Study Reveals 45% of South African Adults Borrowing for Groceries Amid Rising Food Prices

Nearly half of South Africans struggle to afford food and electricity due to rising prices, highlighting the urgent need for government intervention to address the worsening cost of living crisis.

Mazhar Abbas
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Study Reveals 45% of South African Adults Borrowing for Groceries Amid Rising Food Prices

South Africans Struggle to Afford Groceries as Food Prices Soar

A recent study by the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) has revealed that 45% of adults in South Africa are borrowing money to buy groceries amid rising food prices and economic challenges. The Household Affordability Index, which tracks the prices of 44 basic foods from supermarkets and butcheries across major cities, showed that the average cost of the household food basket increased by 6.2% in April 2024 compared to the same month a year ago, reaching R5,336.31 per month.

The increase was primarily driven by higher vegetable prices, particularly a 44% rise in onion prices. The Johannesburg basket saw the largest increase, rising by R591.12 on a yearly basis, due to higher prices for staple foods like maize meal, rice, flour, sugar, and beans. The General Industries Union of South Africa (Giwusa) expressed disappointment at the findings, stating that the crisis of the cost of living is worsening, contrary to the government's claims.

Why this matters: The rising cost of living in South Africa is having a significant impact on the population, with many struggling to afford basic necessities like food and electricity. This study emphasizes the urgent need for government intervention and support to alleviate the financial burden on citizens and ensure access to essential goods and services.

A new FinScope Consumer South Africa 2023 survey further reveals that South Africans are spending over one-third of their income on food, with living expenses such as groceries, energy, transportation, and communication making up approximately 85% of their monthly income. Groceries alone account for 30.4% of expenses, followed by energy at 11.5%. The rising expenses are limiting access to education and insurance, and hindering debt repayment, with 23% of clients missing instalment payments.

Electricity Struggles: The report also shows that two out of every five people reported having no electricity in their homes in 2023 due to budgetary restrictions. The South Durban Community Environmental Alliance (SDCEA) has protested Eskom's electricity tariffs, stating that many citizens have experienced rising bills they cannot afford, resulting in cut-offs on essential services. Additionally, 86% of the country's 30 million economically active adults lack retirement plans, with priorities shifting from future savings to fulfilling immediate financial needs.

The FinMark Trust report further highlights the pressing financial challenges faced by those in South Africa's informal economy in 2024. Half of adult South Africans in the informal economy are struggling to afford basics like food and electricity, and the uptake of medical assistance and retirement products has decreased from 17% to 12% in the last 20 years. Funeral insurance remains the most popular type of insurance, with 48% of the adult population holding such a policy.

Economic Crisis Alert: The study's findings paint a grim picture of the economic situation in South Africa, with rising food prices and living expenses pushing many citizens to the brink. Giwusa has called for urgent government action to address the worsening cost of living crisis and provide relief to those most affected. As the country grapples with these challenges, the future response of policymakers to ensure that all South Africans have access to affordable food and essential services is uncertain.

Key Takeaways

  • 45% of South African adults borrow money to buy groceries due to rising food prices.
  • Household food basket costs increased by 6.2% in April 2024, driven by higher vegetable prices.
  • South Africans spend over 1/3 of income on food, with living expenses making up 85% of monthly income.
  • 2 out of 5 people reported no electricity in 2023 due to unaffordable Eskom tariffs.
  • Half of informal economy workers struggle to afford food and electricity, with decreasing insurance uptake.