The Outside view building of South African Reserve Bank in Pretoria. Picture: Bongani Shilubane/ African News Agency (ANA)
The Outside view building of South African Reserve Bank in Pretoria. Picture: Bongani Shilubane/ African News Agency (ANA)

Calls for the Reserve Bank to intervene on rising inflation on essential goods

By Silindile Nyathikazi Time of article published Apr 1, 2021

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Durban - CALLS are being made for the Reserve Bank to monitor more stringently inflationary increases on food, electricity and transport, and their impact on low-income households and the broader economy.

Part of the plea also included for the central bank to act decisively when such increases threaten the affordability levels of low-income households and damage the economy.

This comes as the cost of the Durban household food basket increased by R26,70 (0,7%) from R4 051,78 in February 2021 to R4 078,48 in March 2021, according to the latest Household Affordability Index released by The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD).

Over the past seven months, the cost of the Durban household food basket increased by R277,89 (7,3%) from R3 800,59 in September 2020 to R4 078,48 in March 2021.

The National Agricultural Marketing Council’s (NAMC) February 2021 Food Price Monitor showed that inflation on their basic urban food basket is 9,8%. PMBEJD data annualised for March 2021, shows that inflation on the Pietermaritzburg Household Food Basket is 12,6%.

PMBEJD’s Mervyn Abrahams said there was a question around the role of the Reserve Bank in isolating inflation on core household goods and services that low-income families spend most of their money on.

“The Reserve Bank seems not to display the same level of passion and consistency in intervening to keep the level of inflation on essential goods and services for low-income households down as it does when wage levels are being negotiated.

“For example, there appears to be no intervention from the Reserve Bank when Eskom decides to increase electricity tariffs by 15,63%, or when food prices rocket to above 10%, or when public transport taxi fares increase by 7% or even the 25%, as seen in Gauteng last year,” said Abrahams.

Consumer Specialist and Right Activist Ina Wilken said: “It is about time that a body like the Reserve Bank starts monitoring more closely, especially where basic foods and commodities are concerned. People are struggling, and thousands are living under the breadline, but inflation keeps on rising and we don’t know the reasons for it.”

Black Sash national director Lynette Maart said: “Given the increasing costs of food, electricity and transport, we wish to reiterate that government must extend the Covid-19 Social Relief of Distress (SRD) grant until such time that a Basic Income Grant is in place, and its value must be increased to at least the Food Poverty Line (currently at R585).

“Adults, who receive the Child Support Grant on behalf of children, must also qualify for the Covid-19 SRD grant. Ultimately, the value must match the Upper-Bound Poverty Line (currently at R1 268) for its maximum benefits to be realised.”

Meanwhile, the South African Municipal Workers’ Union (Samwu) said this was precisely why it was currently making wage and salary demands for its members.

“We are not surprised by these findings as our own research also point to alarming increases in the cost of living which is why it makes sense for workers to get increases in their wages and salaries. We are very aware that inflation increases get pushed to the consumers which is why we are demanding a R4000 salary increase for all workers so they can live a decent life,” said Samwu deputy general-secretary, Dumisane Magagula.

Daily News

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