By Lehlohonolo Lehana.
South African households collectively spent an estimated R3 trillion between November 2022 and November 2023, with the average annual household consumption expenditure amounting to approximately R143 691, according to the findings of the Income & Expenditure Survey (IES) 2022/2023 by Statistics South Africa (StatsSA).
The survey offers insights into spending patterns of households as well as highlights the financial priorities that shape SA’s household economy.
SA households allocated 75,6% of their total household spending towards four main areas in 2023 which means that three out of every four rand was directed toward these essentials.
The four categories are: Housing and utilities, Food and non-alcoholic beverages, Transport and Insurance and financial services.
While the average annual household consumption expenditure in 2023 was R143,691, the median household consumption expenditure was much lower at R82,861.
The disparity between the average (mean) and median annual household consumption expenditure in South Africa points to a major income inequality within the country, according to the Survey.
A large portion of the population spends well below the national average which pulls the median household consumption expenditure down.
The gap between the average and median expenditure is a clear indicator of the unequal distribution of resources, with the wealthier households spending habits skewing the average, while most households operate with much lower expenditure levels.
Results also show that relatively fewer households amongst the Indian/Asian and white population groups are found in the bottom two quintiles. Almost four in every five (77,0%) Indian/Asian-headed households fell into the upper two expenditure quintiles. Majority of white-headed households (78,1%) fell into the upper expenditure quintile.
White-headed households reported the highest average household consumption expenditure of R409 520 per annum. Followed by Indian/Asian-headed households (285 306), coloured-headed households (R180 903) and black African-headed households (R108 461). The average household consumption expenditure of white-headed households was almost four times higher than that of black African-headed households.