Food Prices Surge 95% While Wages Lag Behind

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JEREMY MAGGS: The rising cost of living in South Africa is significantly outpacing wage growth, placing a heavy strain on the working poor and vulnerable families, which is alarming. A recent report by the National Planning Commission (NPC) in partnership with Unicef reveals over ten years of data, presenting urgent solutions and recommendations.

I am now joined by NPC Commissioner Makhiba Mollo to delve into the report’s insights and their implications for the nation’s broader development goals. Makhiba, what is the most concerning trend noted in the report? What is your perspective?

MAKHIBA MOLLO: Thank you, Jeremy.

Our findings clearly indicate that food prices have skyrocketed, with an increase of 95%. This is evident without even needing statistics.

This shift has been a lived experience for all South Africans, affecting everyone, particularly the underprivileged and those dependent on social grants.

JEREMY MAGGS: This raises questions about whether the social grant system effectively supports the most vulnerable and if wage policies can adapt to the rising costs of essentials and food.

MAKHIBA MOLLO: Indeed, evidence suggests that wages are not keeping up with the cost of living. In numerous sectors, wages are struggling to match inflation, which has hit hard.

Wages fail to meet inflation rates or the costs of goods and services across all sectors.

Concerning grants, we have seen some increases in the past year: the child grant, foster care grant, and disability grant, alongside a R20 uptick in the SRD (Social Relief of Distress). However, can these grants genuinely keep pace with essential needs? Clearly not.

There must be a more substantial push to create income-generating opportunities rather than relying solely on social grants, though current conditions necessitate that reliance.

JEREMY MAGGS: Can you share specific examples of how the cost of living impacts low-income and working-class families, particularly the sacrifices they are forced to make?

MAKHIBA MOLLO: Absolutely, there are numerous trade-offs. Families frequently have to choose between buying food for their children or clothing and struggle to pay energy bills, especially with the unreliable energy supply. These are the compromises households face.

During our report launch, we noted that women often skip meals to ensure their children are fed. Additionally, we must consider the nutritional quality of what they consume.

Many families make significant trade-offs concerning food quality, availability, and consistency. Moreover, education costs pose a burden—children may miss school due to transport costs, even though education itself is free. This exacerbates childcare challenges while parents are working.

JEREMY MAGGS: Is the situation more dire in urban or rural regions, or is it relatively uniform across areas?

MAKHIBA MOLLO: Data indicates a fairly even spread of the issue. However, many residents from rural areas are migrating to cities in search of better services and job prospects.

This migration stems from a lack of economic opportunities in rural regions, resulting in increased unemployment in specific provinces. Unfortunately, many employed individuals are categorized as working poor due to the overall cost of living affecting all demographics.

Even among the wealthier classes, we are seeing a narrowing inequality gap—not due to increased affluence, but because a rising number of individuals are becoming poorer.

JEREMY MAGGS: Identifying immediate policy adjustments to ease the strain on low-income families must be a daunting task. It’s a substantial challenge that won’t be resolved quickly.

MAKHIBA MOLLO: Indeed, policymakers need to carefully consider the report’s findings and address the identified gaps, with a focus on urgent relief measures. With the budget approaching, we hope for favorable outcomes.

Immediate solutions must be prioritized. Policymakers ought to evaluate budget allocations, identifying unnecessary expenditures to reallocate toward social security.

These conversations are crucial, as they highlight the necessity for job creation. While changes won’t happen overnight, they must be expedited. Programs like EPW (Expanded Public Works) and community work initiatives need particular focus and acceleration.

In the short term, we must assess budget strategies to determine how much can be directed toward social security. Although the available margin may be restricted, swift solutions are essential.

JEREMY MAGGS: Perhaps a reassessment of priorities in the upcoming medium-term strategic framework is warranted in the long run?

MAKHIBA MOLLO: The priorities are indeed established. The difficulty lies in execution. The NPC has consistently advocated for stronger emphasis on effective implementation of plans.

The targets are clear, and pathways to solutions are apparent, but success hinges on dedication and political will, highlighting the need for urgency.

This situation presents an opportunity for collaboration to tackle these issues, especially considering global challenges affecting aid availability.

We must urgently and pragmatically collaborate to address these issues that impact everyone, including the middle class. If there was ever a moment for unified action during levelling economic disparities, it is now.

JEREMY MAGGS: Thank you for sharing your insights. That was National Planning Commission Commissioner Makhiba Mollo. I appreciate your time.

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