LETTER: Prices show cost of misrule

Ninety One’s recent disclosure regarding personal inflation hovering around 9.1%, in contrast to the officially reported consumer inflation rate of 7.5% since 1986, warrants deeper consideration (“Household inflation higher than CPI”, April 16).

At first glance, its methodology seems reasonable, incorporating SA favourites such as Mrs Balls chutney and All Gold tomato sauce, enduring products that have remained largely unchanged over time.

However, upon reflection, isn’t it absurd that prices have not only failed to decrease but have surpassed inflation? Despite advances in manufacturing, warehousing, distribution and information technology over the past 38 years, the anticipated gains in productivity seem conspicuously absent from the prices. Shouldn’t we reasonably expect these efficiencies to manifest in lower costs, even amid inflationary pressures?

I wonder if the issue lies not with the companies themselves, but rather with the challenging business environment they are forced to navigate. Over the past four decades SA has undergone transformation, from the demise of an illegitimate regime to the establishment of a new constitutional order, followed by three decades of elevated taxation, stringent labour regulations, infrastructure deficiencies, civil unrest and a corrupt government.

One might assume that across industries productivity would have surged by at least 50% over a generational span, leading to a decrease in prices. Yet it appears any such gains were counteracted by the adverse effects of a government that failed its business sector.

Neil Emerick
Free Market Foundation

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