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The total rand-value of VAT on basic food stuffs is very high and removes money from the purse that could be spent on more food; better diversity of food; and better-quality food. - Pietermaritzburg Economic Justice & Dignity Group (PMBEJD) February 2025 household affordability index.

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Sizwe sama Yende

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The year 2025 is going to be tough for the poor working class as they will hardly afford to buy enough groceries.

The Pietermaritzburg Economic Justice & Dignity Group (PMBEJD) household affordability index indicates that 59.9% of a workers’ minimum wage of R4 412 goes to electricity and transport.

Each worker supports, on average, four family members. This means that only R1 769 is left for nutritious food, but the problem with this is that a food basket of selected food items in February cost R3 731.

“In this scenario there is no possibility of a worker being able to afford enough nutritious food for her family.  If the entire R1 769. 83 all went to buy food, then for a family of four persons, it would provide R442.46 per person per month.  This is below the food poverty line of R796,” the PMBEJD February household affordability index indicates.

PMBEJD tracks the prices of 44 basic foods from 47 supermarkets and 32 butcheries, in Johannesburg (Soweto, Alexandra, Tembisa and Hillbrow), Durban (KwaMashu, Umlazi, Isipingo, Durban CBD, Hammarsdale and Pinetown), Cape Town (Khayelitsha, Gugulethu, Philippi, Langa, Delft and Dunoon), Pietermaritzburg, Mtubatuba (in Northern KwaZulu-Natal), and Springbok (in the Northern Cape).

PRICE OF 11 FOOD ITEMS INCREASED 

Key data from the household index indicate that in February 2025, the average cost of the household food basket was R5 313.

The average cost of the Household Food Basket decreased by R120.48 (-2.2%), from R5 433.70 in January 2025 to R5 313.22 in February 2025.

However, year-on-year the average cost of the household food basket increased by R35.92 (0.7%), from R5 277,30  in February 2024 to R5 313,22 in February 2025.

PMBEJD tracked prices of 44 foods in the basket and found that  11 foods increased in price, and 32 foods decreased in price.  Only   oranges remained unchanged in price.

PMBEJD noted that food prices dropped across the egg and dairy categories, vegetables, meats, the canned foods of fish and beans, cremora, sandwich fillers of peanut butter, jam and polony, and both white and brown bread.

This time last year, February 2024 prices also dropped down off the January 2024 prices.

“However, what is important to note here is that whilst so many foods dropped in price this month, the core staple foods of maize meal, rice, cake flour, white sugar, samp, and cooking oil maintained their prices, with very little movement either up or down (with changes in percentages either 0% or 1%),” PMBEJD said.

“It is these core staple foods which carry the highest rand cost in the food basket, and which women tell us are purchased first because these foods secure households against hunger.  For affordability to be eased, the core staple foods within the household food basket would need to come down by much higher amounts.” 

A VAT INCREASE WILL PLUNGE FAMILIES INTO HUNGER

The fact 22 out of 44 items in the total household food basket were subject to VAT made things worse for the poor.

“Foods subject to VAT make up 47% of the total cost of the household food basket in February 2025.  Zero-rated food items cost R2 829. 12 and foods subject to VAT cost R2 484.”

VAT on the total household food basket came to R324. 01 in February 2025 – meaning that 6.1% of the household food basket was made up of VAT.  

“The total rand-value of VAT on basic food stuffs is very high and removes money from the purse that could be spent on more food; better diversity of food; and better-quality food,” PMBEJD said.

The Institute for Economic Justice (IEJ) has warned that an increase in VAT would harm all households, especially poor households and low-income households.

The has been concerns that Finance Minister, Enoch Godongwana, intended to increase VAT by two percentage points to 17%.

The IEJ said in a statement that a VAT increase would reduce the buying power of consumers, and raise inflation levels.

“The proposed increase also needs to be viewed in the context of high real interest rates that continue to constrain demand in the economy. Despite the argument that zero-rating can work in tandem with a VAT increase as a way to simultaneously achieve higher revenues while protecting the most vulnerable people in society, previous efforts at zero-rating essentials such as food had mixed success as suppliers did not pass on the benefit of the VAT relief to consumers as was intended,” the IEJ said.

“Therefore, zero-rating of food items does not sufficiently lower prices for poor consumers, and it is likely to still leave poor households exposed to higher prices.”

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