The Free Market Foundation (FMF) calls for a comprehensive repeal of various regulatory and legislative provisions which are increasing the costs of everyday goods and services in South Africa.  

This follows after Statistics South Africa (StatsSA) released the latest CPI figures for July 2024. Although inflation seems to be cooling, the FMF warns that there remain doubts regarding the longevity of the trend absent substantive policy reforms. 

“Beyond those prices over which the government has fairly direct control, there are also numerous other forms of regulation and restrictions on doing business which constantly drive up the cost of basic goods and services in the economy,” says Dr Morné Malan, Communications Manager at the Free Market Foundation. “Inflation, thankfully, rose slower than expected, but that is no reason to presume the consumer will breathe a sigh of relief next time they go grocery shopping.” 

According to the FMF, a significant part of South Africa’s price inflation can be attributed to a variety of administrative and legislative initiatives which depress supply in the economy, whereas grants and subsidies serve to increase demand for products and services.

“Our economic policy with respect to tariffs and other restrictions on trade, licensing requirements, levies and taxes, and other artificial restraints on economic activity reflect an almost perfect recipe for higher inflation,” argues Malan. “The simplest and most effective means to alleviate the plight of South Africans struggling to make ends meet is to reduce the cost of essential items and services – or in this case to halt the actions which have unduly increased those costs.” 

The FMF stated that the much sought after relief from our present above-average interest rates would certainly be a welcome reprieve to indebted South Africans, but that such relief is only likely to come after inflation has sufficiently cooled to justify such a change – a process which has been significantly hamstrung through unreasonable government interference in the economy. 

“If the Government of National Unity (GNU) is serious about boosting the economy, lowering the cost-of-living for ordinary South Africans and restoring confidence to consumers and producers, then they must remove the countless provisions which have continuously impeded these efforts,” concludes Malan.