Understanding South Africa’s Household Income and Spending

South Africa’s Household Income and Spending: What the Stats SA 2022/23 Survey Reveals

South Africa’s economic landscape has once again come under the spotlight with the release of the 2022/23 Income & Expenditure Survey (IES) by Statistics South Africa. The data paints a clear, if complex, picture of household income across the country and how they spend their money, and highlights the enduring inequalities that define South African society. From average income brackets to provincial disparities and racial economic gaps, the findings are as revealing as they are sobering.

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South Africa’s Total Household Expenditure Tops R3 Trillion

Between November 2022 and November 2023, South African households spent an estimated R3 trillion on total consumption. Just four categories dominated household spending:

• Housing, water, electricity, gas, and fuels
• Food and non-alcoholic beverages
• Transport
• Insurance and financial services

Together, these categories made up 75.6% of all household consumption, meaning that three out of every four rands spent in the country went toward these essential services.

How Much Are South African Households Spending?

The average annual household expenditure was recorded at R143,691, while the median expenditure stood significantly lower at R82,861. This discrepancy suggests that high-spending households skew the average upward, while the median provides a better sense of what a typical household spends annually.

• Male-headed households accounted for over 60% of all expenditure, averaging R159,315 per year.
• Female-headed households, which represented under 40% of the total, had a lower average expenditure of R123,346.

The Income Side of the Equation

The average household income in 2023 was R204,359, but the median income was only R95,770, again highlighting inequality in earnings distribution. There was also a striking difference between the earnings of households based on the head’s gender and race:

• Male-headed households earned on average R239,590.
• Female-headed households earned R158,481.
• White-headed households reported the highest average income at R676,375.
• Black African-headed households earned R143,632.
• Indian/Asian-headed households followed with R417,431.
• Coloured-headed households earned R260,816.

This income gap directly contributes to unequal spending power and quality of life.

Education and Income: A Strong Correlation

Education continues to be a powerful determinant of household income. Households headed by individuals with tertiary education earned an average of R577,415, nearly seven times more than those without any schooling, who earned R84,185. Those with:

• Primary education earned R98,139
• Secondary education earned R149,758

These figures point to the critical importance of education in breaking the cycle of poverty and bridging the income gap.

Geographic Disparities: Where You Live Matters

Provincial and metro-level data show major differences in both income and expenditure:

• Gauteng accounted for 36% of total household expenditure, with an average household spend of R170,628.
• The Western Cape followed at 18.4% but had the highest average household consumption at R229,636.
• Northern Cape contributed the least (1.7%) to national spending.
• The North West province recorded the lowest average household expenditure at R98,147.

At the metro level, City of Cape Town households spent the most (average: R248,539), while Mangaung had the lowest at R119,245.

Urban vs. Rural Spending

Urban households dominated consumption, accounting for 81.5% of total expenditure. Traditional areas followed at 15.3%, with farm areas trailing at 3.2%.

• Households in traditional areas had the lowest average expenditure: R84,502
• Farm areas had the lowest median expenditure: R59,503

This rural-urban divide remains a significant economic challenge.

Racial and Class Inequality

The survey’s quintile breakdown paints a stark picture:

• 45.3% of black African-headed households were in the lowest two expenditure quintiles, spending less than R25,063 per year.
• Only 13% of black African-headed households were in the top quintile.
• In contrast, 78.1% of white-headed households were in the top quintile.
• Indian/Asian-headed households also skewed toward the upper quintiles, with 77% in the top two.

The average annual consumption expenditure for:

• White-headed households were R409,520
• Indian/Asian households: R285,306
• Coloured households: R180,903
• Black African households: R108,461

Clearly, historical inequities continue to echo in current economic realities.

Income Sources: How Households Earn

The main source of income across households was:

• Work (68.8%)
• Rent (12.5%)
• Pensions and social grants (10.4%)
• Other sources, including capital income and individual transfers, made up the rest.

Calls for Policy Action

The data prompted debate in parliament. DA’s Darren Bergman expressed concern about the informal economy and the challenge it poses to tracking income and tax. MK Party’s Lucky Montana highlighted that despite good policy frameworks, implementation and inequality remain persistent issues.

Both parties urged the government to increase zero-rated food items to ease economic pressures, especially with a potential VAT hike on the horizon.

A Nation of Two Economies

South Africa’s household income and expenditure figures tell a compelling story of a country split between wealth and poverty, urban and rural, male and female, black and white. The 2022/23 Stats SA report is a call to action, highlighting the need for economic redress, education investment, and better policy implementation if South Africa is to achieve a more equitable future.