Cost-of-living crisis hits all local households across income levels

The Competition Commission’s Cost of Living Report released on 4 September provides essential insights into the affordability of basic goods and services, allowing individuals and households to assess their financial capacity to sustain a reasonable standard of living.

Over the five years from 2020 to 2025, electricity prices increased by 68% and water prices went up by 50%. This is a much higher rate than general inflation, which increased by 28%. And although the cost of rent for houses and flats in South Africa increased moderately over the period, it remained below overall inflation.

The report did note that although rentals are below inflation, the first quarter of this year recorded the strongest rental growth in eight years, with the average residential rent surpassing R9,000, according to PayProp.

The pressure is felt across earning brackets, and food ends up being cut to accommodate the other costs.

Nomonde Booi* earns R15,000 as a junior communications officer. She lives in Johannesburg and spends R2,500 a month on food, which she said covers mostly vegetables and meat. To keep up with food prices, she advised: “Instead of supermarkets, buy fresh produce from vendors and farm markets. Buy meat at the butchery and condiments and other pantry stuff from supermarkets. I even changed my diet to accommodate the cost of living. It isn’t easy, but vegetables and meat are doable.”

Booi, who lives with her sister, said: “We spend R600 for lights and appliances. I rent a place that uses a gas-heated geyser for warm water and a gas stove for cooking. My rent, which is R4,000 monthly, includes water.”

She has a child who lives in the Eastern Cape with her mother because she wouldn’t be able to afford childcare (ranging from R2,500 to R6,000 a month) and school fees in Johannesburg. She sends money home for the child’s needs.

To supplement her salary, she now sells perfumes and is a runner for people who want to buy clothes and other items in Johannesburg. She buys them for the customer and sends them to the person (usually outside Johannesburg) for a fee.

The Cost of Living Report, prepared by Competition Commission economists Andiswa Sibhukwana, Tiisetso Lerumo and Raksha Darji, states that the high cost of living leaves little room for medical aid and other necessities. “Only 16% of the population [in South Africa] is covered by a medical scheme.”

According to Sibhukwana, “minibus taxi fares generally tend to increase only when there is a major spike in petrol prices. However, once prices are increased, they are ‘sticky-downwards’ insofar as those price increases are permanent and are not reversed once petrol prices decrease later.”

Grant earners

Maverick Citizen has been tracking food inflation and the prices of 14 basic food items that a consumer can buy with R370, the amount of the social relief of distress (SRD) grant.

In September, rice increased by R10, flour cost R15 more and sugar cost R5 more than the previous month. The basket remains unaffordable for a person relying on the SRD grant, factoring in money for transport to get the money, bank charges and other essential non-food items such as cosmetics, as well as data to apply for jobs or check on the online portal whether they will receive the grant the next month.

Read more: Social grant recipients battle to keep up with rising prices

Read more: From crisis to action: Insights from world food day on South Africa’s food security challenge

The Pietermaritzburg Economic Justice and Dignity group’s Household Affordability Index report for September revealed that the average South African worker spends more than 57% of their monthly earnings on transport and electricity, which leaves little room for food and other essential expenses.

The average cost of the foods prioritised and bought first in the household cost R2,865,08 in September. Meanwhile, the full food basket with 44 basic items that people usually buy cost R5,379,42 in September.

Thapelo Mokoena* lives in Matatiele in the Eastern Cape. He explained how he covers his monthly bills despite the rising cost of living. He earns R3,546 and pays R700 to rent a room.

“On food I spend [about R2,000]. For transport I can’t be sure about the amount because I sometimes get a free lift when I’m going to town because it’s near. I walk to work,” Mokoena said.

He tries to save by buying roll-on, soap and other things in bulk to last at least three months. He spends R300 on electricity, and water is part of his rent. “It is tough, but we make it work.”

Mokoena lives with his niece, who is in high school. Her father covers her expenses. “I only buy her data for about R200.”

High earners

According to the DebtBusters 2025 Money Stress Tracker, South African households are in a dire situation as salaries are no longer enough to keep up with the cost of living.

The report claims that South Africans earning more than R35,000 a month are drowning in high levels of debt, borrowing to stretch their budgets to meet their monthly needs and keep up with rising costs.

Nokwanda Zulu* is an early-career cardiologist in Newcastle in KwaZulu-Natal. She said she underestimated how costs can build up over time. When she first began working in the medical field she earned R60,000, but she found herself in a financial pinch because of the costs of building a home for her family, paying for rent and food and studying further.

“I was the breadwinner and wanted to assist my family, grandparents, aunties and cousins. I bought a car and all the costs built up until I was left with very little after all the obligations. I had no financial education, no adviser. I was just thinking I have the money, so I took on all these financial responsibilities. I was naive.”

Zulu said she ended up overindebted with little for food and transportation.

She had to work both in government and privately to be able to finish building her home and pay for her studies and other bills. Despite this, she has now learnt to save, invest and keep her costs within her income. She echoed Booi’s sentiments, saying she buys in bulk and pays cash.

Zulu said the rising cost of living can sneak up even on people who would be considered high earners in the middle class.

Presenting the Cost of Living Report, Sibhukwana noted: “These price surges have significantly reduced purchasing power, increased the risk of food insecurity and forced families, especially those in lower-income brackets, to make increasingly difficult financial decisions, often compromising on basic needs.

“The ongoing energy crisis has driven electricity tariffs significantly higher, resulting in a disproportionate impact on lower-income households that already spend a substantial portion of their earnings on necessities,” Sibhukwana said.

Mametlwe Sebei, president of the General Industries Workers Union of South Africa, told Daily Maverick that the cost-of-living crisis is fuelling starvation for the working class. The union has been vocal about the unsustainable gap between current wages and the rising cost of living.

“The double-digit increases in electricity (10.6%) and water (12.1%) are a form of state-led class war. Eskom and the water boards do not operate as public services, but as debt-financed entities mandated to guarantee revenue for financial creditors.

“Tariffs are not based on the cost of efficient production, but on a ‘cost-plus’ model that includes servicing an odious debt pile accumulated through corruption and State Capture. The working class is forced to pay, through soaring tariffs, for the looting of our own public infrastructure.

“This is the financialisation of basic needs, turning human rights into a source of profiteering for monopolies and capital accumulation,” Sebei said.

Sibhukwana unpacked the public health and access concerns. “Water tariff hikes raise concerns about access to drinking, cooking and hygiene water. Civil society has also warned of potential public health crises due to water affordability. Next, we will look at housing and utilities, but specifically actual rentals of houses and flats,” he said.

Education

Sibhukwana cautioned that the rising cost of education is noteworthy because primary education costs increased by 37% and secondary education costs increased by 32%. Both increases exceeded overall headline inflation, which rose by 28% over the five-year period from 2020 to 2025.

“In 2024, increases in education rose faster than overall inflation, which has otherwise been slowing. What could possibly be the cause of this or the drivers around this? This is increased financial pressure on schools, a growing number of fee-exemption applications, rising teacher salaries, higher municipal rates and unpaid school fees.

“There are growing concerns that rising education costs are forcing low- and middle-income households to make trade-offs between food and education-related expenses. It is, therefore, becoming important to monitor education inflation and make sure that it aligns and stays in tune with general inflation,” Sibhukwana said.

The report concludes that “with food and non-alcoholic beverages consuming over 40% of expenditure for the poorest households, the impact of food inflation is particularly acute”.

The Competition Commission is concerned that the market is not responding fast enough in lowering food prices when costs reduce, food inflation lowers and the market stabilises.

“While some staples like canned pilchards have shown signs of responsible pricing at the retail level, other essential food items, including eggs, IQF [individually quick frozen] chicken, brown bread, sunflower oil and white maize meal, exhibit troubling patterns of price stickiness and widening retail margins. In several cases, producer or input costs have fallen or stabilised, yet retail prices remain elevated, suggesting weak market responsiveness,” the report reads. DM

* Names have been changed.

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.