Date: 20/10/2004
Source: Ministry of Finance
Title: T Manuel: You and Your Money Fundraising Dinner


YOU AND YOUR MONEY FUNDRAISING DINNER ADDRESS BY TREVOR A MANUEL, MINISTER OF FINANCE, Arabella Sheraton Grand Hotel, Cape Town, 20 OCTOBER 2004

Good evening ladies and gentlemen,

It is my pleasure to be with you this evening and to support such a worthy initiative. It is never easy to come to such glamorous surroundings, be surrounded by such enthusiastic company, and to talk about depressing things such as debt!

I would rather we talk about the debt we owe Danny Jordaan for securing the 2010 Fifa World Cup.

Or the debt we owe Ernie Els for ensuring our flag flies high in international sport.

Or the debt we owe Professor Wangari Maathai for showing us that a simple idea can plant a seed, building democracy and sustainable development.

That our children and our grandchildren can bask in the glory of African sunsets. That Africa can lead the way in finding solutions to modern challenges.

Tonight we recognise and pay tribute to the hard work that the people at You and your Money are doing to slacken the noose of debt that is choking too many South African families. Like all things in South Africa, talking about debt and sustainable development is not black and white.

In the aggregate, the debt levels in South Africa are not a cause of great alarm. At a macroeconomic level, household debt is a reasonable 55 percent of disposable income. This is up from just over 50 percent at the end of 2002.

However, it has come down from the peak of over 61 per cent at the end of 1997. When prime interest rates were increased to over 25 per cent in 1998 the pressure of this burden on households was tremendous.

Even more encouraging is the fact that overdue loans as a percentage of total loans in the banking system have fallen from around 5 percent in 2002 to 3 percent currently.

Debt in and of itself is not a bad thing. It allows us to fund our ideas for the future. To leverage today,