The rising costs of the typical family food basket, electrical energy and transport towards a nationwide minimal wage that doesn’t match the price of dwelling will drive the final employee in South Africa to underspend on food by at the least 46.8%.
This is in accordance to the Pietermaritzburg Economic Justice and Dignity (PMBEJD) Household Affordability Index for August 2022.
The PMBEJD calculated {that a} normal employee, paid a minimal wage of R4 081.44 for 22 days of labor (R23.19 per hour), will solely have about R1 700 left after paying for transport and electrical energy (which collectively price R2 371.50). As ‘a minimum nutritional basket of food for a family of four’ prices R3 212.97, PMBEJD estimates that staff’ households will underspend on food by at the least 46.8%.
“Progress in addressing the job crisis is too slow and wages for those who do have a job, and for people who are able to access some form of social grant, are still far too low, and are being decimated by higher costs of transport, electricity, and food,” notes the report.
Read: Inflation accelerates at quickest tempo since 2009
Food costs
It says the estimated price to feed a baby a fundamental nutritious food plan is R820.26 in August, a R72.96 year-on-year enhance.
“In August 2022, the Child Support Grant of R480 is 23% below the food poverty line of R624, and 41% below the average cost to feed a child a basic nutritious diet.”
The index, which tracked food costs from 44 supermarkets and 30 butcheries in Johannesburg, Durban, Cape Town, Pietermaritzburg, and Springbok, decided that the typical family food basket is R4 775.59, a 0.6% month-on-month enhance in August.
However, the basket is 12.6% costlier than final 12 months, having elevated by R534.47.
Speaking to Moneyweb, Ashburton Investments economist and portfolio supervisor Wayne McCurrie says the fact is that one is pressured to go down the worth chain when shopping for food by buying at Shoprite or Boxer as an alternative of Pick n Pay [for example].
“Most of the time, folks is not going to resort to consuming much less. They will as an alternative resort to consuming cheaper food. Perhaps they may eat much less meat and choose to purchase home model’s as an alternative of high-priced model meals in different classes.
“The only real encouragement is that we are over the worst of it,” McCurrie provides.
According to cash coach and facilitator at 1Life Insurance, Hayley Parry, a serious concern is that there’s a level the place one can’t cut the food spend any additional. “What is the most concerning with this backdrop is that people tend to turn to credit, which in turn will only make things worse for the consumer on a personal finance level.”
The index additional reported that food baskets elevated in Johannesburg by 2.5%, Springbok by 0.3% and Pietermaritzburg by 2.3%, and decreased in Durban and Cape Town by 0.9% and 0.5%, respectively.
It says August noticed 21 out of 44 meals enhance in worth, which is notably decrease than earlier months:
- Maize meal costs continued to climb in all areas.
- Flour costs additionally elevated in all areas besides in Durban.
- The worth of cooking oil elevated in Johannesburg by an extra R7.08 taking a 5L bottle to R246.91.
- Prices of white and brown bread elevated considerably in Johannesburg by 4% and eight respectively, and in Pietermaritzburg by 9% and 11%, respectively.
Another vital enhance was famous within the family home and private hygiene index which noticed a R23.85 month-on-month enhance, bringing the whole common price to R900.45 in August.
Municipalities elevated the value of pay as you go electrical energy on common by 7.47%. “In Pietermaritzburg, 350kWh of prepaid electricity increased by R56, from R731.5 to R787.5.”
Taxi fares elevated throughout the nation between R2 and R3, and in some instances by R5 per native journey.
“It needs to be cautioned that whilst the monthly price increase does appear to be lowering, the [cost of the] household basket is still increasing, albeit at a slower pace. We are not yet seeing any significant climb down in prices which would bring down the total cost of the household food basket in a substantial way and alleviate pressures on households,” reads the report.
“The high cost of food remains a major crisis for millions of South African families and continues to frustrate peoples’ need to live a full productive life, to be able to afford proper nutritious food, and be healthy and well and in control of their future.”
Parry says it will be important for South Africans to handle their cash effectively by avoiding credit score and if doable, by establishing an emergency fund.
“We don’t know what is going to happen in terms of the rising cost of living and the factors underpinning these issues. We’re usually not forced to develop the skill of managing our money when we’re financially secure. But this is an opportunity to get a financial education and to learn to focus on what we can control,” she provides.
Nondumiso Lehutso is a Moneyweb intern.
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