Tariff and rate hikes lead to food price increases

MUNICIPAL tariffs and the frequent interest rate hikes are some of the factors contributing to higher food costs. So is the recent repo rate increase of 50 basis points,.

This is according to Mervyn Abrahams, the programme co-ordinator at the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD).

The PMBEJD is an advocacy group conducting research projects that highlight the impact that economic changes in the country have on households.

The group’s recently released Household Affordability Index showed the cost of a household food basket in Durban increased by R9.26, month-on-month, in April. This was an increase of 2 basis points from R4 871 in March 2023 to R4 880. Year-on-year, the cost increased by R297. This was a 6.5% increase from R4 583 in April 2022 to R4 880.

In Pietermaritzburg, the month-onmonth cost increased by 1.6% to R77.19, from R4 892 in March 2023 to R4 969 in April 2023. The year-on-year cost increased by 14.6% to R633.72, from R4 335 in April 2022 to R4 969 in April 2023.

Included in the report was the cost of a basic nutritional food basket for a family of seven, which increased by 2% to R120.32, from R5 996 in March 2023 to R6 117 in April 2023.

The average cost to feed a child a basic nutritious diet also increased by 2% to R17.43 from R874 in March 2023 to R892 in April 2023.

Abrahams said: “We can no longer afford above-inflation increases. One of the big contributors to inflation are municipal tariffs, Eskom increases and Umgeni Water increases. These are very often above inflation and the consumer price index year after year.

“Anything above 7% is above inflation and thus unaffordable. It hits households. Wages had not kept pace with inflation so workers are earning less every year. Households are under tremendous financial stress.”