The Competition Commission has taken a significant step in understanding the financial strain faced by South African households with the launch of its inaugural Cost of Living Report. The publication examines the affordability of essential goods and services, spotlighting the economic pressures that are particularly acute for low-income households amidst fluctuating prices and growing inequality.
This comprehensive report builds on the commission’s Essential Food Price Monitoring (EFPM) Report, which was initiated in 2020. It broadened its scope to include not just food items, but also critical non-food categories that weigh heavily on household budgets. The new report considers utilities, housing, healthcare, transport, education, and other essential expenditures that collectively form the backdrop of South Africa’s cost of living crisis.
According to the commission, key findings reveal that while some prices are administered by the government—such as electricity and water—others have experienced troubling trends. For instance, utility costs have surged dramatically: electricity prices have skyrocketed by 68%, while water prices have risen by 50%, far outpacing the overall inflation rate of 28% during the period from 2020 to 2025.
In terms of housing, the cost of renting homes has increased moderately, remaining below overall inflation rates. However, the rising cost of healthcare services presents a worrying prospect, given that only 16% of the population is currently covered by medical schemes. General practitioners’ service fees have spiked, indicating a growing burden on households needing medical attention.
The transport sector has not been spared either; minibus taxi fares are prone to significant increases, often linked directly to spikes in petrol prices. Once adjusted for fuel hikes, these fares tend to stick, continuing to strain budgets despite fluctuations in petrol costs.
Education costs are also on the rise, with primary education inflation recorded at 37% and secondary education inflation reaching 42%, both figures surpassing general inflation. In contrast, funeral insurance policies have remained relatively stable, a positive note for many low-income families relying on these services. Similarly, while internet costs are crucial for modern-day living, they have remained below general inflation, delivering some relief to consumers, especially in the wake of the commission’s earlier Data Services Market Inquiry.
One of the most troubling aspects highlighted in the report relates to food prices, which constitute a large part of household expenditures. The commission has raised concerns about the disconnection between producer costs and final shelf prices, calling attention to a phenomenon dubbed “rocket and feather” pricing. This occurs when food prices surge in tandem with increased production costs but do not decrease promptly when those costs fall, ultimately exacerbating financial pressures for ordinary consumers.
As South Africa grapples with these rising costs, this report serves as a vital resource for understanding the multifaceted nature of economic pressures faced by its citizens. It aims not just to track costs but to galvanise discussion and action, especially in support of the country’s most vulnerable populations.