortages to fraying infrastructure. He has plans for municipal reform that are well-thought-through and realistic.' ALSO READ: Municipalities: It's time to hold mayors to account – AG Quick response to BLSA request for meeting on municipalities Mavuso says the minister quickly responded to her request to meet after she engaged with ASAC regarding the challenges that businesses face in the metros. 'He was very open to discussion and hearing ideas from business on what can be done. He described the work he will be doing with political parties to elevate the importance of selecting mayors in municipalities, a critical point of influence on performance.' She says a good mayor can appoint a good city manager who can appoint a good chief financial officer, and so on, and this is important to build professionalism and competence in local government. 'The minister has plans to meet with all political parties to discuss how mayors are selected and to support them in identifying the right qualities for the right kind of people. His department has developed a white paper to fix issues within local government, and the minister called on business and other stakeholders to give input into the paper. 'The minister was clear that unless we create a conducive environment for businesses and residents with reliable services, inequality will continue to grow in our communities. He was also clear on the role that corruption plays in undermining municipal performance. He is an advocate for learning from the best-performing municipalities and adopting best practices widely.' ALSO READ: 'Same story year after year': MPs unhappy as Auditor-General reveals local government audit outcomes Minister promised to meet with large municipalities to discuss improving performance As a result of their meeting, the minister committed to engage with some of the large municipalities to discuss how performance can be improved, including eThekwini, Johannesburg, Msunduzi and Nelson Mandela Bay over the next two months. 'At those meetings, we will agree on interventions required, deadlines and monitoring mechanisms and then we will reconvene to discuss how we can work together to support performance improvements. 'I found the engagement productive and invigorating. The government of national unity continues to prove that it is committed to co-creating solutions with business. It is a welcome change from the sometimes-adversarial encounters we used to have, driven by ideological postures rather than a focus on solutions. 'I look forward to working much more with the minister and his team to improve municipal performance,' she says. ALSO READ: Governance shortcomings at the root of service delivery problems Accountability and the criminal justice system Mavuso says last week was a good one for accountability and the criminal justice system, with the suspension of Andrew Chauke as director of public prosecutions for South Gauteng an important, though overdue, step forward to improve the performance of the National Prosecuting Authority. 'The arrest of Sandton businessman Katiso Molefe over links to several murders is a step toward ending impunity for criminals. 'President Cyril Ramaphosa also demonstrated further accountability at cabinet level with the replacement of minister of Higher Education and Training Nobuhle Nkabane, who is accused of misleading parliament over appointments to the boards of the SETAs. 'This followed the suspension a week earlier of police minister Senzo Mchunu over allegations that he meddled in police investigations over political assassinations.' She hopes this rash of accountability becomes an accelerating trend as we finally get a grip on criminality and corruption in both the public and private sectors. 'An effective police force, including crime intelligence as well as highly capable public prosecutors, is going to be critical to do that. ALSO READ: How political interference hollowed out Saps and NPA BLSA has been helping NPA and will continue to do so 'BLSA has long advocated for improvement in investigations and prosecutions and actively put resources behind it through Business Against Crime and our memorandum of understanding with the NPA to support it with technical skills to build its cases.' Mavuso points out that the challenges facing our criminal justice system remain profound, stemming largely from the systematic damage inflicted during the state capture era. 'The NPA, in particular, has been battling to overcome the serious erosion of its capacity that occurred when skilled investigators were purged and replaced with political appointees whose primary function was protection rather than prosecution. 'This deliberate undermining created what can only be described as a paradise for white-collar criminals, where the probability of facing consequences for economic crimes became negligible.' ALSO READ: Justice Department and NPA agree to collaborate on access to Zondo commission database Rule of law important for economic growth and investor confidence She emphasises that the rule of law is fundamental to economic growth and investor confidence. When contracts become unenforceable, when businesses must shoulder massive fraud and corruption costs and when criminal syndicates flourish to spawn extortion networks that strangle legitimate enterprise, the entire economy suffers. 'This is why the recent accountability measures are so crucial – they signal a potential turning point in our fight against the institutional decay that has plagued our country.' However, she points out, accountability at the top must be matched by sustained capacity building throughout the system. 'The NPA continues to face an unprecedented caseload of complex state capture prosecutions while simultaneously trying to rebuild its investigative and prosecutorial capabilities. 'This is precisely why private sector support remains essential. Through our MOU with the NPA, we can provide the forensic investigators, data analysts and specialised skills needed to build strong cases that will lead to successful prosecutions, all while ensuring the NPA's independence and integrity remain sacrosanct.'
IOL News
an hour ago
- IOL News
Understanding South Africa's reliance on foreign labour, and the way forward
In many sectors, particularly construction, infrastructure, and logistics, demand for specialised, high-risk or niche skills far outpaces local availability. Image: Henk Kruger/Independent Newspapers South Africa's labour market faces a difficult contradiction: unemployment is high, yet many businesses can't find the skilled workers they need. This is especially true in sectors like logistics and construction, where foreign labour is often used to fill urgent gaps. While this approach helps keep operations running, it often raises concerns that jobs are being taken away from South Africans. But framing the issue as a choice between local and foreign labour doesn't capture the complexity of the problem. What's needed is a practical, balanced approach - one that meets immediate business needs while supporting long-term local skills development. Temporary Employment Services (TES) providers can help businesses strike this balance by handling legal compliance, ensuring fair hiring, and supporting programmes that transfer skills from foreign to local workers. Skills shortages vs. employment needs In many sectors, particularly construction, infrastructure, and logistics, demand for specialised, high-risk or niche skills far outpaces local availability. These shortages are often compounded by the need for flexibility in project-based or high-turnover roles - demands that foreign labour is sometimes better positioned to meet quickly. Foreign workers can also bring specialist expertise not yet widely available in the local talent pool. In these cases, such professionals serve not just as short-term resources but also as potential mentors and catalysts for local upskilling. The issue, then, is not whether foreign labour has a place in the South African economy – it clearly does – but how this labour is recruited, managed, and integrated into the workforce in a way that aligns with national priorities. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Enabling compliance and ethical hiring TES providers offer a compliant, ethical, and efficient framework for meeting urgent workforce needs without undermining employment equity or legal standards. By handling vetting, documentation, and permit validation, TES partners ensure that foreign workers are lawfully employed and that all contracts meet the requirements of the Basic Conditions of Employment Act, Labour Relations Act, and other applicable regulations. Importantly, TES providers reduce legal and reputational risk for employers by acting as the legal employer of record, managing worker conditions, pay, and compliance on behalf of their clients. This arrangement offers much-needed operational flexibility while maintaining the integrity of South Africa's labour laws. Building local talent for the long term One of the most strategic roles TES providers can play is facilitating skills transfer from foreign to local workers. Through structured mentorship, buddy systems, and training programmes, TES can help businesses develop a pipeline of South African talent for future roles. Foreign specialists become short-term enablers, not long-term replacements – helping to upskill locals and reduce future reliance on imported skills. This approach supports inclusive growth by uplifting local communities and reinforcing long-term economic stability. It also helps businesses align their workforce strategy with transformation and employment equity goals, which are vital in today's South African business environment. Strategic workforce planning is a shared responsibility Creating a resilient, future-ready workforce requires collaboration between industry, government, and TES providers. Joint sector forums can help identify critical skills gaps, while shared investment in accredited training and mentorship will build a stronger local talent pipeline. Clear policy and streamlined immigration processes are also essential to support fair, lawful hiring. At the same time, businesses should be incentivised to invest in local skills development while managing foreign employment responsibly. By linking hiring strategies to SETA-accredited programmes and forecasting future needs, companies can meet immediate demands and contribute to sustainable growth, job creation, and national transformation goals. Finding the way forward South Africa doesn't need a binary answer to the foreign vs. local labour debate – it needs a smart, fair, and inclusive solution. TES providers are uniquely positioned to offer just that: a scalable, compliant, and opportunity-driven model that addresses short-term skill shortages while laying the foundation for long-term talent development. Foreign expertise should uplift, not displace local talent. With the right partnerships and policies in place, South Africa can close the skills gap, create jobs, and build an economy where both local and foreign expertise are part of the solution – not in competition, but in collaboration. Jacques Maritz is the national sales and service manager of Quyn International Outsourcing. Image: Supplied * Jacques Maritz is the national sales and service manager of Quyn International Outsourcing. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. BUSINESS REPORT
IOL News
3 hours ago
- IOL News
What to expect from the South African Reserve Bank's interest rate decision this week
As the SA Reserve Bank prepares for its interest rate decision on July 31, economists discuss the potential for a rate cut and its implications for consumers facing rising food prices and inflation. Image: IOL / AI The prospects of a rate cut ahead of the SA Reserve Bank's (SARB) Monetary Policy Committee's (MPC) next interest rate decision on July 31, appear positive, but it's not a clear-cut case, economists said on Monday. 'The market currently expects a cut in the key repo rate by 25 basis points — which would be the third reduction this year,' said Thys van Zyl, Chief Executive of Everest Wealth Advisory. 'A lower interest rate would bring welcome relief to consumers.' He warned that while headline inflation remains relatively low, food price inflation is now at its highest level in over a year, which poses risks to interest rate expectations as well as consumer spending. Dr Elna Moolman, Standard Bank's group head of macroeconomic research, also believes the current inflation rate supports the case for an imminent interest rate cut, and although she expected inflation to rise over the coming months, it should remain 'reasonably benign'. However, Van Zyl warned that the central bank may be reluctant to cut rates too aggressively if global food and oil prices continue to trend upwards. 'Earlier this year, it was anticipated that the Reserve Bank could cut interest rates one or two more times in 2025," Van Zyl said. "Following the January and May reductions totalling 50 basis points, it's increasingly likely that we'll see only one more cut this year – and perhaps not before year-end.' Uncertainty surrounding the proposed 30% tariffs on South African exports to the US is another factor weighing on the economy, he added, as these could impact export-driven industries such as manufacturing, mining and agriculture. 'This uncertainty, combined with rising inflation, puts policymakers in a difficult position – trying to support growth while also protecting the rand and price stability.' Consumer Price Inflation (CPI) rose to 3% in June, up from 2.8% in May. This was the first time in three months that inflation returned to within the Reserve Bank's 3% to 6% target range. However, CPI remains well below the 5.2% seen this time last year. Food prices remain higher than expected, particularly red meat, after a bout of the foot-and-mouth disease, yet consumer goods inflation remains subdued. Johann Els, chief economist at Old Mutual, said the weak overall pricing pressure in the economy justifies a further 0.25 percentage point interest rate cut this week. ALSO READ: Understanding the impact of rising inflation on SA's interest rates Potentially lower inflation targets later in the year or in 2026 could also jeopardise the interest rate situation for South Africans going forward. South African Reserve Bank (SARB) governor Lesetja Kganyago has strongly advocated for the country to lower its inflation target from 4.5% to 3%. Experts argue that a lower inflation target would improve price stability, reduce borrowing costs, and enhance investor confidence in the long term. However, many feel it would entail some short-term 'pain' for the sake of long-term gain. Yet tightening monetary policy could be a dangerous move in the current economic climate, warns Frederick Mitchell, chief economist at Aluma Capital. 'Conventional wisdom suggests that raising interest rates can curb inflation, yet in the current environment, where inflation remains subdued but economic growth is threatened, tightening monetary policy may exact an economic toll without addressing the underlying trade issues,' Mitchell said. IOL Business
