South Africans were advised to be frugal by leading economists due to rapidly rising prices of food and fuel , lofty interest rates and the inflation which rose above nine percent in February, the highest in the last five years , which added to speculation the central bank may resume raising interest rates. The Reserve Bank’s four interest rate increases last year failed to bring inflation back within the 3 percent to 6 percent target range. The rand’s 15 percent slump against the dollar this year and a proposed 60 percent increase in electricity costs threatens to keep inflation above the target.

The Reserve Bank’s credibility is at stake. The inflation numbers may be too dramatic for them to do nothing. This is further confirmed by Governor Mboweni’s prediction that the drop in value of the Rand will hold inflation above the usual for a longer time than expected. Since the central bank predicted that the interest rate would start dropping down within acceptable range after the first quarter of 2008 and we seem to be going in the opposite direction that is not helping the Reserve’s reputation or credibility. The main reason for the current food inflation is a high global demand for wheat products, which puts an upward bias on local food prices. Other factors include grains, biofuel production and the demand for protein feed. The increase in gasoline prices is largely due to increased demand from countries such as China and India and this is likely to continue. So what can the individual man or woman in South Africa do in order to survive these turbulent financial times? Well that is a broad question and there is no one quick fix. There are many smaller solutions. One would be foolish to expect the answer to fall from the sky or from the oil corporations or from the government. It is up to individual problem solving and grassroots movements of new technologies.