News in South Africa 4th November:

1. Food prices continue to climb:

Times are tough and are getting increasingly more difficult for consumers in South Africa.

Food prices continue to climb
Image taken by: Uriel Mont

Petrol prices are rising almost on a monthly basis, often above inflation – and to a record high on Wednesday – while food prices continue to climb and Eskom continues its load shedding regime amid constant breakdown’s in the country’s power infrastructure.

The scale of South Africa’s financial woes will be revealed on 11 November, when finance minister Enoch Godongwana tables the 2021 Medium Term Budget Policy Statement.

food prices climbed again in October, data from the latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) showed. The group showed that basket prices over the last 12 months have increased by 10%, far outpacing headline inflation.

The average Household Food Basket increased by R98.08 (2.3%) month-on-month, and R400.83 (10.2%) year-on-year. In October 2021, the average Household Food Basket costs R4,317.56. “The rise in food prices in October is in line with our predictions and are set to continue into 2022,” the Maritzburg based group said.

It said that the massive electricity tariff hike of 14.59%, effected in June and July 2021, had to result in price hikes of goods and services down the line. These increases are now reflecting in higher food prices on supermarket shelves, it said.

“October further typically sees higher vegetable prices (specifically potatoes, butternut, and tomatoes) due to seasonal changes: potatoes, for example have been harvested in the Free State and Limpopo (unfavourable weather conditions resulted in lower yields), and the next crop in KZN will be ready from December.

“We are also seeing some anomalies in food prices across areas, with a spike in maize meal prices in parts of Joburg and Cape Town (South Africa has a bumper maize crop this year), including higher milk, amasi and egg prices, higher poultry and meat prices, and bread prices in some areas.”

Cape Town recorded a surge in prices in October month of R174.49 (4.2%) month-on-month. Cape Town prices have tended to be moderate over the past year, October has seen a shift which brings the total cost of the basket (R4,280.67) more in line with Joburg (R4,305.69) and Durban (R4,327.06) prices.

“Rising food prices, which are likely to continue into 2022, will put severe pressure on households whose incomes remain low through low baseline wages and low-level social grants and whilst jobs remain elusive. Monthly food expenses take up a large portion of income.

The index tracks food price data from 44 supermarkets and 30 butcheries, in Johannesburg (Soweto, Alexandra, Tembisa and Hillbrow), Durban (KwaMashu, Umlazi, Isipingo, Durban CBD and Mtubatuba), Cape Town (Khayelitsha, Gugulethu, Philippi, Langa, Delft and Dunoon), Pietermaritzburg and Springbok (in the Northern Cape).

The total basket is well beyond the affordability thresholds of families living on low incomes, the group said, noting that the National Minimum Wage for this same period was R3,643.92.

  • The Pietermaritzburg (KZN) basket was R4,189.88
  • The Durban (KZN) basket was R4,327.06
  • The Joburg (GP) basket was R4,305.69
  • The Cape Town (WC) basket was R4,280.67
  • The Springbok (NC) basket was R4,628.01

2. Votes nearly tallied:

Vote counting is nearing completion, with the IEC to make the official declaration later on Thursday.

With over 97% of votes counted, a clearer picture of the election has emerged, showing steep losses for the ANC and smaller losses for the DA in many of their strongholds.

No party managed to secure an outright majority in Gauteng’s major metros – Johannesburg, Tshwane and Ekurhuleni. This trend carried through to eThekwini and Nelson Mandela Bay.

Only three of SA’s major metros have a majority party: the DA in Cape Town and the ANC in Buffalo City (East London), and narrowly in Manguang.

See results for the elections on News24: Municipal Election Map 2021.

3. Coalition governments forming:

Political bartering has started as the country hits a record number of hung municipalities after a local government election. At least 52 municipalities will need coalitions – double the number of 27 after the 2016 municipal polls.

In some municipalities, the African National Congress (ANC) lost support to breakaway parties, while in others residents’ organisation scored big.

The Western Cape has the lion’s share of hung municipalities, standing at 16. This is seen as a massive rejection of the Democratic Alliance (DA) in the smaller municipalities outside of Cape Town. New parties, such as the Patriotic Alliance, Good and other community parties, will be kingmakers in that province.

The country’s economic hub, Gauteng, has five hung municipalities excluding the metros. So far, Lesedi municipality is the only one where the ANC has won by majority – over 50% – but the seat allocation has left the party with 13 seats and opposition parties have equally received an accumulative 13 seats.

It is the first time that Mpumalanga – traditionally an ANC stronghold – has two municipalities where the ANC was pushed below 50%. Lekwa Local Community Forum has emerged as the second biggest party in the area with 19.43%, while in Steve Tshwete municipality, the ANC has declined to 36.85%, followed by the DA and Economic Freedom Fighters.

In Free State, ANC breakaway party Map16 pushed the ANC below 50% in Maluti-a-Phofung, where President Cyril Ramaphosa campaigned hard. No party has a governing majority in Metsimaholo and Moqhaka.

In Kwa-Zulu Natal, there are six hung municipalities, with the National Freedom Party dominating in eDumbe with 33.54% and the Inkatha Freedom Party is dominating in eMadlangeni.

However, the ANC has made it clear that it is “not desperate” and will gladly be in opposition benches. The DA is looking for stable coalitions but has generally ruled out the EFF from talks after the latter collapsed coalitions following the 2016 elections. The EFF has taken a more humble approach and called for egos to be set aside in the coming negotiations. Newcomer Action SA, however, says it won’t work with the ANC.

4. Sars re-enables disability claim relief:

A massive outcry by civil society, parents and educators on the ability of taxpayers to claim relief for costs related to the education of the disabled has resulted in the South African Revenue Service (Sars) doing a complete turnaround.

Harmful changes implemented in 2020 and again this year, which would have rendered many parents unable to afford special education for their physically impaired or disabled children, have now been thrown out the window.

Sars said in a statement that “after much deliberation” it has decided to revert to the method of calculating the qualifying medical expenses for school fees as set out in the 2012 Disability List.

Sharon Smulders, project director of tax advocacy at the South African Institute of Chartered Accountants (Saica), says this is a “welcome change” – but that it should never have happened in the first instance.

“It is a good start, but we are hoping that it is not the end of discussions to improve the lives of the children and also their parents.”

Keith Engel, CEO of the South African Institute of Taxation (Sait), also believes that Sars’s revised position will be “overwhelmingly” viewed as a welcome change.

The difficulty for Sars is that although legislation may require a more theoretically pure approach, it should in fact better recognise the hardships of disabled children in an area where public support is largely absent.

The list of qualifying expenses at special education schools now includes school assistant or classroom costs and school fees, with the latter limited to the amount in excess of the fees that would have been payable if the person attended the closest fee-paying public school not specialising in learners with special educational needs.

It will also include schools not specialising in learners with special educational needs, limited to additional expenses incurred and paid as a result of the disability.

5. Toys set aside for Christmas:

As global shipping constraints continue to threaten supply chains, South African retailers Shoprite and Toys R Us have made plans to get toys on shelves in time for the critical Christmas holiday season.

Global supply chains have been facing significant disruptions, causing delays and shortages of goods worldwide due to the Covid-19 pandemic. As a result, retailers of toys are contending with extended turnaround times and steep shipping costs that are making securing new stock burdensome.

Despite the shipping crisis, the Shoprite Group, the largest supermarket toy retailer in the country, said it has managed to secure 45% more stock than last year.

The retailer said this would ensure that a wide range of toys is available for consumers to choose from.

“The group’s supermarkets will be fully stocked as it ordered well in advance, avoiding the current situation where skyrocketing container prices are impacting toy prices and availability,” Shoprite said.

One of the leading toy retailers in the country, Toys R Us, said while it was not exempt from the current global supply problems, it planned its seasonal stock in advance to avoid being majorly impacted.

“The large majority of our seasonal stock is already in stores, with the balance landing this month in time for the festive season,” said Catherine Jacoby, Marketing Manager at Toys R Us.

Although some new release toys were also impacted and delayed, the retailer expects the new stock to start trickling in from mid-November to early December.

All information sourced from articles posted by: BusinessTech, News24, EWN, Moneyweb, and Business Insider.

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