Ramaphosa promises to protect SA from rising cost of living, but fuel levy can’t remain suspended
President Cyril Ramaphosa says government will do everything in its power to protect South Africans from unsustainable increases in the cost of living.
This after the price of fuel, which affects the price of other goods and services, has risen by a third in the 12 months to March 2022.
The increases have drastically affected the quality of life, especially for the poor, he said writing in his weekly newsletter.
“It has become increasingly more expensive to buy food and other essentials, to pay for basic services and to use public or private transportation. While these rising costs affect everyone, low-income households are feeling them the most.”
In a bid to mitigate the rising cost of fuel, government extended the suspension of the fuel levy for another two months to August, which will bring some relief to households.
While the suspension provided relief for many, Ramaphosa said it came at a significant cost to public finances, which affects other programmes of government, and “it will be difficult to continue this indefinitely”.
In April the Consumer Price Index recorded food inflation at 6.2% with basic food costing more and the price of some staple items such as cooking oil almost doubled.
Ramaphosa attributed the increases in the prices of fuel and food to “the consequence of events over which we have little control”. These include the ongoing conflict between Russia and Ukraine.
Government is doing what it can to shield South Africans from price increasesPresident Cyril Ramaphosa
“Both countries are major exporters to international markets of fertilisers, grains and oil seeds that are needed for a range of items such as cooking oil.”
Another factor is the lower agricultural output due to extreme weather events caused by climate change, including floods and droughts. SA was not the only country affected, he said.
“While many of these events are beyond our control, government is doing what it can to shield South Africans from current and future price increases. One of our greatest advantages as a country is a strong, independent Reserve Bank that has managed to keep inflation within a narrow target range, well below what many other countries are experiencing.”
The president said all hands on deck was required to get through this difficult period. Among other things, Ramaphosa said the country needed to focus on improving the nation’s food security to withstand these and future shocks. Government would heavily invest in small-scale farmers to grow food.
“We have a strong agricultural sector that continues to grow and create jobs. To further increase agricultural production and strengthen our food sovereignty, we are investing heavily in improving local capacity, supporting commercial and small-scale farmers and helping more people to grow their own food.
Government is also aiming to release state-owned land for agriculture and provide support to more small-scale farmers to expand their businesses and make them commercially successful.
“We are also focusing on establishing more public-private partnerships to support the expansion of black commercial farming through initiatives like the Partners in Agri Land Solutions and the Agricultural Development Agency,” he said.
In addition to boosting local food production, Ramaphosa said government’s extensive social grants system and zero-rating of basic goods help to protect the poor from rising costs.
“Through free basic services like water and electricity for indigent households, we can ensure no family goes without basic services.”
The president said corporates also need to ensure consumers do not pay more for food than they have to.
Ramaphosa lauded the Competition Commission for allowing public comment on the terms of reference for a market enquiry into the fresh produce market. Among other things, the commission noted the cost of fresh produce has been increasing at above-inflation levels, and this has had a disproportionate effect on the poor.
“The inquiry will examine if there are any distortions in the value chain that makes food more expensive.”
The president promised consumers will be protected against above-inflation prices, as was the case during the Covid-19 pandemic.
“We will use our competition policy to protect consumers against unjustifiable price increases and anticompetitive practices by businesses, as we did during the Covid-19 pandemic. Government will continue to monitor the situation closely and will do everything within its power to protect South Africans from unsustainable increases in the cost of living.”
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