South Africa’s social welfare system cracks under poverty burden

By Ronda Naidu

South Africa’s social welfare system cracks under poverty burden

South Africa is the most unequal country in the world, according to the World Bank’s report, Inequality in Southern Africa: An Assessment of the Southern African Customs Union. Released in March 2022, the report placed the country in pole position among 164 countries in the World Bank’s global poverty database.

The data is not surprising as, despite having one of the most progressive constitutions and labor policies in place, little progress has been made in recent years to alleviate the depressingly high levels of unemployment and poverty that plague the country.

Unemployment, poverty at highest levels

South Africa’s Quarterly Labour Force Survey sets the unemployment rate at 35.3%, with the number of jobless standing at 14.5 million in the fourth quarter of 2021 compared to the third quarter of 2021. This is the highest level since the start of the Quarterly Labour Force Survey in 2008. The youth unemployment rate stands at a staggering 65.5%.

Poverty levels follow suit, with 13.8 million (25.2%) of South Africans living below the extreme poverty line (about US$34 per month) and 30.4 million people (55.5%) below the upper-boundary poverty line (about US$84 per month). From a racial perspective, about 29.9 million or 64.2% of black South Africans live below the UBPL, according to the National Poverty Lines statistical analysis.

Moreover, in 2020, over six out of 10 South African children (0-17 years old), or more than 62%, were multidimensionally poor in 2020 according to a report by Statistics South Africa. Black South African children were the worst hit, with 68.3% facing multidimensional poverty.

Largest social system seems to fail

These alarming statistics belie the fact that South Africa has one of the largest social welfare systems in the developing world. It includes grants for disability, child support, old age, and, more recently, the COVID-19-related social relief distress grant (SRDG).

Catering for an estimated 12.78 million children, the monthly child support grant (CSG) is an unconditional cash grant paid to the caregivers of eligible children and it sits at US$29 (R460) for the 2022-2023 financial year. Despite the low amount provided, the CSG “has become the single biggest programme for alleviating child poverty in South Africa”, University of Cape Town researcher Katharine Hall noted.

The Pietemaritzburg Economic Justice and Dignity group said that the CSG is pegged far below the actual cost required to feed a child properly.

“This suggests that the key instrument to directly support our children and to reduce poverty and inequality in South Africa is being slowly marginalised and perhaps abandoned by South Africa’s leaders,” it said in a statement.

Amidst this dire state of affairs, calls from civil society organizations have recently resulted in the payment of a COVID-19 social relief distress grant of US$22 per month to 10.5 million people being extended to March 2023. A July 2021 report by the Department of Social Development, under whose budget the grant falls, found that the SRDG grant was mostly used to purchase food.

The report also found that more men (4,379,331 equating to 67.9%) were approved for the grant compared to women (2,070,585 equating to 32.1%).

To reduce the very high levels of poverty in female-headed households, the report recommends that receipt of CSG benefits must be disregarded when determining eligibility for the grant or a similar grant such as the currently debated Basic Income Grant (BIG).

The calls for BIG have grown louder over the years as democratic South Africa was seen to be further losing its long-running battle against the triple challenges of poverty, inequality, and unemployment.