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The Cracks are Turning into Crevasses – Counting the Real Cost of the Crazy Cost of Living in South Africa

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The Cracks are Turning into Crevasses – Counting the Real Cost of the Crazy Cost of Living in South Africa

“Never go to war with the man who has nothing to lose.”

Variations of this quote have been attributed to several people over the years, including Robin Williams and Baltasar Gracian. But the important thing is actually not who said it, but rather how frighteningly apt it is to the situation we’re experiencing in South Africa right now.

We’ve suffered through the worst of the Covid-19 crisis but are still dealing with lingering, senseless restrictions.

We’re enduring wave after wave of loadshedding with no apparent end in sight.

And now we face crippling electricity price hikes and record-high fuel prices – both of which have a knock-on effect on the cost of everything else, particularly food.

My family’s food bill, for example, has risen by R800 a month since the beginning of the year. My salary, sadly, has not. And I know I’m not the only one trying to find this much extra money in an already stretched budget.

I also know that despite this, I’m still one of the more fortunate ones. As much as I’m feeling the pinch, there are tens of thousands of South Africans far worse off than me.

But as a nation, in one way or another, we are being pushed to the brink.

The way I see it, there really are only two choices: fall off the edge or push back – hard.

So many South Africans have lost pretty much everything in the past two years. They have nothing left to give, and nothing left to lose.

And yet somehow, they’re still losing.

The latest cost of living increase is hitting areas of the population that have previously managed to weather the situation reasonably well. But now they’re having to cut costs. Many are letting their domestic workers go as they can no longer afford to pay them. This means thousands of people are left without work at the worst possible time.

People who used to spend their disposable income on luxuries, clothes and entertainment are suddenly not doing so. This has a knock-on effect for retail – and all the people who work in it.

Our country’s leaders are sitting on a powder keg of desperate, exhausted, frightened, angry and bitterly disillusioned people. Yet their lack of any meaningful action to alleviate the situation would seem to indicate they are either largely oblivious of the suffering of their citizens or are so far removed from it themselves that they simply can’t muster up the enthusiasm to care.

Clearly, they like living in their Utopia, where they can continue to rob our country blind without consequence.

Am I the only one who sees parallels between them and France’s famous Queen Marie Antoinette who, upon being advised that her people didn’t have any bread allegedly retorted, “Then let them eat cake?”

Interestingly, she was later publicly guillotined following the abolition of the monarchy in France…

Throughout our country’s own history, whenever our people have decided they’ve been pushed too hard and too far for too long, they rise.

You only have to look at the Soweto uprising in June 1976 (which we commemorate this coming Thursday) to see what happens when people decide they’ve had enough.

Desperate times cause people to take desperate measures, and there’s no doubt these are desperate times.

And in case you think I’m prone to making mountains out of molehills, just take a look at some of these statistics:

  • According to the Automobile Association, the fuel price increased from R14.86 per litre to a staggering R24.17 in the 18 months from 1 January 2021 to 1 June 2022.
  • Millions of South Africans now spend up to 40% of their income just to get to work and back.
  • Tiger Brands, South Africa’s largest food manufacturer, expects prices of basic food items such as bread, maize meal and baking flour to rise by between 15% and 20% in the coming months.
  • SARS reports the RAF fuel levy recently recorded its highest increase since 2008. Combined with the general fuel levy, this brings the tax portion of every litre of fuel to around 40%.

A quick caveat here…

I know there are people who are quick to point out that the total tax portion of fuel in Europe, for example, is around 60%, so we shouldn’t complain.

I think it’s fairly obvious, however, that we cannot possibly compare ourselves to Europe.

According to an article in Business Tech, the average monthly salary in South Africa is R23 982. However, there are many thousands who earn far less than this and are, in fact, closer to the average minimum monthly wage of R7 880.

The average monthly salary in the UK is around £4 000 (approximately R80 000). The UK taxpayer also sees a lot more bang for his tax buck than we do in South Africa.

So, back to the reality of the situation we face here…

A recent report in The Daily Maverick said, “As the fuel price rises and people get angrier at the government about this, it may actually intensify our national debate over what is causing this in the shorter term. The main cause of course is Russia’s invasion of Ukraine, which our government has vehemently failed to condemn.

“It is now fair to argue that the government is allowing South Africans to pay a very real price for the invasion perpetrated by its friends and allies. Kinda difficult not to see the problem with that, isn’t it?”

It’s a great question, and one to which the government has yet to provide a satisfactory answer.

Or any answer at all, for that matter.

Tempers are fraying and we need our government step in now to stop a bad situation from escalating into something even worse.

But instead, here’s what I see:

  1. Our Minister of Transport deciding to add a “traffic management levy” to vehicle licence fees and fuel sales.
  2. SARS flexing its muscles and threatening to punish business owners who have submitted their tax returns but not yet paid the amount they owe (instead of actively pursuing those who deliberately defraud the government by withholding millions in taxes). Way to create a business-friendly environment!
  3. Our own President, Cyril Ramaphosa, facing a criminal investigation after failing to report the theft of an alleged $4 million in cash from his farm in northern Limpopo province. (It is illegal to not report a crime).
  4. Increasingly stringent employment targets – because clearly we need to make it harder for people to find jobs.

South Africa is already riddled, cancer-like, with economy-eating corruption. How much worse is this likely to get as more and more people succumb to financial pressure? How many everyday people will soon become desperate enough to convince themselves that committing “minor” theft and defrauding their companies is justifiable under the circumstances?

We are perched precariously on the edge of a fiscal cliff.

As a kid, I used to watch the Road Runner cartoons. You probably know the ones where Wiley Coyote runs at top speed off the edge of a mountain, trying to catch the Road Runner. He realises too late that there is no longer any ground beneath his feet…

As an innocent child, it made me laugh.

As an adult in 2022, worried about the financial future of my family and this country, there’s nothing remotely funny about the situation we find ourselves in.

As a forensic investigator, I deal a lot with corporate and government corruption. I am frequently sickened by the abject greed I see in the fraud cases I investigate.

But my fear now is that acts of fraud and corporate theft are not only going to be perpetrated by the greedy, but by the worried, the desperate and the downright terrified.

I feel it’s beholden on me to sound a sincere warning to all businesses:

Be more vigilant. Your employees may not be “like that” but let me tell you: We are all “like that” when our children are crying with hunger.

As much as my heart goes out to all those who are genuinely struggling, I also know that if companies, particularly SMEs, go under because their employees defraud them, we are really in trouble.

Our economy needs all the jobs it can get right now, so we have to make sure companies stay afloat in order to provide them.

So, please be proactive. Make sure you have all the necessary systems in place to help you detect fraud before it takes hold.

I wish I could finish on a positive note. To leave you with some hope for how this situation will turn itself around and ease the pressure on all South Africans. But right now, I’m worried. Our country is paying the price – in more ways than one – for decades of corrupt leadership and bad decisions.

And as always, it’s the poorest of the poor who are being hit the hardest.