'Stop the Band-Aid approach': analysts

This month, the bank's Monetary Policy Committee dropped the interest rate to help out-of-pocket citizens.

JOHANNESBURG - Government must abandon its Band-Aid approach and rather produce long-term strategies to radically transform the economy.

That's the view of some analysts.

And the South Africa Reserve Bank says the current economic growth rate remains too low to tackle the unemployment crisis.

READ: Sasi challenges South Africans to reinvent how we save

This month, the bank's Monetary Policy Committee dropped the interest rate to help out-of-pocket citizens.

South Africans are financially distressed.

Debt counsellors say people are cutting out what they see as luxuries - like take-outs, movies, cellphone use, gym contracts and they're revising insurances to make their cover more affordable.

A recent report shows that most South Africans run out of money by the middle of the month.

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Most of our money is spent on housing and groceries, followed by transport and school fees. 

Spending on clothing and security comes last.

The rising fuel price is hitting consumers hard. An issue that government has very little control over.

What makes matters worse, is that we don't have balanced and sustainable growth in South Africa.

READ: Most South Africans are broke by mid-month

But the Reserve Bank says it helps consumers by protecting the value of the rand - and a stable currency reduces economic insecurity.

It does this by controlling inflation.

The recent interest rate cut has brought some relief for consumers. But experts say the structure of the economy must be changed and this means tough decisions will have to be made.

Source
eNCA