With the current spending spree, especially by the emerging black middle class, this nation will hardly achieve and sustain reasonable economic growth.

With the current spending spree, especially by the emerging black middle class, this nation will hardly achieve and sustain reasonable economic growth.

Savings create investment that is so desperately needed for the productive capacity of our economy to improve. The culture of saving needs to be instilled in all South Africans, starting at school level.

This requires financial discipline and proper budgeting. I was perturbed to learn that a significant percentage of South African income earners, blacks in particular, are indebted and are struggling to service their debts.

This emanates mainly from a failure to prioritise properly and unnecessary competition, especially among the black middle class.

Some consumers claim to be accumulating wealth when they purchase luxury commodities financed through credit, while they are actually getting poorer in real terms.

They hardly ever escape from this quagmire of indebtedness and they eventually get blacklisted.

However, the Reserve Bank should be commended for increasing interest rates and introducing the National Credit Act, which has moderated credit extension by financial institutions.

Higher interest rates might crowd out investment, but, in an overheating economy the benefits of higher interest rates outweigh the costs.

Nkululeko Ngcamu, Ndwedwe