Release of report on cost of living trends
CAPE TOWN - The National Development Plan Vision 2030 has collaborated with UNICEF to report on cost of living trends from 2011-23.
This as it seeks ways to address poverty and inequality.
The report looks at how the increased cost of living impacts service provision and household well-being and whether wages have kept pace with these increases.
According to Professor Julian May from the Centre of Excellence in Food Security, prices have climbed by 95% since the period they covered , while wages have not kept up.
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Daily Maverick
29-05-2025
- Daily Maverick
New report reveals cost-of-living crisis deepening for South Africa's poor
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
eNCA
17-05-2025
- eNCA
Release of report on cost of living trends
CAPE TOWN - The National Development Plan Vision 2030 has collaborated with UNICEF to report on cost of living trends from 2011-23. This as it seeks ways to address poverty and inequality. The report looks at how the increased cost of living impacts service provision and household well-being and whether wages have kept pace with these increases. According to Professor Julian May from the Centre of Excellence in Food Security, prices have climbed by 95% since the period they covered , while wages have not kept up.
The Citizen
24-04-2025
- The Citizen
SA's expanding safety net: Millions more to receive social grants by 2030
'One of the commitments in the National Development Plan Vision 2030 is to eradicate food poverty by 2030,' stated Hendricks. Al Jama-ah's Ganief Hendricks at the 2024 state of the nation address (Sona) at Cape Town City Hall on 8 February 2024. Picture: Gallo Images/Ziyaad Douglas South Africa is set to significantly expand its social welfare system over the coming years, with ambitious targets to increase coverage across multiple vulnerable groups. The Department of Social Development has announced plans to extend older persons' grants to 5.4 million beneficiaries by the end of the five-year term in 2030, up from a mid-term target of 5 million by 2027-2028. Similarly, child support grants are projected to reach 14.1 million children by 2030, while disability grants aim to support more than 1.1 million people by the same year. Department unveils strategic plan amid budget constraints The department recently unveiled its strategic plan for 2025-2030 and annual performance plan for 2025-2026, with a focus on poverty reduction, empowering resilient communities, and creating an integrated social development sector. These plans align with national development priorities while acknowledging that the department must 'do more with less' due to budget constraints. 'The strategic priorities of the Medium-Term Development Plan (MTDP) are to reduce levels of poverty and vulnerability to social ills, empower resilient individuals, families and sustainable communities, and create a functional, efficient and integrated sector,' explained a department representative during the presentation. The MTDP, which serves as an implementation framework for the National Development Plan (NDP), focuses on three key strategic priorities: inclusive growth and job creation, reducing poverty and tackling the high cost of living, and creating a capable, ethical, and developmental state. ALSO READ: New ID verification process for Sassa grants: Here's who's affected Understanding the planning framework The department operates within multiple planning timeframes that work together. The strategic plan covers a five-year period, while the annual performance plan addresses the immediate fiscal year ending in March 2026. The Medium-Term Expenditure Framework (MTEF) is a three-year rolling budget planning tool used by the National Treasury to allocate resources based on priorities and fiscal constraints. The NDP Vision 2030 serves as South Africa's long-term socio-economic development roadmap for the period up to 2030. Meanwhile, the MTDP serves as an implementation framework for the NDP, typically spanning 3–5 years and encompassing specific targets and commitments. This multi-layered approach allows the department to balance immediate fiscal realities with longer-term development goals while maintaining alignment with national priorities. Historic legislation on the horizon Deputy Minister of Social Development, Ganief Hendricks, told the portfolio committee that a policy on social development would be presented to Cabinet by October. Hendricks emphasised the historic significance of such legislation, noting that '30 years in our democracy, South Africa will have an Act of Parliament for social development'. The push for legislative reform extends beyond the department itself, with calls from various sectors for specialised legislation. 'There have also been calls from the disability sector for their own Act of Parliament to give them the power that they need,' the deputy minister explained. The Central Drug Authority has also requested legislation to address substance abuse, which Hendricks characterised as 'becoming a threat to state security'. ALSO READ: Sassa confirms Old Age Grant will not be cancelled Ambitious vision for poverty eradication by 2030 The department has identified reducing poverty and tackling the high cost of living as key priorities, directly aligned with the broader strategic focus areas of the Government of National Unity (GNU) formed after the May 2024 elections. 'One of the commitments in the National Development Plan Vision 2030 is to eradicate food poverty by 2030,' stated Hendricks. He outlined a vision where, by 2030, 'those who don't earn or work will get a guaranteed R760, but I believe R1,000 in their pocket every month.' This commitment, according to Hendricks, would 'send waves throughout the world that South Africa does care about the most vulnerable people.' With 28 million social grant beneficiaries, the department faces significant challenges in improving support. 'We have to do something to increase their food basket,' Hendricks explained, though he acknowledged that immediate increases would be more modest than hoped: 'Unfortunately, it looks like instead of a R150 increase, they're only going to get R120.' ALSO READ: Defence alleges witness interference in Sassa fraud case Nine portfolio commitments to address social challenges The department has identified nine portfolio commitments aligned with the MTDP, reflecting a more focused approach as the 2030 deadline approaches. 'I think the message is that as we move towards Vision 2030, we need to begin to cut the cloth according to size. We need to begin to reprioritise and not attempt to do everything,' a department representative stated. Key commitments include increasing access to nutritious food for vulnerable individuals, with mid-term targets of reaching 1.5 million people through food security programs by 2027-2028, and optimising social protection within available fiscal resources. Addressing substance abuse and Gender-Based Violence The department continues to implement the National Drug Master Plan with targets to help over 135,000 service users access substance abuse disorder treatment by mid-term (2027-2028), and nearly 273,000 by term end (2030). For gender-based violence, the department aims to provide psychosocial services to 224,549 victims by mid-term and 449,048 by the end of the term in 2030. 'We also have the intervention as part of the MTDP commitment to link social assistance with other forms of support to lift people out of poverty, so that our people don't only depend on social grants alone,' the department added. ALSO READ: A R1 billion U-turn: Scrapping the VAT increase leaves no winners, just absolute chaos Moving beyond social grant dependency Both Hendricks and the newly appointed Director-General, Fhumulani Peter Netshipale, emphasised the need to transition beneficiaries from dependence on social grants to sustainable livelihoods. 'The National Development Agency is expected to create sustainable livelihoods so that people rapidly move from social grants into sustainable livelihoods,' Hendricks explained. He added that the department was receiving pressure from Treasury, questioning it about its plans and actions for poverty alleviation. The department's poverty alleviation strategy targets 1.4 million households accessing sustainable livelihood initiatives by mid-term (2027-2028), expanding to 2.9 million by the end of the term in 2030. Enhanced monitoring and provincial oversight A key focus for the department going forward will be strengthened monitoring of service delivery at the provincial level. 'Most of the time we used to come here, and you say what is happening in North West, but we are now called to make sure that we monitor services through all nine provinces,' Netshipale explained. 'The department needs to step up its own approach to strengthen the monitoring of services and report here in terms of what is happening in terms of the baselines that we have set.' This represents a shift toward greater accountability. 'We will be accountable to this committee time and again in terms of what we have delivered,' added Netshipale. Despite the significant role social grants play in alleviating poverty—currently supporting 45% of the nation—Committee Chairperson Bridget Masango expressed concern about what she termed 'dignity poverty,' particularly for young people living on the Social Relief of Distress (SRD) grant, a temporary assistance program for those in immediate need. 'If you have young people as young as 35 years old and younger or older living on the SRD, that is not dignified at all,' Masango stated. ALSO READ: Who really won the VAT fight? GNU shakes as parties cry 'deception' Budget allocations and constraints The department's budget presentation revealed that while there were no major budget cuts for the MTEF period as in previous years, there were also no significant increases, requiring careful resource management. 'There were no nasty surprises, luckily for the MTEF period, as we had in the previous years, where there were budget cuts, but we were also not favourable in terms of the operations of the budget,' the Chief Financial Officer (CFO), Fanie Esterhuizen, explained. The base year 2025/26 budget allocation of R294 billion includes funding for the Social Relief of Distress grant, which is only allocated for one financial year, explaining the drop in the 2026/27 fiscal year allocation. A significant budget challenge is that the department had to fund the 5.5% cost-of-living increase for public servants from its existing operational budget, reducing goods and services allocations. 'In the past, three years ago, National Treasury would grant us this amount. But any increases now have to come from our baseline, and the only place we could take it from was from goods and services,' Esterhuizen stated. NOW READ: VAT to remain at 15%, hike reversed, Treasury announces
