The latest Cost of Living Report by the Competition Commission paints a sobering picture of the pressures South African households face. For township entrepreneurs, the crisis is even more acute because it affects both their homes and their businesses.
Key findings from the report:
- Food and non-alcoholic beverages account for 40% of spending in the poorest households.
- Over the past five years, electricity prices rose 68% and water prices 50%, both far above inflation.
- Transport costs, driven by taxi fare increase, continue to erode disposable income.
- Education costs have risen 37-42%, while internet access- now a basic business tool – remains unevenly affordable.
- Many staple foods show sticky retail prices, meaning even when input costs fall, township families don’t see relief at the till.
From a township entrepreneur’s perspective, this means:
- Reduced customer demand: when families spend more on transport and electricity, they spend less at spaza shops and local businesses.
- Higher operating costs: small businesses face rising input costs, from electricity to stock, while margins are thin.
- Stalled growth: high interest rates and loan repayments limit investment and expansion.
At TEA, we see this reality daily. Entrepreneurs are innovating and pushing through these challenges, but the environment is tough. If we are to unlock the township economy’s potential, we must:
- Push for fair pricing and better market transparency in essential goods.
- Ensure affordable access to energy, transport and digital services.
- Strengthen support systems for township entrepreneurs, from funding to market access.
The cost of living crisis is not only a household issue, it is a growth issue. Without urgent focus, rising costs will continue to weaken the township economy, deepen inequality and stall inclusive development. As part of these growing challenges, we have been inspired to host our 7th annual national Township
Economy Summit 2025 under the theme Inclusive Economic Future. This engagement will bring together policymakers, corporate leaders and government institutions into one room to address the very question at hand: how do we make the cost of living more accessible for households, and more enabling for the township businesses that are driving inclusive growth?
