Poverty Remains the priority for SA

Wednesday, 13 May, 2009 - 11:29

While the expansion of social grants has brought much-needed relief for many trapped in poverty, lasting progress in the battle against poverty and its manifestations, requires accelerated economic growth and fundamental reform of the South African education system. Clear and well-crafted strategies that pay attention to poverty reduction and the education system in particular would be advised if leaders are to make promises a reality.

As the 2009 South African elections came to a close in April, it should not be forgotten that poverty alleviation remains one of the most important concerns for the country. South Africa has seen waves of social unrest from its poorest and most marginalised citizens over the past 18 months, some of these demonstrations resulting in violence.

In the current climate it is perhaps a good time to present a broad analysis of South Africa’s poverty situation. A recent study by the University of Stellenbosch’s Department of Economics analysed the data of two surveys recently conducted by Statistics South Africa – the Income and Expenditure Survey of Households (IES) 2005/06 and the General Household Survey 2006.

The report shows that there are several distinct aspects to poverty in South Africa.

The analysis indicates that 47.1% of South Africa’s population consumed less than the "lower-bound" poverty line proposed by Statistics South Africa in 2007 – which means 47.1% of the population did not have R322 (in 2000 prices) for essential food and non-food items.

The poverty rates of South Africa's nine provinces differ significantly, as do those of the urban and rural areas of the country. In 2005/06 the poverty rates ranged from 24.9% in Gauteng and 28.8% in the Western Cape to 57.6% in the Eastern Cape and 64.6% in Limpopo.

The three provinces with the highest poverty rates (KwaZulu-Natal, the Eastern Cape and Limpopo) are also relatively populous – at the time of IES2005, they housed 47.4% of the South African population. It should come as no surprise then that fully 60.1% of poor individuals lived in these three provinces.

The incidence of poverty, however, was much higher in the rural areas of South Africa – 59.3% of poor individuals were rural dwellers despite the fact that the rural areas housed well below one-half of the South African population.

It is well known that South Africa’s apartheid past imparted a strong and stubborn racial character to the country’s poverty level and distributions of income and wealth. In 2005/06 - more than a decade after democratisation - the incidence of poverty among black and coloured individuals remained dramatically higher than that among whites.

There was also a major difference in the poverty rate according to gender: 45% of all female-headed households lived below the "lower-bound" poverty line, compared to only 25% of male-headed households.

The incidence of poverty generally increased with the age of the head of the household. The only exception is the group of households headed by 15-to-24 year olds - an indication of the extent of youth unemployment in South Africa. The relatively high poverty rates among households headed by individuals aged 65 and older reflected the clustering of the destitute around the recipients of state old-age grants.

Living conditions and access to services are areas in which considerable disparities also exist - the lack of access to services experienced by the poor often contributes to the difficulty entailed in moving out of a state of poverty. A large proportion of the poorest households continue to live in informal and traditional dwellings. While two-thirds of South Africa’s poorest have electricity, less than half of all poor households have piped water.

As many poor households live in rural areas, these areas are often remote, making it expensive and time-consuming for poor people to reach various important facilities. This exacerbates other time burdens on poor households alluded to earlier, such as those related to collecting water. About half of the poorest lived more than 30 minutes from the nearest clinic and post office.

As for education, the relationship is as one would expect: persons with low levels of educational attainment were much more likely to be poor than well-educated ones. Poverty affected 66.3% of those who had no schooling and 59.9% of those who had not completed primary schooling. By contrast, poverty was rare among those who had obtained a post-matric certificate or diploma/degree: in these groups the poverty rates were 4.6% and 1.2%, respectively.

South Africa has an exceptionally well-developed system of social assistance grants and social assistance expanded dramatically in recent years: government spending on such grants increased from 1.9% of GDP in 2000/01 to an estimated 3.3% in 2007/08, while the number of beneficiaries increased from 3 million to an estimated 12.4 million.

A comparison of the actual incidence of poverty in 2005 with the incidence that would have obtained if all survey respondents had reported zero income from grants, shows that grant income reduced poverty among individuals by 15%. Clearly, social grants markedly reduce poverty by augmenting the income of poor households.

While the expansion of social grants has brought much-needed relief for many trapped in poverty, lasting progress in the battle against poverty and its manifestations, however, requires accelerated economic growth and fundamental reform of the South African education system – the negative correlation between educational attainment and poverty reflects the positive influence that education has on employment opportunities and wages.

A recent editorial in one of South Africa’s dailies pointed out that a deeper look at the various political party manifestos revealed similarities among those contesting the elections. “Just how they plan to make these necessary reforms if given a chance, is the detail that appears to be lacking,” it said. Clear and well-crafted strategies that pay careful attention to poverty reduction and the education system in particular would be advised if leaders are to make promises a reality.

Paula Armstrong, Bongisa Lekezwa and Krige Siebrits are based at the University of Stellenbosch Department of Economics and authors of the working paper Poverty in South Africa: A profile based on recent household surveys.

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