New report reveals cost-of-living crisis deepening for South Africa's poor

Daily Maverick

29-05-2025

From 2011 to 2023 the cost of living in South Africa has nearly doubled. This was revealed in the Trend in the Cost of Living in South Africa report, released on Friday, 16 May 2025. Electricity increases and food inflation are shown to be hitting poor and working-class households the hardest.
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