DURBAN, March 1 (IPS) – South Africa’s near-record food price inflation, load shedding, rising energy costs and further forecasts of fuel and interest rate hikes have eroded workers’ disposable incomes and further disadvantaged the poor – leaving analysts predicting the country was at heightened risk, including civilians unrest.
Head of policy analysis at the Center for Risk Analysis, Chris Hattingh, warned that lower fuel prices, as the latest figures from Statistics SA showed last week, had largely contributed to pushing annual consumer inflation down from 7.2 per cent in December 2022 to 6.9 percent in January, may prove to be only a temporary reprieve. The fuel price index fell by 10.5 percent between December 2022 and January, the data showed.
United Trade Union of SA (UASA) spokesperson Abigail Moyo said the state’s failure to provide food producers and retailers with enough water and electricity to run businesses efficiently had fueled inflation that eroded workers’ disposable income.
“Economically driven financial stress through no fault of their own has been a factor in workers’ lives for years. With items such as maize meal up 36.5 per cent since last January, onions up 48.7 per cent, sampling up 29.6 per cent and instant coffee up 26.4 per cent, it is clear that tough times are not over for households, she says. .
Business leadership South Africa CEO Busisiwe Mavuso also warned that unless there were “meaningful and targeted interventions”, the country could face an Arab Spring revolt.
Hattingh added: “This inflationary relief provided by the lower fuel price may prove to be temporary. The reopening of the Chinese economy is likely to push up international oil prices, affecting the bottom line in terms of higher fuel prices. South Africa is also more exposed to imported inflation. Should the costs and prices of manufactured goods and consumer goods and inputs increase, this will drive up inflation locally.”
“A major concern regarding the pressure on consumers is that inflation for food and non-alcoholic beverages was noted at 13.4 percent (annualized) in January. The last time this reading was this high was April 2009, at 13.6 percent,” said he.
In addition, the bread and cereals category recorded the largest increase of any product group at 21.8 percent, while meat inflation rose from 9.7 percent in December 2022 to 11.2 percent in January.
“A fundamental weakness in the economy – unreliable electricity supply – is likely to push prices and inflation higher throughout the year. This will result in more pressure on consumers and businesses and increase the potential for civil unrest,” he said.
He said load shedding was now a priced “feature of South African life”, as evidenced by the rand’s weakening to R19 against the US dollar.
Annual inflation, at 6.9 percent, was also outside the South African Reserve Bank’s (SARB) target range of 3-6 percent.
“With the latest data for January now in, the SARB could continue its rate hike cycle with another 25 basis point hike at the next Monetary Policy Committee meeting,” Hattingh said.
Independent crime and policing expert and former senior researcher at the Institute for Security Studies, Dr Johan Burger, warned that signs of potential unrest due to the rising cost of living and disillusionment were visible across the country.
He said most households in the middle and upper income classes had been forced to cut back on spending due to higher interest rates and the rising prices of basic food items.
“Those of us on a relatively stable income already have it increasingly difficult and have to think twice before buying anything, so you can only imagine the pressure people in lower income groups must feel,” he said.
“For many it has been like this for many years and it has gotten worse. Unemployment stands at 32.9 percent and unofficial unemployment is even higher. High levels of unemployment lead to high levels of poverty, which creates all sorts of social problems,” he said.
Burger said during the July 2021 robbery, much of what was stolen was food and merchandise that could be sold for cash.
“In some cases, people who went out to buy food were attacked and robbed of their food. Other instances that we’re seeing now is when a truck breaks down on the road near a community, and all of a sudden a flood of people come in and strip it of whatever it’s carrying — whether it’s food or something they can barter for food.” he said.
Burger said these incidents showed a “general instability” against the backdrop of a weakened criminal justice system that cannot deal with criminals effectively.
“The potential for large-scale disruption and looting and for large groups of people to gather and engage in popular uprisings can occur. When large groups of people are exposed to extreme levels of property over a long period of time, they create resentment and feel neglected by the state. They feel that their needs are not recognized, and with this resentment comes a disregard for the state, its laws and the police, and they feel they have the right to rise up and take what they need, Burger says.
“And if they rise up in large enough numbers, it will be very difficult for the state to suppress this kind of insurgency. The potential for this to happen is very real – it’s almost visible; it’s just under the surface,” he said .
Burger said all it took to raise concerns was a potential trigger, which had occurred in KwaZulu-Natal with a pro (former President Jacob Zuma campaigning for the July 2021 riots).
“The risk is that it could spread very quickly because these levels of poverty and distress exist in almost all of our communities across the country. In 2008, the xenophobic riots spread in a matter of days, and we saw 69 people killed and many more injured and displaced,” said he.
He warned that local protests over service delivery had been occurring for years, and if left unchecked, these too could reach a point where “resistance will explode.”
“There is a growing dissatisfaction with their situation, and many of the poor communities see themselves as the neglected part of South Africa. They have not received anything that was promised when democracy came in terms of employment and services, and they are starving when this is happening; there is a division between a section of our population and the institutions that govern us, which is why there is a real potential for large-scale insurgencies,” Burger said.
Head of the Justice and Violence Prevention Program at the Institute for Security Studies, Gareth Newham, said increased food insecurity and hunger, with around 60 percent of the population now living in poverty and a large proportion of households facing hunger every week, created a high level of despair and frustration.
“This challenge has been around for some time, and rising food prices could make it worse,” he said.
But he said the current causes of most public violence were labor-related disputes and service delivery failures.
“We don’t historically have a problem where food security has been a major driver of general violence, but that doesn’t mean it won’t be. There certainly can be a level of hunger that leads to that,” he said.
IPS UN agency report
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