SA’s poor people are getting poorer as prices climb
For many it is becoming impossible to keep up with the rising cost of living
The rising cost of food, electricity and fuel is making life more expensive for South Africans — and for many meeting basic expenses is becoming out of reach.
The January 2022 Household Affordability Index, published by the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD), placed the average cost of a household food basket at R4,401. This was a 2,9% (R125) increase from the previous month and a year-on-year increase of 8,6% (R350).
According to the organisation’s programme co-ordinator, Mervyn Abrahams, the index tracks food price data from 44 supermarkets and 30 butcheries, in Johannesburg, Durban, Cape Town, Pietermaritzburg and Springbok.
The household food basket was conceived with help from women living on low incomes in these cities.
The report by PMBEJD showed that in January there were price increases for 15 of the 17 foods considered to be the core foods.
Among these were cooking oil — the price for 10l had risen 30% — while a 10kg bag of frozen chicken pieces cost 17% more. The price of white bread rose 4.5% and the price for brown bread was up 3%.
Abrahams said the key finding of the report was simply that minimum wage and social grant increases were not keeping up with the rising cost of living.
“Policymakers must take note of the major affordability crisis facing South Africans,” he said.
The report showed that from a minimum wage of R3,643 per month a worker typically spent R1,344 (36,9%) on transport and R731 (20%) on electricity, leaving R1,568 to secure all other household expenses. “If all this money went to food, then for a family of 4,5 (the latest ratio of how far a wage for a black SA worker must go), it would provide R348,54 per person per month — this is 44% below the food poverty line of R624 per person per month,” said the organisation.
The proposal on the table for the national minimum wage rise in March 2022 is CPI plus 1% which was even less than in 2021, which was CPI plus 1.5%, the report said.
Abrahams said that for those South Africans on a minimum wage, or who relied on social grants, there was “no spending buffer” that could absorb further increases in living costs. We need to start looking at social security as a form of economic stimulus,” he said.
Another report, on how minimum wage rates changed in 64 countries and whether such amounts can ensure a minimum standard of living in a given country, said that minimum wage rises in SA kept up with the recent rise in food prices, but just barely.
This report was compiled by analysts at Picodi, an international e-commerce company operating in 41 countries to provide discount coupons for online stores.
In this report the value of a basket of basic food products (for one adult) at the beginning of 2022 is R1,340. Compared with the beginning of 2021, the price of the products had risen 2.84%.
The report says that since the minimum wage in SA had increased 4.7% year-on-year for January, basic food sufficient to meet the minimum nutrient requirements took up 36% of the minimum wage.
Food is, of course, not the only item driving consumer inflation in SA. December’s record-breaking inflation numbers were also driven by the 40% rise in fuel prices in 2021 and a 15% hike in electricity prices. Given these cost of living increases many South Africans have resorted to using debt to cover basic living expenses.
Neil Roets, CEO of Debt Rescue, said the financial strains on consumers were not sustainable. “The reality is that most South Africans spend 75% of their disposable income on debt and tend to take care of living costs such as groceries with their store or credit cards, which just add to the debt spiral,” said Roets.