Tariffs, Job Losses, and 12 Million Overindebted South Africans on the Edge

Tariffs, Job Losses, and 12 Million Overindebted South Africans on the Edge

30,000 jobs at risk from U.S. tariffs as 12M South Africans face debt Sebastien Alexanderson unpacks how families innovate with stokvels, informal work, and debt management.

19 August 2025: New U.S. trade tariffs could eliminate as many as 30,000 South African jobs, with the agriculture, mining, and automotive sectors being hit the hardest. Entire farming towns may face collapse, with households already stretched by record levels of debt.

This is according to Sebastien Alexanderson, Head of National Debt Advisors, who cautioned that when jobs vanish, debt spirals.

“Debt is the first casualty. People fall into arrears, defaults climb, and judgments follow. We’re seeing this play out every month,” Alexanderson said.

South Africa’s economy expanded by only 0.6% in Q4 2024 (Stats SA), while household spending climbed 2.3% year-on-year. But much of this spending is credit-fueled. FinMark Trust data shows that 75% of adults who borrowed in 2024 did so to cover essentials like food, with 43% relying on credit just to put meals on the table. Rising arrears and defaults point to households walking a financial tightrope.

The job market offers little relief. Companies are cutting bonuses, halting permanent hires, and leaving families increasingly reliant on short-term loans and informal lenders. Today, an estimated 12 million adults are over-indebted, while 37% of formal borrowers struggle to keep up with repayments.

“Debt is central to the survival of households,” said Alexanderson. “Families are choosing between paying school fees or keeping up with loan instalments. That’s how fragile things have become.”

The fragility runs deeper than access to credit. Although 98% of adults now have access to formal financial services, only 16% are financially healthy, down from 24% the previous year. In fact, 70% of adults reported stagnant or worsening financial circumstances in 2024, with 72% of households earning less than R140,000 annually and many dependent on grants or family support.

Nonetheless, with business confidence edging upward in July, showing resilience amid the headwinds, not all signals are bleak. “Exporters are also adjusting, shifting trade flows toward BRICS partners, AfCFTA countries, and Middle Eastern markets to soften the blow of U.S. tariffs,” said Alexanderson.

On the ground, ordinary South Africans are encouraged to innovate too. The informal sector, which already employs 8.2 million people (nearly half of total employment), is becoming a critical buffer against unemployment. Stokvels are evolving into bulk-buying and lending hubs, while debt management and credit clean-up services are giving families tools to regain control.

“Just as exporters are pivoting to new markets, households are rewriting the rules of survival,” Alexanderson explained. “Pooling resources, restructuring debt, and building community safety nets, that’s where real resilience lies.”

He warned that the macro outlook remains shaky with low growth, high unemployment, and escalating debt. Yet Alexanderson stresses that the human story deserves equal attention.

“It’s not all doom and gloom. South Africans are incredibly resourceful. The challenge now is to strengthen alternatives, from stokvels to debt management, so that families don’t just survive the next shock, they build pathways out of debt for good.”

About National Debt Advisors: 

National Debt Advisors is South Africa’s number one debt counselling company and is perfectly positioned to help South African consumers who are struggling with their finances, become debt-free in under 60 months. NDA will negotiate with creditors for reduced monthly interest rates and extended terms – ultimately consolidating all debt repayments into one lower monthly installment - whilst protecting consumers from harassment by creditors, securing their assets against repossession and leaving them with more money left to live on. NDA will help South Africans gain their financial freedom.