New report reveals cost-of-living crisis deepening for South Africa's poor
A new report by the National Planning Commission (NPC) and Unicef (United Nations Children's Fund) reveals a troubling trend: while cumulative headline inflation rose by 94.6% between 2011 and 2023, the cost of essentials surged at a much faster rate. Electricity prices tripled, education costs more than doubled, and food prices climbed by 136.1%, far outpacing the growth in wages for poorer households.
'This report is not just about graphs and figures, it's not only about the cost of living. It is about the cost of being human — the cost of being a mother, a child, or a worker,' said Professor Julian May, a commissioner from the University of the Western Cape.
May presented the findings to a room filled with officials from various government departments and civil society organisations on Friday, 16 May, highlighting both the improvements and challenges in addressing South Africa's cost-of-living crisis.
The report aims to inform policies created through the National Development Plan (NDP). The NDP 2030, drafted in 2012 by the National Planning Commission, sets out to eliminate poverty and reduce unemployment by 2030. With the deadline for this long-term strategic plan approaching, the commission partnered with Unicef to update and deepen the analysis.
'This report is important for planning purposes and for informing policy with evidence,' said Professor Phakama Ntshongwana, a commissioner at the National Planning Commission. 'The different domains researched in this report are critical because they affect millions and millions of people in the country.'
Cost of living essentials outpace everything else
The report reveals that while general inflation nearly doubled prices over 12 years, essential goods and services increased far more sharply.
Meanwhile, real wages — what people take home after adjusting for inflation — fell by 3.4%. In other words, the average South African worker could buy less in 2023 than in 2011.
Electricity saw the most dramatic increase, rising by 230% over the 12-year period. With persistent load shedding and above-inflation tariff hikes, many poor households were forced to spend a disproportionate share of their income just to keep the lights on and cook meals.
Food inflation hit the poorest the hardest. Staples like maize meal and cooking oil experienced steep price increases, with overall food and non-alcoholic beverage inflation at 136.1%. These are not luxury goods but the backbone of sustenance for South Africa's poor. As a consequence, households were forced to cut back on food spending. May said some even went as far as skipping meals or relying on cheap, nutrient-poor alternatives to survive.
Transport costs also rose sharply, especially for those reliant on minibus taxis or buses. With public transport inflation estimated at about 130%, and private transport closer to 165%, commuting to work or school became unaffordable for many.
While education is often hailed as a pathway out of poverty, it has become less accessible over the past 12 years. Education costs increased by 138% overall, and primary and secondary school fees rose even faster. The report shows that it is no longer just about access, but affordability.
The soaring cost of essentials was only exacerbated by the fact that real wages declined by 3.4% between 2011 and 2023. For many low-income workers, each year brought less purchasing power. Despite the introduction of a national minimum wage, wage growth lagged far behind inflation in essentials, squeezing household budgets even tighter.
Challenges to Achieving NDP Goals
Ntshongwana noted that while there have been pockets of improvement, the report highlights significant challenges to the National Planning Commission's goal of meeting key objectives in the National Development Plan.
'We are not much closer to the goals of the NDP. There are pockets of improvement, but much remains to be done regarding policy delivery and improving quality of life for children, women, and society as a whole,' he said.
She also pointed to South Africa's spatial patterns — a legacy of apartheid spatial planning where non-white people were removed from urban areas and placed in townships on the periphery — as a strong impediment to improving the quality of life for the poorest communities.
'With low-income people living far away from economic hubs where they can access jobs, there comes the question of their job-seeking patterns, with transport costs playing a huge role in their ability to access employment,' Ntshongwana said.
The value of social grants
The report highlights that social grants have become a critical lifeline for a large portion of South Africa's population amid rising living costs and economic challenges. In 2023, Pietermaritzburg Economic Justice and Dignity released a statement revealing that about 93% of grant money is spent on food, underscoring the grant's role in mitigating the impact of soaring prices on poor households.
The Trends in the Cost of Living report found that between 2011 and 2023, social assistance in South Africa expanded, with the number of grants paid out by the government in the same period.
However, the report found that the real value of grants declined over the assessment period when compared to the headline CPI, particularly for the old age grant, war veterans grant, disability grant, and care dependency grant
Despite their importance, the report argues that social grants alone are insufficient to fully offset the rising costs of essentials, leaving many people vulnerable to ongoing economic pressures.
However, Mervyn Abrahams, a programme coordinator at Pietermaritzburg Economic Justice and Dignity, said his organisation was working on a research project advocating for social grants to be set above the upper-bound poverty line to adequately address the cost of living crisis.
'If you set it below, it will only be used to sustain life — to pay for food, transport, and the like. But if it's set above, it allows some level of decision-making as to what the grant beneficiary will do with the extra R200 or R300. They can then start to question how they can invest the extra money to create some kind of income stream for themselves,' Abrahams said.
He added that the two-year research project found that 67 of the 100 grant beneficiaries involved used the money to develop alternative income streams, such as growing extra food and selling it, thus alleviating some of the pressures of the cost-of-living crisis. DM
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Maverick
3 hours ago
- Daily Maverick
The National Dialogue is going nowhere fast, and that's a great pity
The National Dialogue is dead, long live a national dialogue, or something to that effect… where or how to start such a dialogue, the lower-case one, is the next big task. We know that we have to talk, but we can't seem to agree on what to talk about, or whom to include in such talks. It's all rather bewildering. As mentioned previously, opposition to President Cyril Ramaphosa's initiative is, 'in one sense, a good thing', because it meant that people were engaging with the proposal, and that 'a measure of distrust of the government is always necessary'. In among it all lies the way forward, or rather 'a way forward'. For what it's worth, I remain convinced that the Diagnostic Overview of the National Development Plan is a good place to start, with the necessary updates, inclusions and adaptations. Opposition to Ramaphosa's National Dialogue has moved between positions of outright contempt, to self-dramatisation, bad faith and inauthenticity. Then again, it really was a stretch to imagine the Democratic Alliance, MK party and the EFF supporting anything put forward by Ramaphosa; they were, as they usually are, 'a little too precise, a little too rapid' in their response to the National Dialogue. My colleague Stephen Grootes used the term performative, which is a useful way of describing their responses. These political groups are, at least, consistent and have always presented themselves as indispensable for South Africa's future. Taking them at their word, they are the indispensables. The latest withdrawals will probably mean that the National Dialogue, in its current conception, will not start. The latest group of refuseniks who were meant to participate in preparations toward the National Dialogue have accused the president's initiative of rushing, of 'cutting corners' and of 'centralising power'. The latter is difficult to fathom because it seems to me that opening up a discussion on the country's future is actually about decentralising influence and power and about bringing together political and civil society. Never mind. Leading the most recent resistance, and what may well torpedo the president's initiative, are the Thabo Mbeki Foundation and the Desmond and Leah Tutu Foundation, the Steve Biko Foundation, the Chief Albert Luthuli Foundation, the FW de Klerk Foundation, the Oliver and Adelaide Tambo Foundation, and the Strategic Dialogue Group. At first glance, the new resistance projects an image of loyal criticism in the sense that they believe, for sure, that something ought to be done, and that they would like to be part of that something if the necessary changes and improvements are made. Closer scrutiny suggests that there may be a loss of the spirit of compromise with which Mbeki and the late former president FW de Klerk (and Ramaphosa, in particular) were familiar. It's all rather confusing. It's a bit like trying to figure out how something or someone can be all over the place at the same time. We have to wait and see what emerges. What I want to discuss is the idea of compromise, and of bringing the opposition into the room. The Mbeki-De Klerk non-compromise A long time ago, during the latter stages of the Codesa negotiations, I had a chat with former president De Klerk about compromise in politics and about its gains and losses. Regardless of what I (many of us) thought at the time, De Klerk believed he had made the greatest compromises, first, with his 'own people' about ending legal apartheid, and then with the ANC in the final months of the negotiations process. The conversation ended on a sobering note. 'You don't have to tell me about making compromises,' De Klerk said. And so I was surprised that the foundations of former presidents Mbeki and De Klerk were among the refuseniks. They would at least understand that Ramaphosa's initiative was somewhat of an acknowledgement that the ANC-led state had lost the power and will to steer South Africa, and that it sought to forge stronger alliances with civil society. All the more surprising was that the Desmond and Leah Tutu Foundation withdrew. They would represent civil society with a little less political baggage than the Mbeki and De Klerk foundations. Then again, the Desmond and Leah Tutu Foundation probably endorsed the (political) compromises that created the current Government of National Unity. The objective of that compromise, it seemed to me, was by and large to maintain the political and economic status quo that took shape after 1994. To the extent, then, that the envisaged National Dialogue included the main parties that gave us concepts like ' sufficient consensus ' in the early 1990s, one may be forgiven for believing that the Mbeki and De Klerk foundations would, at least, enter into preliminary discussions on the National Dialogue. Turkeys don't vote for Christmas Let's try to think harder about negotiations, bargaining and more honest discussions among political and social society. Bringing together political society and social society — all interested parties — into a room to discuss a way forward does not always guarantee optimal outcomes. As the tired idiom has it: turkeys don't vote for Christmas. Let's try a more sophisticated example, grounded in reality (turkeys don't actually vote, nè). Imagine a village, somewhere in Central America, that is plagued by crime, gender-based violence and drug abuse. A leader of the village suggests a 'dialogue' about crime, gender-based violence and drug abuse, and invites everyone into a hall to discuss what is wrong and what ought to be done about it. One suggestion is that the local municipality installs high-mast lighting as a way to curb criminal activities at night. Now, among the invited, for the sake of democracy, representation and inclusivity, are criminals who have an interest in darkness. Criminals thrive on operating in the dark. The initiative to install high-mass lighting fails because there is no consensus. The criminal elements on the guest list of civil society vote against high-mast lighting. It is at this point that the local leaders can simply go ahead and authorise installation of the high-mass lighting by some decree or authoritarianism, or on the basis of 'sufficient consensus', or by asking the criminals to vote against their interests. What will it be? What should it be? I just don't know. I return to the befuddlement of a political superposition — trying to figure out how something or someone can be all over the place at the same time. Nobody knows what will happen next. I don't know what will happen next. But because I don't know what will happen next, does not mean everyone else does not know what will happen next. Maybe somebody does know what will happen next. I think I mangled a line from the film The Milagro Beanfield War, but it works, kinda. For now, we remain in stasis — what has become South Africa's original position. DM
The South African
3 hours ago
- The South African
Bolt demands justice following Soweto driver's murder
E-hailing company Bolt has confirmed that some of the drivers affected by the alleged taxi violence in Soweto are operating on its platform. This comes after one person was shot and killed, and two others were injured when their vehicles were set alight at Maponya Mall in Soweto on Wednesday, 13 August. The attack has sparked outrage across the country, with Bolt condemning the violence in the strongest terms. Senior General Manager of Bolt South Africa, Lerato Mostoeneng, expressed sadness over the incident. Mostoeneng said it is appalling that anyone should lose their life for trying to earn an honest living. 'Our hearts go out to the driver's family, friends, and all those affected by this senseless act of violence. We condemn these attacks in the strongest terms and call for urgent action from law enforcement to ensure the safety of all e-hailing drivers operating in South Africa,' said Mostoeneng. Bolt said driver safety remains a top priority and that it has reached out to drivers in the affected areas to offer support and guidance. The company is also engaging with authorities to strengthen protection measures in known high-risk zones. Police are investigating a case of murder, two cases of attempted murder, and arson. According to a police report, four men approached a driver, shot him, and then torched the vehicle. The attackers also shot another driver, who managed to escape. A passerby sustained a gunshot wound, and both injured individuals were taken to the hospital. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 11. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news
The Citizen
4 hours ago
- The Citizen
Weekly economic wrap: local data good for local GDP
Although this week's economic data looked good for GDP, there is a pervasive sense of waiting for the US tariff that affected unemployment. It was a busy week on the economic data front with most of the local data looking good for the second quarter South African gross domestic product (GDP). South Africa also submitted a new proposal for the US tariff ,which will hopefully see the 30% reduced. Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research (BER), says the batch of June high-frequency data was generally positive for GDP. She notes that while June retail sales slowed after a very strong April and May, the full quarter was solid and, as such, also bodes well for consumer spending in the second quarter. 'In addition, the quarterly improvements in mining and manufacturing production are welcome after both sectors contracted in the first quarter. Conversely, wholesale declined and the labour force survey showed an uptick in the unemployment rate, with little job growth outside of the trade sector.' De Schepper says there was also plenty to digest on the international data front with the biggest release being the US inflation data. 'After a softer-than-expected consumer inflation print, markets fully priced in a 25 basis points rate cut by the Federal Reserve in September, with some talk of a potentially bigger cut. However, a surge in wholesale inflation (PPI) provided a sense check to this narrative.' ALSO READ: 12 companies close, 4 000 jobs lost as US tariffs and sales slump bite automotive industry Everyone waiting for the outcome of the Trump/Putin talks on Ukraine Bianca Botes, director at Citadel Global, points out that oil markets have been treading water, with Brent slipping back under $67/barrel after a short-lived bounce, as traders wait to see whether the Alaska meeting between the US and Russian presidents can deliver tangible progress on Ukraine. 'Washington warned of sharper sanctions on Russian crude buyers if talks fail, keeping geopolitical risk priced in. At the same time, signs of stronger demand from Japan and the prospect of US monetary easing are acting as a counterweight to the OPEC+ (Organization of the Petroleum Exporting Countries and other oil-producing countries) supply expectations and demand-growth concerns. 'Gold has been losing ground, heading for its worst week since late June. However, it is marginally in the green this morning. The hotter US inflation print of 2.7% has shifted rate-cut forecasts toward a slower pace, dulling bullion's appeal in the near term.' Botes says the rand has pulled back to around R17.60/$, giving up its earlier strength as gold prices slipped and the greenback regained some lost ground. 'Domestic sentiment remains cautious, with stronger manufacturing output offset by weaker employment and unease over the long-term cost of US trade measures.' The rand was trading at R17.58/$ on Friday afternoon. ALSO READ: Unemployment could get even worse in third quarter due to US tariffs Unemployment increases again in the second quarter According to Statistics SA's Quarterly Labour Force Survey, the unemployment rate increased to 33.2% in the second quarter, up from 32.9% in the first quarter. Damian Maart, economist at the Bureau for Economic Research, says the number of people classified as not economically active due to discouragement declined by 0.8% (28 000), while those not economically active due to other reasons remained the same between the two quarters. 'This decline pushed the expanded unemployment rate down by a modest 0.2% to 42.9% in the second quarter, which remains worryingly high.' Busisiwe Nkonki and Isaac Matshego, economists at the Nedbank Group Economic Unit, noted that overall, job creation remained low as companies sit with excess capacity amid weak demand and uncertainty regarding US trade policies affecting South Africa. Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole and Koketso Mano, economists at FNB, say the increase in the unemployment rate, combined with the ongoing moderation in the absorption rate, underscores persistent vulnerabilities in the labour market and the economy's limited capacity to generate much-needed jobs. They point out that the economy managed to recover 2 272 053 of the jobs lost in the first half of the pandemic year (2020) and the 659 566 jobs lost in the third quarter of 2021 after the July 2021 social unrest. 'However, formal non-agricultural employment diverged from its pre-pandemic trajectory, a sign of the economy's weakened structural health and diminished ability to achieve the job creation ambitions of the National Development Plan (NDP).' ALSO READ: Business confidence increases, but will come under pressure from US tariff Retail sales growth fell short Retail sales growth slowed notably but is still positive on a quarterly basis. It was under market expectations of 3.3%, posting a 1.6% increase in June compared to 4.3% in May. Wholesale trade sales, on the other hand, contracted at a slower pace of 1.7% in June compared to a 3.7% decline in May. Maart says this marked the slowest rate of contraction in the past three months. Motor trade sales grew at a slower annual rate of 3.1% in June, down from 4.1% in May. Sales were flat monthly and quarterly growth was marginal at 0.6%. Matikinca-Ngwenya, Mkhwanazi, Sithole and Mano say despite the loss in momentum, this print suggests that the retail industry grew by 0.9% in the second quarter, affirming their view of a recovery in GDP growth in the second quarter. Nkonki and Matshego expect the upward momentum in retail sales to continue, supported by rising real incomes, subdued inflation, continued withdrawals of contractual savings, and lower debt servicing costs compared to a year ago. ALSO READ: Mining production improves, but challenges loom Manufacturing and mining production surprised to the upside Manufacturing production grew by 1.5% compared to the first quarter, which saw a 1.9% decline. On an annual basis, manufacturing production growth also surprised to the upside, exceeding market expectations of 0.8% by rising to 1.9% in June, Maart says. Like factory output, mining production outperformed expectations, showing a notable improvement with an increase of 2.4%, in its second month of growth. The biggest boost to the annual performance came from platinum-group metals. Maart says overall mining production is set to make a positive contribution to GDP growth in the second quarter, recording a 3.9% increase compared to the previous quarter. Nkonki and Matshego say the outlook for both sectors remain murky. 'The 30% US tariff will directly affect manufacturing production as US demand for South African products decline, but the cyclical upturn in domestic demand should help to soften the blow. 'Given that most mining products are exempt of US tariffs, this sector will be affected indirectly as US trade policies place downward pressure on global growth and commodity prices.' Matikinca-Ngwenya, Mkhwanazi, Sithole and Mano say the full manufacturing and mining data suggests that the sector contributed positively to GDP growth in the second quarter, based on the 1.6% quarterly growth.
