Many people are living from hand to mouth in South Africa, and it doesn’t look like there’s a way out of the cycle of poverty any time soon for the indigent. What does the 2025 Budget proposed by Finance Minister Enoch Godongwana mean for households barely making ends meet?
Approximately 17 million South Africans live in households earning less than R3,500 per month, relying heavily on social grants and another 19 million people live in households earning between R3,500 and R8,000, according to a new study. This is the grim context of Wednesday’s Budget Speech, which has been criticised as failing to address economic growth.
Forced to skip meals
The two income groups (households getting by on less than R3,500 and those surviving on between R3,500 and R8,000), are often referred to as the “poor households” and “working poor”. They often, according to The Majority Report, a study from the UCT Liberty Institute of Strategic Marketing, face severe financial strain, frequently making daily sacrifices like skipping meals. They struggle with financial instability, further exacerbated by the current cost of living crisis.
The struggle to make ends meet
“For these households, every spending decision is carefully planned and scrutinized. They plan their spending based on specials. The financial pressure is so intense that many households struggle to meet even the most basic nutritional needs,” says the study co-author, Paul Egan from the UCT Liberty Institute.
During the study, one woman shared how she and her sister manage their finances by swapping salaries – one paid on the 15th, the other at month-end. This is a common solution for many, as people often rely on friends and family to close the gap. “Sacrifice, especially maternal sacrifice where mothers skip meals for their children, is also significant,” explains Standard Bank’s Executive Head of Middle Market, Motlatsi Mkalala,
Cycle of generational poverty
Motlatsi says most consumers in these households struggle to change their financial situation – many have not completed matric, and face unstable employment prospects. Scouting for food specials is a necessity. Those who have credit at spaza shops or borrow for food sometimes struggle to manage repayments.
Dreams deferred
Delayed gratification is also a big reality for these households, adds Motlatsi, with many parents or older siblings delaying their plans to study, buy a house or travel, hoping that someday everything will improve when their children or younger siblings succeed.
“For many the focus is on providing a better future for their children or younger siblings to improve the whole family’s future financial prospects. “But it’s tough to estimate how long they’ll wait for things to get better. With high unemployment and limited job opportunities, many are focused on survival and basic needs, like having enough food.” – Supplied