SA may be stable, but food, transport and electricity prices still hit households hard

South Africa is holding the line on macro stability, but households are carrying the cost. When a working family cannot afford food, transport and electricity, that is not just an economic problem. It is a breach of basic rights and a failure of delivery. Rising prices in essentials are eroding access to dignity. In a country that constitutionally protects access to food and basic services, the lived reality is moving in the wrong direction.

Inflation pressure is building again, led by fuel. The South African Reserve Bank has signalled that risks to the outlook are on the upside as global oil prices firm. In an import-dependent economy, fuel is a direct pass-through into the cost base. Taxi fares rise, bus tickets increase, farm inputs climb and shop prices follow. This chain is immediate and visible. Households feel it first in transport and then in food. The effect is a smaller basket for the same wage. Protein drops out, fresh produce becomes occasional, and meals are stretched. That is the cost-of-living crisis in practice.

Growth is not providing relief. The International Monetary Fund (IMF) places South Africa’s growth near 1.0% for 2026, far below the 3% to 4% needed to reduce unemployment and lift incomes. Statistics South Africa continues to show an economy that has struggled to break above 2% for years. Unemployment remains above 30%, with youth unemployment far higher. At this pace, the economy cannot absorb new entrants to the labour market. Low growth locks in weak wage dynamics, which means households cannot keep up when prices rise.

The binding constraint is not a lack of capital. It is a failure to convert commitments into delivery. Investment sits at about 15% of GDP, below the 20% to 25% typically required for sustained expansion. Pledges are made, yet projects stall. Approvals are slow, coordination is weak and infrastructure performance remains inconsistent, particularly in logistics. Port delays, rail inefficiencies and administrative bottlenecks continue to raise the cost of doing business. These costs do not remain in boardrooms. They are passed directly to citizens through higher prices and fewer job opportunities.

Corruption intensifies the burden. When public funds are diverted, the poor pay twice. They lose the services those funds were meant to provide, and they face higher prices when projects fail or are delayed. The Zondo Commission exposed how procurement abuses and rent-seeking hollow out delivery, while the Auditor-General continues to flag material irregularities and waste. Every rand lost to corruption is a rand taken from clinics, schools, logistics systems and food access. That is not a technical failure. It is a direct erosion of economic rights.

The exchange rate adds pressure. In periods of global uncertainty the rand weakens, lifting the cost of imports, especially fuel and intermediate goods. This feeds back into transport and food. Households do not hedge currencies. They absorb the increase at the till. The pass-through is immediate and persistent, reinforcing the cost-of-living squeeze.

Fiscal limits constrain the response. Public debt remains close to 75% to 80% of GDP, and debt servicing absorbs a growing share of the budget. This reduces the space for targeted support and slows improvements in public services. It also limits the ability of the state to intervene decisively when cost pressures escalate. The result is a gradual withdrawal of state capacity at a time when citizens require more support, not less.

Some argue that the macro framework remains sound and that inflation is still within the target band. There is truth in that. The Reserve Bank has maintained credibility and the financial system is stable. However, stability without affordability is not sufficient. The IMF has warned that prolonged low growth entrenches inequality and weakens economic resilience. A stable system that cannot deliver improved living standards will not hold indefinitely.

Others attribute current pressures primarily to global factors. While oil prices and geopolitics matter, domestic inefficiencies amplify their impact. Countries with efficient logistics systems, predictable regulatory processes and strong institutional accountability are able to absorb external shocks more effectively. South Africa’s internal constraints magnify external volatility.

The policy response must therefore shift from broad signalling to precise execution. The immediate priority is to reduce administered and logistics-driven costs in the economy. This requires strict performance enforcement across port and rail operators, with measurable turnaround targets and real-time public reporting. Lower dwell times and improved freight reliability can directly reduce input costs for the food and manufacturing sectors. At the same time, regulatory approval processes for investment must be time-bound by law, not guidelines, with automatic escalation mechanisms where deadlines are missed. Delayed approvals are a hidden tax on growth and a driver of higher consumer prices.

On the fiscal side, expenditure must be reprioritised towards high-multiplier activities rather than broad allocations. This includes targeted support for public transport efficiency, not blanket subsidies, and investment in logistics corridors that directly reduce food and fuel distribution costs. Leakages identified by the Auditor-General must be treated as recoverable losses, with mandatory clawbacks and legal enforcement. Without consequence management, fiscal consolidation becomes a burden carried by the poor rather than corrected at the source.

Market structure also requires intervention. Competition authorities must actively address concentration in key food value chains where pricing power can amplify cost pressures. Transparent pricing mechanisms and enforcement against anti-competitive behaviour can soften the pass-through of input cost increases to consumers. This is not theoretical. It is a direct lever to protect household welfare.

South Africa does not lack policy direction. It lacks disciplined execution that translates macro stability into household relief. When prices rise and plates empty, the question is no longer technical. It is ethical and constitutional. Can citizens afford to live with dignity within the economy that is presented to them? At present, for too many, the answer remains no. DM

Dr Alex Malapane is an economist and CEO of the Market Intelligence Barometer Research Entity and a recipient of the Most Influential Man in South Africa 2025 award.

Professor Shamila Singh is the CEO of Sustainability Consult. Her career spans academia, policy development and strategic advisory roles across southern Africa.

Sele Yalaghuli is the former minister of finance of the Democratic Republic of Congo (2019-2021), where he relaunched IMF engagement after a five-year hiatus. He previously served as chief of staff to the prime minister. He also directed the national revenue authority, worked as an energy economist at the World Bank and is a senior fellow researcher at the University of Johannesburg.