MEDIA RELEASE 

2026-07-24 

SUMMARY: The Labour Party of South Africa (Labour Party) warns that rising inflation and transport costs are placing further pressure on working-class South Africans, exposing the urgent need for a different economic approach. The Party calls for a fundamental economic reset that prioritises job creation, affordable public transport, productive industries, and policies that empower citizens beyond dependency.

South Africa’s economic trajectory has been further challenged by developments witnessed over the past week. On Thursday, 23 July 2026, Statistics South Africa reported that the country’s annual inflation rate increased for the fourth consecutive month, reaching 5% in June 2026, up from 4,5% in May 2026. This represents the highest inflation level recorded since June 2024. 

“What happened”, asked interim President of the Labour Party, Joseph Mathunjwa. “We know that this government will attempt to defend itself by attributing these challenges solely to geopolitical turbulence. However, the reality is that these events are exposing the continued failures of government to develop effective economic interventions”, stated Mathunjwa. 

According to Stats SA, transport was the largest contributor to the increase in the Consumer Price Index (CPI), largely driven by higher fuel prices. These increases filtered through to passenger transport costs, including minibus taxi fares, e-hailing services, long-distance bus fares, and school transport fees. 

“It is clear as day that these changes disproportionately affect the working class”, said Mathunjwa. “The current narrative places all responsibility on geopolitical factors that are influencing fuel prices, but the real questions South Africans must ask are: Where is the government’s contingency plan? Why have we not seen decisive interventions to protect households, including measures to address rising food prices and the increasing cost of living”, he asked. 

Transport costs would not be affecting the working-class this much if South Africa had a well-functioning passenger rail system. This would have significantly reduced the fuel dependency by reducing the pressure on petrol and diesel demand and limit the exposure to international oil price shocks. 

“If ANC was not in a hurry to sell, close and privatise state-owned entities, the railway industries would have grown to being a sustainable sector for employment and economic activities. While also ensuring that the relevant refineries remain maintained and operational”, noted Mathunjwa. 

Months ago, economic commentators praised the resilience of the South African rand during periods of global economic uncertainty. However, the Labour Party has consistently challenged the narrow measurement of economic success. 

“The question we have repeatedly asked is: What does a resilient rand mean when South Africa continues to record one of the highest unemployment rates in the world, remains one of the most unequal societies globally, and millions of South Africans continue to live on or below the poverty line”, questioned Mathunjwa. 

“South Africans were previously encouraged to view declining inflation and interest rates as signs of economic improvement. Yet now, when inflation rises, the explanation is shifted entirely towards geopolitical factors. Which narrative should South Africans believe? The reality is that economic management requires more than explanations -it requires practical solutions”, he added. 

The marginal economic growth recorded in recent months was already criticised by economists as insufficient to stimulate meaningful job creation, improve household incomes, or restore consumer confidence. The reality remains that many South Africans are experiencing declining purchasing power as the cost of essential goods and services continues to rise. 

The recent increase in inflation, coupled with rising passenger transport costs, further demonstrates the economic pressure faced by working-class households. For many South Africans, transport is not optional -it is a daily necessity required to access employment, education, and economic opportunities. 

The Labour Party firmly believes that government can and must do more to sustainably empower South Africans. This requires a fundamental economic reform programme informed by a political reset, including the establishment of a federal system of governance that strengthens local economic development and accountability. 

Under the Labour Party’s proposed federal system, a publicly owned Federal Reserve Bank would be established to increase transparency, accountability, and ensure that monetary and economic institutions serve the interests of South Africans. 

A Federal Reserve Bank would support stronger local economies by ensuring that financial resources are directed towards productive economic activity, local development, job creation, and economic empowerment. 

“The very essence of the South African Reserve Bank has been centred on protecting the value and credibility of the rand in the eyes of global markets and foreign investors”, argued Mathunjwa. “However, protecting the currency cannot become the sole measure of economic success while millions remain unemployed and economically excluded. Monetary policy must also contribute towards building an economy that prioritises job creation, industrial development, and economic emancipation”, he added. 

The Labour Party further maintains that South Africa’s social wage must be progressive, one that empowers citizens and expands opportunities, rather than creating long-term dependency without pathways to economic participation. 

The current increase in passenger transport costs highlights the limitations of a social support system that does not adequately address the structural challenges facing working-class communities. Without affordable and properly subsidised public transport, increases in transport costs simply reduce household income and deepen financial hardship. 

“For years, I have argued that providing social grants without a comprehensive plan to create sustainable employment is not empowerment”, said Mathunjwa. “A nation cannot be liberated from poverty through dependency alone. True empowerment requires decent work, economic participation, skills development, and opportunities for people to build independent livelihoods”, he added. 

The Labour Party maintains that South Africa requires a new economic direction, one that places workers, communities, and economic justice at the centre of policymaking. 

“We still maintain that this government has big stakes in the recent privatisation of key national assets, and the gradual destruction of once world-renowned SOEs [state-owned enterprises]. This is a clear case of the chickens coming home to roost. We can’t keep on doing the same thing over and over again, expecting a different outcome. We require a complete reset of this country – in all aspects – as we have been saying for the past donkey years, but it went on deaf ears. The reason is simple: It is not about South Africans – it is about the silver-tongued politicians and their handlers”, he concluded. 

++++ENDS++++

965 words (excluding heading, summary and end matter)

For more information or to arrange interviews, please send a request to media@labourparty.org.za.

The Labour Party is a non-racial home for all progressive and likeminded organisations, including trade unions and civil society organisations that share our values and ethos.