‘We are shielding the poor,’ says Ramaphosa on high cost of living

President Cyril Ramaphosa says his government has sufficient measures in place to shield poor South Africans from the high costs of basic necessities.

This is in light of the increase of the average household food basket by nearly 40% of inflation.

However concerning, the president insists that his government not only recognises the high cost of living facing South Africans, but has measures in place to cushion its most vulnerable.

“Food staples, such as maize meal, brown bread, rice, samp, milk, eggs and other basic foodstuffs remain exempt from VAT and this helps to cushion the lower income households in our country from the high prices.

“Our fiscal policy has been redistributive, prioritising poor and low income households. In the end, government spends about 60% and in the current budget, the minister of finances advises that [government] has edged up to 61% of its revenue in the social wage, which includes spending on social grants, education and health.”

Ramaphosa said tackling poverty and the cost of living is one of the three strategic priorities of the GNU and forms a strategic pillar of the medium-term development plan.

He said South Africa’s macroeconomic policy framework has been a key lever for shielding the poor from the high costs of living.

“The framework includes an inflation target, which has helped to keep prices low and stable and has been important in reducing average prices,” he said.

Ramaphosa explained that when inflation is high, the purchasing power of ordinary people becomes weaker — hailing the drop in inflation as a positive for poor South Africans.

“Food price inflation has fallen quite significantly, from 12.7% at the end of 2022 to 2.2% in March 2025. Headline inflation, which is a measure of the general costs of living, has also declined, averaging 4.4% in 2024, with inflation even moderating further to 2.7% in March 2025.”

He commended finance minister Enoch Godongwana’s tabling of expenditure and revenue plans in parliament last week , particularly highlighting the increasing of social grants to a rate higher than inflation.

In addition, Ramaphosa reminded MPs that government does provide free basic services such as water and electricity for indigent households.

“This is an essential measure in reducing the high cost of living. It has been calculated that in other areas it would have amounted to R400-R600 that is now given as a subsidy to our people. The bulk of local governments’ equitable share in this year’s budget goes towards a free basic services package, to over 11-million households in our country.

“This package of free municipal services in our country continues to be a key tool for reducing poverty and inequality, while raising living standards and facilitating access to greater economic opportunities for many of our people. It is essential that municipalities ensure that it reaches all of the households that need it.”

Ramaphosa said he frequently encourages municipalities to revamp their indigent register, despite some not doing so on a regular basis, which results in allocations being diverted to other purposes.

Another measure reported by the president is a network of over 3,000 centre-based food programmes established by the department of social development to provide nutritious food to poor and vulnerable people.

“These centres provide comprehensive services which include psychosocial support, welfare and developmental interventions while addressing the immediate need of providing nutritious food on a daily basis.”

He reflected on what he calls “structural factors” that contribute to a high cost of living, naming apartheid spatial planning as a factor.

“We are therefore reforming our housing policies to provide affordable housing closer to economic centres as well as improving the capacity of commuter rail services — making it less expensive for people to get to work and access services.”

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