South Africans getting poorer 

Independent political analyst JP Landman said the country’s per capita income will keep declining over the next three years, meaning South Africans will become poorer.

This was revealed at the Nedgroup Investments Cash Solutions roundtable on 24 April, where Landman addressed the current economic crisis.

He said there has been a 6% decline in per capita income over the last decade. 

“The last ten years have been marred by the effects of Covid-19 and stage 6 load-shedding, delivering a body blow to the economy,” he said. 

Landman predicts this trend will continue for at least the next three years, given population growth of about 1.8% per annum.

“In the next two to three years, we are not going to see much salvation,” he said.

Below is a graph showing South Africa’s GDP per capita from 1960 to 2022.

Source: World Bank

Investec chief economist Annabel Bishop said household finances show that real salaries deteriorated in 2023, with South Africans going into more financial distress in the final quarter of last year.

She pointed to data from BankservAfrica that showed real salaries dropped significantly last year, down 4.7% year-on-year.

This trend accelerated toward the end of last year. In the last quarter of 2023, real take-home pay dropped 1.4% year over year and 3.7% quarter over quarter.

In addition, BankservAfrica’s Take-Home Pay Index decreased by 3.7% quarter-on-quarter in Q4 2023.

Lower real salaries dampened South African retail, with retail sales dropping 2.3% in October and 0.9% in November.

These factors, combined with high inflation, a weak rand, and more debt inquiries, point to South African households’ financial distress towards the end of 2023.

Inflation is largely to blame for low real income levels. December 2023 was the first month since August 2023, when take-home pay increases exceeded CPI inflation.

Accounting for inflation, however, December saw only a stabilisation in take-home pay, with no improvement in real terms.

The only months in 2023 when real take-home pay improved were July and August when inflation slowed temporarily.

Unfortunately, Bishop said real incomes will likely contract further in the first quarter of 2024.


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