Johannesburg - South Africans have a challenging time ahead of them economically. The country has been experiencing a consumer inflation rate of 7.8%, the highest it’s been in over 13 years.
Data from Statistics South Africa (Stats SA) revealed that food prices in South Africa increased by 11.9% in September 2022, a 0.7% rise from August. Stats SA said the increase was the highest reading the country had experienced since January 2009.
When President Cyril Ramaphosa first addressed South Africans as the Head of State, he aimed to usher South Africans into a new era by prioritising SA’s economic recovery, implementing economic reforms to create sustainable jobs, continuing to fight corruption and strengthening the state. That was when the April 2018 consumer price index for food was 4.5%.
It was when the petrol price per litre was R15.79 for 95 octane and the price of diesel stood at R14.19. As of 17 October 2022, the price for 95 octane petrol and Diesel were sitting at R22.03 and R24.34 respectively. Much of the rise in food and oil prices has been attributed to factors such as the Russia-Ukraine war, the drought in South America, higher shipping costs and increased fuel price inflation.
The situation has South Africans fearing a financially-challenging festive season.
“We are suffering as South Africans,” said Ethel Makwana. “I get paid around R2 500 salary as a domestic worker but it no longer feeds us. I have to sell other stuff like recycling cans and containers to make extra cash. and work every day of the week. Otherwise, I have no money at the end of the month for my family here and in Zimbabwe.”
In August, the Competition Commission reported that it would investigate the price of basic food items (maize meal, sunflower oil, milk and bread). In a statement, the Commission said that the annual inflation in edible oils and fats was significantly higher than overall food inflation.
It said that it had initiated investigations into basic foodstuff value chains to monitor retailers and food producers acting in an opportunistic behaviour through price increases. However, there are some signs of hope in food prices declining over the next few months.
“In sum, the global grain and oilseed prices, which have been the major drivers of the surge in inflation, are starting to soften, which shows in the global indices,” said Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber.
“These global developments will, with time, also reflect in South Africa, and this could also be mirrored in the consumer food price inflation data in the coming months. Therefore, we expect the domestic consumer food price inflation to start moderating towards the end of 2022 and into 2023,” Sihlobo said.
A sector under Ramaphosa’s presidency that has regressed though is the country’s electricity crisis, which the President had promised to end. He had assured South Africans of the end of load shedding as far back as 2015 when he was still the Deputy President.
“In another 18 months to two years, you will forget the challenges that we had with relation to power and energy and Eskom ever happened,” he said when tasked by Cabinet in 2014 to turn around State-Owned-Entities that were in trouble.
In his 2021 State of the Nation Address, he aimed to “fix the fundamentals and pursue areas of growth” through the inclusion of renewable energy Independent Power Producers (IPPs). He promised South Africans that load shedding would be a thing of the past, however, the country is experiencing its highest levels of load shedding since the phenomenon began in 2007.
Eskom has shed over 2455 GWh over 1136 hours in a financial year according to data from the organisation, Nersa and CSIR. Financially through stage 2, the country has lost approximately R250 million a day (calculated at cost of unserved energy = 87.50 R/kWh). According to the CSIR, the strain on households will worsen before it lightens up.
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