How SA spends its money Featured

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It comes as no surprise that Statistics South Africa’s Living Conditions Survey (LCS) found that male-headed households have a higher average annual income than their female counterparts – R165 853 and R98 911 respectively – and therefore, have greater spending power than female-headed households.

The results of the 2014/2015 LCS show that the total annual household consumption expenditure between October 2014 and October 2015 was estimated at R1,72 trillion. The average South African household spent approximately R103 293 during the survey year, with the main components of that expenditure coming from housing and utilities, transport, food, and miscellaneous goods and services.

Housing, water, electricity, gas and other fuels remain the largest contributors to household consumption expenditure – 32,6% of the total. The average household South African household spent roughly R33 625 on this broad category during the survey year. Essentially, three out of every four rand spent by South African households goes towards these four key areas.

The research highlights many of the social inequalities in the country, but sheds light on a few interesting trends. Poorer households spend close to 40,0% or more of their total expenditure on food, with this proportion decreasing as one moves up income levels. Households at the top spent only around 8,0% on food. In comparison, on average, households spent more on recreation and culture (3.81%) than they did on education (2.45%), regardless of their income levels.

“There was a notable increase in spending on recreation and culture in 2015 as compared to 2011. The average South African household spent R3 933 per annum on this expenditure group in 2015, accounting for roughly 3,8% of total consumption expenditure (up from 3,0% in 2011). This indicates that households are recovering from the pressures of the global financial crisis of 2007/2008 that forced many to cut back on spending on recreation and culture,” the report states.

The research drills down in some detail, providing a view into South African purchasing priorities. In total, households spent around R82 billion on clothing and footwear, approximately 4,8% of total consumption expenditure. Interestingly enough, male-headed households spend more on shoes and clothes, (R5 343 a year), compared to female-headed homes, which spend only R4 364 on shoes and clothes a year.

Household consumption expenditure on communication was estimated at R58 billion or approximately 3,4% of total consumption expenditure. On average, households in South Africa spent R3 509 on communication between October 2014 and October 2015. Expenditure on communication recorded the largest growth in real terms at 67,6%, followed by recreation and culture (57,9%), furnishings and household equipment (24,9%), clothing and footwear (23,3%) and housing and utilities (10,8%).

There was a wide gap between populations groups in communications spend, with white-headed households spending on average R10 952 – more than any other population group. According to the LCS, white-headed households spent four times more than black African headed households on communication. While there was a wide gap in monetary terms, the proportions by population group were very similar. White-headed households had a proportion of 3,12% compared to 3,56% for black African-headed households, 3,44% for coloured-headed households and Indians/Asians were at 3,53%.

Surprisingly, households spent on average R2 531 and R2 181 on education and restaurants and hotels, respectively. Indian/Asian-headed households spent 3,45% of their total household consumption expenditure on education, as compared to 2,60% for coloured-headed households and 2,44% for black African-headed households. White-headed households spent the lowest proportion (2,30%) on education.

While the results won’t come as much of a surprise to anyone living in the country, South Africans are showing a slight betterment of their living standards compared to 2011. However, while the average South African household consists of three to four persons with an average annual income and consumption expenditure of R138 168 and R103 293 respectively, little can be done to change the socio-economic divisions in the country.

See how South Africans spend their income, curtesy of Brand SA:

How SA spends its money

 

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Crown Publications, one of South Africa’s largest business-to-business publishing houses, came into existence in 1986. Since then, the company has grown from producing a single magazine, Electricity SA (renamed Electricity+Control), to publishing six monthly magazines, three quarterlies, and a number of engineering handbooks.

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