JOHANNESBURG, GAUTENG — The South Africa cost of living crisis has intensified, placing unprecedented financial pressure on households as the price of basic necessities continues to climb. With the average household food basket reaching nearly R5,500 in September, consumers are now grappling with compounding expenses driven by stagnant wages, surging fuel costs, and looming climate risks.
The Food Affordability Crisis and Inflation Illusion
According to Mervyn Abraham from the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD), the unaffordability of food is not a new issue tied solely to recent geopolitical factors, but a structural problem spanning the last decade.
The average food basket, which consists of 44 basic food items that low-income households rely on, reached R5,488 in September. Abraham highlighted a severe disconnect in the economy, noting that this basic food basket now exceeds the national minimum wage.
While Stats SA reported that food inflation hit a decade low—dropping to 0.6% in July and slightly rising to 0.7% in August—Abraham cautioned consumers against misinterpreting the data. “That does not mean that prices have come down,” he explained. “It merely means that increases are lower than what they were a year or two before.”
Despite the lower inflation rate, specific basic food items have seen exponential price hikes over the past year. Abraham noted that a 10kg bag of sugar increased by 6%, cooking oil by 2%, and 10kg of frozen chicken by 5. Staples like a 25-loaf pack of brown bread rose by 3%, while six cans of polony surged by 11%. Fresh produce, including potatoes, onions, lettuce, and spinach, has also seen significant price spikes over the last two months.
Record Fuel Prices and External Economic Shocks
Compounding the grocery bill is a severe escalation in transport and fuel costs. Sifiso Mkwanazi, an economist at Alex Forbes, pointed out that the primary driver of current economic pressure is external, largely tied to the ongoing conflict in the Middle East involving the US and Iran.
Because South Africa is a net importer of oil, disruptions to oil shipments through the Strait of Hormuz have severely impacted local fuel prices. Consumers are bracing for record-high petrol prices, with petrol expected to reach around R30 per liter, and diesel priced even higher.
Mkwanazi provided stark context on the inflationary pressure of transport: transport inflation moved from a negative figure in March to 8.8%, with fuel inflation specifically sitting 20% higher in August compared to the previous year.
Fiscal Constraints Limit Government Relief
When questioned about the possibility of the government intervening to subsidize fuel costs, Mkwanazi explained that National Treasury’s hands are largely tied by its current fiscal strategy.
The Treasury has been pursuing strict fiscal consolidation, recently achieving primary surpluses in budget balances and stabilizing the national debt trajectory. Mkwanazi warned that altering this fiscal story could negatively impact the country’s credit rating and risk premium.
Consequently, any potential fuel levy relief must be strictly fiscally neutral. With higher inflation and unemployment putting revenue under pressure, the Treasury is hesitant to provide relief that could deteriorate the country’s improving fiscal position.
El Niño Looms as the Next Major Threat
Looking ahead, both experts warn that the economic outlook remains fragile, with the looming El Niño weather pattern posing a significant risk to food production.
Abraham noted that while South Africa has benefited from a good maize crop harvest over the past two years—providing a sufficient stock buffer for the next year—fresh produce remains highly vulnerable. If El Niño brings prolonged droughts or excessive rain, fresh produce prices are likely to experience major spikes.
Furthermore, Abraham emphasized that fuel is a critical input cost across the entire agricultural supply chain, from the farm gate to the retail store. As fuel prices continue their upward trajectory, the likelihood of food prices following suit remains exceptionally high, leaving South African households under continued and growing financial pressure.