Response to the Competition Commission’s Cost of Living Report
The latest Cost of Living Report by the Competition Commission delivers a sobering truth: South African households are being stretched to breaking point. For township entrepreneurs, the reality is doubly harsh; because every increase eats away not only at the family dinner table, but also at the balance sheet of their businesses.
The Weight of Rising Costs
The numbers speak volumes:
- Food insecurity deepens – 40% of the poorest households’ income goes to food and non-alcoholic beverages.
- Utilities spiral – electricity prices have surged by 68% and water by 50% in just five years, far above inflation.
- Transport drains income – ongoing taxi fare hikes cut deep into disposable earnings.
- Education and connectivity stretch families- education costs are up 37-42%, while internet access, now vital for business, remains unevenly affordable.
- Sticky prices persist – even when supply costs fall, township families see little relief at the tills.
The Entrepreneur’s Dilemma
These rising costs create a vicious cycle for township businesses:
- Customers spend less – when transport and electricity eat household budgets, spaza shops, hair salons, and street vendors see fewer sales.
- Operating costs rise – thin margins shrink further as stock, energy and services climb.
- Growth stalls – high interest rates and repayment burdens stifle reinvestment and expansion.
Being both a household head and a business owner in the township economy comes with a double burden. Rising costs hit families at home and squeeze margins in their businesses simultaneously.
Breaking the Cycle
At the Township Entrepreneurs Agency (TEA), we witness the ingenuity and grit of entrepreneurs who continue to push forward despite these pressures. But resilience alone cannot carry a system stacked against fair growth. To unlock the full potential of the township economy, urgent steps must be taken:
- Demand fair pricing and transparent markets for essential goods.
- Secure affordable access to energy, transport and digital tools.
- Build stronger support systems, from funding opportunities to market access.
Rising prices risk deepening inequality and straining the township economy. They also threaten to stall South Africa’s broader vision of inclusive development.
Looking Ahead: Building an Inclusive Economic Future
These realities inspire our upcoming 7th Annual National Township Economy Summit 2025, under the theme Inclusive Economic Future. This gathering will bring together policymakers, corporate leaders and government institutions to wrestle with a critical question: How do we make the cost of living more accessible for households, while enabling the township businesses that drive inclusive growth?
The answers cannot wait. The choices we make now will determine whether the township economy continues to strain under the weight of rising costs, or whether it becomes the engine of resilience, innovation and opportunity that South Africa so desperately needs.
Overview on TEA
For the past decade, TEA has played a pivotal role in shaping South Africa’s township entrepreneurship landscape, consistently delivering tangible impact. To date, over 100 000 entrepreneurs have benefited from its training and support programme while more than 500 township-based businesses have received funding and growth assistance. Through a combination of workshops, skills development, research, and financial support, TEA continues to uplift entrepreneurs who are often overlooked by mainstream platforms yet are building thriving businesses within their own communities.
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