Commentary: How South African Households Spend Their Money

Household spending patterns offer a window into people’s priorities, and in South Africa, Stats SA’s latest survey reveals some notable trends.

According to the 2022/23 Income and Expenditure Survey, housing, water, electricity, gas, and other fuels make up the largest portion of household consumption expenditure, accounting for 34.7% of total spending. This equates to an average of R49,816 per household annually and a total spend of R1.06 trillion. Whether owning or renting, the cost of keeping a roof over one’s head remains the biggest financial burden for South African households. Aspiring entrepreneurs can capitalise on this trend by entering the real estate or utilities industries to serve households within different demographics. Proptech solutions can help reduce costs, while climate tech solutions can help households adopt more sustainable alternatives.

In second place is the food and non-alcoholic beverages category, contributing 16.3% to total household consumption. Collectively, households spent around R499 billion on food during the survey year. On an individual level, the average household spent R23,445 on food, highlighting the rising cost of essentials and the importance of food security initiatives. Founders can introduce retailtech solutions that help retailers improve efficiency, reduce costs, and deliver innovative solutions to their customers. Furthermore, there are plenty of opportunities for agritech startups to capitalise on.

Transport ranks as the third-largest expenditure, making up 15.3% of overall household spending. Households spent an estimated R467 billion, with an average of R21,930 per household going toward transport costs. This includes public transport, private vehicles, fuel, and maintenance, significant costs for commuting workers and families navigating urban sprawl. South Africa’s public transport sector requires a lot of improvement, so entrepreneurs can use their creativity to introduce solutions to the underserved market segments across the country.

Together, these top three categories—housing, food, and transport—make up over 66% of household consumption in South Africa, underscoring the everyday pressures households face. These numbers can serve as a valuable reference point for businesses, policymakers, and nonprofits looking to understand consumer behaviour, shape relevant products and services, or design support programs for financially strained communities.

Understanding where households allocate their budgets is also crucial for entrepreneurs targeting consumer markets. Products or services that help reduce costs in these top categories, or add value without adding financial pressure, will likely find strong demand.

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