Food prices up 95% – Wages lag behind soaring prices

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JEREMY MAGGS: Now, the cost of living in South Africa is rising faster than wages, with the working and poor and vulnerable households obviously taking the hardest hit, and this is very disturbing. Now there’s a new report from the National Planning Commission [NPC], along with Unicef [United Nations International Children’s Emergency Fund], and it tracks more than a decade of data and is now offering urgent solutions and recommendations.

In that respect, I’m joined now by NPC Commissioner Makhiba Mollo to discuss the findings and what they mean for the country’s broader developmental agenda. Makhiba, the single most concerning trend that the report uncovered, what’s your assessment here?

MAKHIBA MOLLO: Thank you, Jeremy.

I think what’s clear is the incredible increase in the cost of food over the period that we’ve looked at, it has increased by 95%, and I think that we don’t really need data to tell us that.

I think it’s a lived experience for all South Africans that has clearly impacted everybody, but particularly the poor, and particularly those who are dependent on social grants.

JEREMY MAGGS: It raises questions, I guess, about whether the social grant framework is enough to shield the most vulnerable and, more broadly, whether wage policies are keeping pace with the rising cost of basic services and food as well.

MAKHIBA MOLLO: So I think what’s clear from the evidence is that wages are certainly not at all keeping up with the cost of living. I think across all sectors, wages unfortunately are failing to keep up and, of course, inflation has also wreaked havoc.

So by no stretch of the imagination are wages able to keep up with inflation or the costs of anything in any sector, really.

But when it comes to grants, more specifically to your question, I think it’s quite a difficult one. There has been an increase in grants over the last year. We’ve seen that the child grant increased a little bit. So did the foster care grant, the disability grant, I suppose grants across the board, really, the SRD [Social Relief of Distress] by R20. The question is, can those grants really keep up with the cost of basic goods? That’s clearly not the case.

I think there has to be more of a concerted effort to create possibilities for people to be able to derive an income and not have to rely on social grants. But unfortunately, the way things are currently, people have to rely on social grants.

JEREMY MAGGS: Are you able to give us a sense of tangibly how this cost of living is impacting poor and working-class households, and maybe where you could look at it from, where compromises are being made and where people are just being forced to deny themselves?

MAKHIBA MOLLO: Ja, I think there are a number of trade-offs. People generally have to choose between buying food for their children or buying clothes, paying for energy, for example. We know that the energy supply hasn’t been particularly reliable in any event. So people have to look for alternative sources of energy. These are all trade-offs that people have to make in the household.

When we launched the report on Friday, we also had a conversation about the fact that women particularly are inclined to skip a meal because they need to be able to ensure that the children have eaten. The other question is, how nutritious is the food that they’re eating anyway?

So there have been many compromises in terms of the quality of food, the consistency of food, the availability of food. Then, of course, this idea of women particularly skipping out on meals. The cost of education, of course, how are people supposed to access even basic education? Because in order for them to get to schools, for example, they have to pay for transport.

So there are these kinds of trade-offs where mothers are not necessarily able to send their children to school because they can’t afford the transport cost, even if education itself is free. But then what happens to the children during the day when the parents have to go to work and so on? Unfortunately, it’s a cyclical effect.

JEREMY MAGGS: Is the problem more pronounced in urban or rural areas or an even spread, do you think?

MAKHIBA MOLLO: It certainly looks like, based on the data, it certainly looks like it’s an even spread. But of course, you have a lot more rural people migrating to the urban areas, as we’ve seen over time, for different reasons. A lot of them are looking for better basic services or better access to services, and then some are looking for economic opportunities.

So we have seen that a lot of people are migrating from the rural areas, obviously also because there are fewer economic opportunities in the rural areas, and we’re starting to see that some provinces are starting to have more unemployed people, unfortunately, or more working poor. So even where people are working, they are now categorised as the working poor because the cost of living is impacting everybody.

But even in the more wealthier classes, even in the middle classes, we’re starting to see a narrowing of that inequality gap. That narrowing is not as a result of people becoming wealthier. It’s actually as a result of people becoming poorer.

JEREMY MAGGS: I suppose it would be difficult to put your finger on any immediate policy shifts that you could recommend to bring relief to low-income households. Turning something that’s this size around is not an easy job, and nor is it one that’s going to happen quickly.

MAKHIBA MOLLO: Ja, I guess the policymakers are really tasked with having to pay particular attention to the findings of the report and the gaps, and what needs to be done in the immediate term to try and relieve these factors. We know that there’s the budget, third time round. Hopefully, we’ll be lucky this time and it will actually get passed.

But these are the kinds of considerations, unfortunately, that the policymakers really have to pay attention to. What are the more immediate solutions? Ja, I guess that is the question of the day and I think the policymakers really do have to look at what they’re going to be putting into the budget, where they can cut costs that are unnecessary so that they can redirect expenditure towards social security.

I think those are critical conversations that they have to have, things obviously about providing job opportunities. Those can’t happen overnight but those need to be accelerated. I think that EPW [Expanded Public Works] programmes, community work programmes, those have to be paid particular attention to and definitely have to be accelerated.

I think that in the short term, we have to look at what’s going to happen with the budget and how much more can be channelled towards social security. I don’t know that there is much room, but there really does have to be a solution.

JEREMY MAGGS: I guess, through a slightly longer lens, maybe a rethink as well on the priorities in the next medium-term strategic framework?

MAKHIBA MOLLO: The priorities, I think, have been outlined. I think the problem is always around implementation, and I think that we as NPC have certainly been calling for greater focus on implementation, implementation, implementation.

I think that the targets are there, and I think that there are pathways, absolutely, to solutions, pathways to meeting some of these targets. Again, it’s all about implementation. It’s about commitment, of course, political will, and absolutely has to be underscored by acceleration.

I think that maybe we do have an opportunity now, with everything that’s happening in the world, with certain programmes having been unfortunately denied aid, it does give us an opportunity to look at more creative ways, more collaborative ways of trying to address some of these concerns.

But ja, I think it means that we all have to really come together and address, with a greater sense of urgency, a greater sense of pragmatism, these problems because they are certainly affecting all of us. As I say, even the middle classes are affected. I think if ever there was a time for all of us to come together as the playing field is being levelled, it is now.

JEREMY MAGGS: Thank you very much indeed for talking to me. That’s National Planning Commission Commissioner Makhiba Mollo. I do appreciate your time.

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