Since it became clear that the country had moved past the worst of the cost-of-living crisis, the question has been, “When will things get better?” (Waldo Swiegers/Bloomberg via Getty Images)
‘Resilient.” It’s a word often bandied around in the wake of some or other crisis.
In February, in an attempt not to extinguish our last glimmer of hope, President Cyril Ramaphosa declared that South Africa was a nation defined by its resilience. Last week, he made good use of this word again when he praised the country’s women. And now, after having escaped a technical recession and with unemployment on the retreat, the economy has been deemed resilient.
Used to imply an ability to roll with the punches, or a high threshold for pain, resilience is often attached to those who have little standing between them and near-permanent torture.
Since it became clear that the country had moved past the worst of the cost-of-living crisis, the question has been, “When will things get better?” It is a difficult question to answer, precisely because of the very thin layer of protection between South Africa’s small and open economy and the decisions made in the world’s ivory towers — a predicament that comes into full focus amid market-driven price volatility.
Earlier this week, motorists were told to brace for another hike in fuel prices — up to R1.40 a litre for petrol and R2.60 a litre for diesel. With the petrol price still almost 24% higher than it was two years ago, another hike seems too painful to bear.
Behind the petrol price increase is the consumer-pummeling combination of a weakened rand and higher oil prices. The latter reality is out of our government’s control. After all, this small and open economy can’t exactly stand up to a powerful oil cartel looking to protect their profits.
There are, of course, other ways of guarding against higher petrol prices, such as cutting the fuel levy — but a history of bad spending has left our government hesitant to surrender that revenue. Then, if you want to take it even further, there are opportunities to protect consumers from the deleterious effects (on their pockets and their health) of the fossil fuel market itself, including investing in clean energy technologies and supply chains. But such decisions are complicated by the government’s ongoing crisis of confidence insofar as policy is concerned.
Then there is the rand, which has weakened considerably over the past year. As some will tell you, South Africa’s currency-related pain is self-inflicted, the result of concerns over the country’s political and economic predicament.
Others will point to a much longer-term dilemma, created by the liberalisation of South Africa’s economy through the relaxing of exchange controls (used by governments to limit exchange rate volatility).
All this to say that it is incumbent on governments to build resilience — not by exposing its people to pain, in the hope that they get a thick skin, but by creating layers of protection so that the pinch isn’t so persistent.