eBusiness Weekly
South Africans grappling with the burden of escalating living expenses are now going into debt to pay for their groceries.
This is according to FinMark Trust’s annual FinScope Consumer South Africa 2023 report, released Tuesday. The report shows that 40 percent of South African adults borrow money to purchase food.
The data comes as the Pietermaritzburg Economic Justice & Dignity Group’s (PMBEJD) monthly household affordability index shows that in April, the average household basket costs R5 336.31.
This represents a month-on-month increase of R58.38 (1.1 percent) compared to March when it cost R5 277.93. It is also a year-on-year increase of R312.26 (6.2 percent) from April 2023, when it cost R5 023.95.
According to PMBEJD’s report, the increase in April’s household food basket was primarily driven by higher vegetable prices, especially onions. Furthermore, 27 foods’ prices rose in April while 17 decreased.
With the national minimum wage at R27.58 per hour, which equates to R220.64 for an eight-hour workday and R4 633.44 for the typical 21-day workmonth, an individual earning this would find it challenging to afford an average household food basket, further confirming FinMark’s finding.
FinMark’s report also reveals that 30 million (68 percent) South Africans receive social grants. While these grants serve as a lifeline for many, they often fall short of covering basic needs.
For instance, the child support grant is R530, whereas the average cost of a basic nutritional basket for children is R959.38, and the food poverty line, as calculated by Statistics South Africa, is R760 per capita per month.
This indicates that the child support grant falls 30 percent below the food poverty line and 45 percent below the average cost needed to secure a basic nutritious diet for a child.
More alarming figures
The report has uncovered a range of concerning findings, with food insecurity being just one of them.
FinMark’s data shows nearly 20 million South Africans struggle to afford electricity.
The report also highlights that many individuals prioritise saving for essentials over future financial goals, as evidenced by 29 million (86 percent) economically active adult South Africans not having a retirement plan. Additionally, 6.8 million (15 percent) South African adults rely on tips as a source of income.
Overall, South Africans’ financial well-being is deteriorating, with only 24 percent classified as financially healthy, 43 percent as financially coping, and 33 percent as financially vulnerable.
This represents a shift from 2022 when 31 percent were financially healthy, 35 percent were financially coping, and 34 percent were financially vulnerable. — Moneyweb
