South Africa’s debt burden has ballooned, and the knock-on effects are now showing up in family budgets.

National debt stood at 23% of GDP when Thabo Mbeki left office in 2008. Two decades later it exceeds 75%, with interest payments swallowing almost one in every five rand of state revenue.

The arithmetic matters for households. When government debt expands this fast, the government competes with ordinary borrowers for credit, pushing up the cost of money.

That helps explain why home-loan and car-finance rates remain elevated even though inflation has cooled.

Rising bond yields also weaken the rand, feeding into import prices and monthly grocery inflation.

Economists warn that debt servicing costs are crowding out social and infrastructure spending, leaving fewer growth multipliers in the economy.

The result is a squeeze from both ends: higher taxes on the way in and fewer public-service benefits on the way out.

For families, the best defence is tighter budgeting and shorter debt repayment periods. Families need to be clever when it comes to debt – pay down high-interest cards first, switch variable-rate loans to fixed terms where possible, and channel small savings into emergency funds.

The arithmetic of compound interest cuts both ways; discipline today keeps the repo-rate roller-coaster from wiping out tomorrow’s stability.