Inflation is steadily creeping up again in SA, but it is being experienced most severely in some of SA’s poorest households.
The latest household affordability index, compiled by a Pietermaritzburg-based civil society group, showed that the average household food basket for low-income households from regions around SA, rose an annual 10.2% in October, with expectations that times will only get tougher.
The index — compiled by the Pietermaritzburg Economic Justice and Dignity Group (PEJDG) — uses food prices tracked directly by women data collectors off the shelves of 44 supermarkets and 30 butcheries in Johannesburg, Durban, Cape Town, Pietermaritzburg and Springbok. Regions covered include the likes of Soweto, Alexandra, Thembisa, KwaMashu, Gugulethu, Langa and Delft.
The 14.59% hike in electricity prices during June and July, is now being reflected in higher food prices on supermarket shelves, the PEJDG said in a statement on Wednesday. But a host of other factors are expected to compound the problem according to the group.
Higher electricity tariffs, worsened by the cost of sourcing back up supplies amid ongoing load-shedding, load reduction and blackouts, will increase the cost of production, transport and storage it said. SA jumped to stage 4 load-shedding on Wednesday, with power utility Eskom cutting 4,000MW from the grid.
Expected fuel price increases in November will run through the value chains, making agricultural production and transport more expensive, it said.
SA’s crumbling railway system has shifted more goods onto road, requiring pricier petrol, while pressure on highways will increase road travel times, adding to fuel and cold storage costs, it added.
The group is also expecting more civil unrest and disruptions of major highways and logistics networks, given the upcoming elections, and the “general desperation and frustration” of many people.
“Rising food prices, which are likely to continue into 2022, will put severe pressure on households whose incomes remain low through low baseline wages and low-level social grants, and while jobs remain elusive,” it said.
The index includes the foods and the volumes of these foods that women living in a family of seven members — an average low-income household size — say they typically try to secure each month.
Though the basket — which includes items such maize meal, sugar beans, potatoes, onions and frozen chicken pieces — cannot be considered the definitive basket for every low-income family in each area, it is a reasonable proxy of the typical foods these households try to buy, given their affordability constraints, according to the group.
Its research showed that the average household food basket reached R4,317.56 in October — a R400.83 rise year on year — and well above the monthly R3,643.92 national minimum wage for a general worker. In SA, one wage typically supports four people.
The pace of inflation has ratcheted up in recent months with the Stats SA-issued consumer price index (CPI) reaching 5% in September, with food price inflation reaching 7%.
As the prices of food items continue to rise, they have also robbed families of any nutritional diversity, as cheaper starch, sugar, salt and oil replace pricier meat protein, dairy and eggs, and fruit and vegetables, the PEJDG said.
The data comes as debate rages over ways to extend support to SA’s poorest households, in the wake of the Covid-19 pandemic, which saw the economy shrink 6.4% in 2020 and drove unemployment to an unprecedented high of 34.4% in the second quarter of 2021.
The governing ANC has explicitly backed a basic income grant (BIG); however, experts have warned that though it would reduce hunger and acute poverty, the government’s strained finances would not be able to sustain it without a long-term step-change in economic growth.
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