Globally, personal finances are heavily impacted by rising interest rates, inflation, and geopolitical uncertainty. High interest rates have caused higher borrowing costs, which affect mortgages, loans, and credit card debt.
Although inflation has been cooling in some regions, it remains a significant issue as wages often lag the rising cost of living. Energy prices, housing affordability, and concerns over slow economic growth—especially in China—continue to create uncertainty in global markets.
The looming implementation of NHI is also expected to come at a very costly price to the consumer. Medical Aid companies are advising huge above-inflation hikes for their services next year. They may soon find themselves short of customers, much like power utility Eskom.
In South Africa, personal financial challenges are particularly acute due to several interconnected factors. The country is grappling with stagnant economic growth, high unemployment, and a shrinking middle class.
Rising debt-servicing costs and potential tax increases—such as higher personal income tax or VAT—are looming in 2024 as the government attempts to raise additional revenue to stabilize its fiscal situation. These measures are expected to burden already strained household budgets. Furthermore, persistent issues like load shedding and low private investment also contribute to a tough financial environment for South Africans.
On the positive side, Sars is collecting billions of Rand due to withdrawals relating to the two-pot retirement arrangement. (The consumer remains out of pocket). As quoted by Allan Gray Investments, “Often referred to as the world’s most volatile currency by market commentators, the rand is unpredictable and a continuing source of anxiety for South Africans. With growing uncertainty and anxiety about global politics and business conditions, capital flows into emerging markets are likely to be volatile, as will be the rand exchange rate.”
Households in South Africa are also facing pressures from declining retail and vehicle sales, which signal weakened consumer spending power. Although inflation has eased, offering some relief, high levels of policy uncertainty ahead of the 2024 national elections create further financial instability.
This political uncertainty could affect investments, borrowing costs, and broader economic performance. The Reserve Bank is cautious for good reason as regulated prices of for instance electricity are way above inflation. So too is the case with government employee salaries and the looming water crises can only be financed by passing it on to the consumer as the government has run out of money. Salaries, debt repayments infrastructure backlogs, and a host of other spending items are in the red zone.
There is a disturbing trend, that of a decline in interest in news. Whatever the reasons may be, this is happening at a time that perhaps is the most important time to be aware of the news.
Geopolitical crises are escalating in different parts of the world, and they pose various levels of risk to global stability. We in South Africa are not isolated from the current crises unfolding and escalating daily.
There are a number of the Top Powers currently associated with significant military involvement, here is a list of some of the most dangerous crises as of 2024, arranged based on their potential to disrupt global security, economies, and international relations:
3.1. Russia-Ukraine war.
The ongoing conflict between Russia and Ukraine remains the most immediate and dangerous geopolitical crisis. Its impact extends beyond Europe, with consequences for global food security, energy markets, and military alliances. Russia's invasion has disrupted grain supplies from Ukraine, a key exporter, causing food shortages and price increases worldwide, particularly in Africa and the Middle East. It has also caused a global energy crisis, as sanctions on Russia, a major oil and gas producer, led to spiking prices.
3.2. China-Taiwan tensions.
Rising tensions between China and Taiwan present a significant geopolitical risk, especially as the U.S. and its allies have pledged to defend Taiwan in the event of a Chinese invasion. The dispute could draw multiple nations into a military conflict and disrupt global supply chains, particularly in the semiconductor industry, as Taiwan is a leading producer of microchips. The situation is aggravated by China's growing military assertiveness and the possibility of U.S.-China confrontations in the Indo-Pacific.
3.3. Middle East instability (Iran-Israel Tensions and Syria)
The Middle East continues to be a volatile region with multiple overlapping crises. Tensions between Iran and Israel are particularly concerning, as they involve the potential for direct military confrontation over Iran's nuclear program. Proxy conflicts in Syria and Yemen also contribute to instability, with both nations experiencing prolonged humanitarian crises and involvement from regional powers like Saudi Arabia, Russia, and Turkey.
3.4. North Korea's nuclear ambitions.
North Korea's continuous development of nuclear weapons and ballistic missile tests are a serious threat to East Asian security. These actions heighten the risk of military confrontations with South Korea, Japan, and the U.S. North Korea’s unpredictability and isolation make the situation dangerous, as diplomatic efforts have stalled, leaving the region on edge.
3.5. Houthi attacks on Red Sea shipping.
The Houthis, a Yemeni rebel group backed by Iran, have increased attacks on shipping vessels in the Red Sea. This situation threatens global trade and energy security, as the Red Sea is a key shipping route for oil and goods between Europe and Asia. Any disruption could significantly affect global supply chains, especially as the world already grapples with logistical challenges.
3.6. Sudan conflict.
Sudan is experiencing internal conflict between rival factions of the military, leading to large-scale violence and a severe humanitarian crisis. The conflict destabilises the Horn of Africa and could spill over into neighbouring countries, exacerbating refugee flows, famine, and regional instability.
3.7. Afghanistan's Taliban regime and terrorism.
Afghanistan under the Taliban remains a focal point for terrorism, with groups like ISIS-K gaining a foothold. The lack of international recognition for the Taliban government and its regressive policies towards women and minorities have created a volatile environment. This could lead to the resurgence of terrorism, not only in the region but globally. South Africa did play an international cricket game against them this year and we were frowned upon for doing so.
3.8. Latin America: Political instability and economic crises.
Countries in Latin America, such as Venezuela and Haiti, continue to suffer from severe political and economic crises. In Venezuela, the Maduro regime's authoritarianism, combined with hyperinflation, has led to widespread poverty and emigration. In Haiti, the assassination of President Jovenel Moïse in 2021 has led to a security vacuum, gang violence, and a political collapse.
3.9. Western Sahara conflict
The long-standing territorial dispute between Morocco and the Polisario Front over Western Sahara remains unresolved. While this conflict is relatively low intensity compared to others on this list, it has the potential to destabilize North Africa, especially given Algeria's support for the Polisario and regional rivalries.
These crises are interconnected, and their severity can shift depending on political, economic, and military developments. The global community faces the challenge of managing these crises to prevent escalation into broader conflicts while addressing their underlying causes such as economic inequality, resource competition, and nationalism.
It is difficult for a country to stay neutral and not pick sides. South Africa did decide to bring a genocide case against Israel. The Israel and Middle East conflict has brought some division in our country. Every individual has a stake in world peace as our lives and that of our children are affected.
* Kruger is an independent analyst.
PERSONAL FINANCE