Martin Endjala
Namibian consumers struggle to make ends meet, as the high cost of living continues to affect household finances.
Lara Enslin, the chief executive officer at TransUnion Namibia, said on Wednesday that the latest Consumer Pulse Study by TransUnion shows that 49% of Namibian consumers are unable to pay at least one of their current bills and loans in full.
Of those consumers, 25% plan to borrow from a friend or family member to help pay some of their current bills and loans.
“As a result, many consumers shifted their spending behaviour in the past quarter, including cutting back on discretionary spending (52%), cancelling subscriptions or memberships (27%), and reducing digital services expenses (27%),” she said.
According to Enslin, this suggests that consumers are taking proactive steps to manage their finances in the face of economic uncertainty.
She said access to credit remains crucial for consumers.
In the second quarter of 2024 (Q2), credit demand surged, with 41% of respondents planning to seek new credit within the next year.
Enslin indicated that in Q2 2024, households faced financial challenges, adding that nearly three-quarters were experiencing stagnant or decreased incomes, with only 28% reporting an increase.
“Job loss and salary reductions were the primary causes of declines in household income. Responding to financial challenges,” she said.
The study found that the primary factors contributing to a decline in household income were job loss (25%), and salary and wage reductions (17%).
In contrast, starting a new business (14%), and raising salaries and wages (16%), were the main causes of increases.
TransUnion’s Consumer Pulse Survey of 382 adults was conducted from 1 to 20 May in partnership with Dynata, a third-party research provider.
The study stated that Namibian consumers have been grappling with high inflation, which has exerted pressure on disposable income and spending. Inflation averaged 5.9% in 2023, driven by a surge in food prices, which averaged 11.4%.
Despite an overall decrease in consumer inflation to 4.9% in the first five months of 2024, it remained a significant concern for respondents, exacerbated by the sharp escalation of transport inflation driven by rising fuel prices.
In Q2 2024, money and gift card scams emerged as the most prevalent fraudulent scheme, affecting 37% of respondents (down four percentage points from last year).
Fraudulent phone calls, known as vishing, deceived 31% of respondents into divulging personal information.
Phishing (fraudulent emails, websites, social posts, or QR codes meant to steal data) affected 29%, down from 34% last year.
In Q2 2024, consumer fear about sharing personal information increased to 91%, reflecting widespread concern across all generations. Identity theft was the primary worry for 76% of respondents.
