How needed is South Africa’s increased spending on social grants?
10 February 2012-According to the IPC-IG Country Study on the “Impact of growth and redistribution on poverty and inequality in South Africa”, social grants have helped tackle the worst effects of poverty in the country, but much more needs to be done in other priority areas, the report notes, if South Africa is to achieve an inclusive growth trajectory. The conclusions of the IPC-IG study leads us to the following question: How needed is South Africa’s increased spending on social grants?
Evolution of social protection expenditure in South Africa
After gaining power in 1994, the African National Congress (ANC), South Africa’s ruling party, carried out significant changes to the constitution in the area of social policy. Changes are clearly indicated in Article 27 : “All South Africans have the right to social security, including if they are unable to support themselves and their dependents, appropriate social assistance”. Following the new directives of the post-Apartheid constitution, an expansion of social policies was immediately implemented to foster the social inclusion of all South Africans, especially the black majority.
Since 1994, social grants expenditure has risen steadily . According to South Africa’s National Budget Review from 1998, expenditure on social welfare rose from ZAR 14 billion in 1995/96 to ZAR 19 billion in 1998/99. Recent years have also seen an increase in social grants spending. In February 2011, South Africa’s finance minister, Pravin Gordhan, noted that the National Budget will continue to expand on social grants, amounting to ZAR 147 billion in 2011/12.
The impact of social grants
In 1998, approximately 3 million South Africans received social grants in comparison to almost 15 million South Africans at present. The increase in the number of beneficiaries receiving social grants indicates that South Africa has made considerable progress in targeting a large number of socially vulnerable persons, arguably drawing comparisons to Brazil’s Bolsa Familia cash transfers, which now reaches over 12 million families in the country facing hunger and poverty. Social grant payments in South Africa are mainly given to pensioners and children in poor households. Explaining why South Africa has chosen to prioritize pensioners and children can be related to the following reasons:
The elderly in South Africa make up a large component of an ever increasing demographic cohort. The most vulnerable reside in rural areas. According to the South African Medical Research Council, the 2001 population census estimated that 7.3 percent of the population was 60 years old or older. This estimate may be perceived as outdated and low in comparison to certain countries in the North, but South Africa has the second highest number of older persons in Africa, only surpassed by Nigeria, and the number is expected to rise despite the consequences of HIV/AIDS-related mortality. Further, elderly black South Africans make up 90 percent of chronically poor old people in the country. Elderly black South Africans also take on the responsibility of sole provider for their grandchildren often orphaned by HIV/AIDS or abandoned by their parents in search of jobs in the metropolitan areas.
Children make up the second biggest beneficiaries of the social grants in South Africa. According to another IPC-IG Country Study on Expanding the Social Security net in South Africa: Opportunities, Challenges and Constraints, the government has increased the age limit for eligibility to children up to 14 years in 2005. The report further notes that the impact of the social grants on child poverty has been greater, with a fell from 42 percent to 34.3 (2003). The rate of children living in extreme poverty fell from 13.1 percent to 4.2 percent (2003).
An explanation for the age increase could be that young poor adolescents are arguably more prone to running away from home if their parents or guardians are unable to provide for them financially or are struck by illness. According to a Study Report on Children’s access to social insurance benefits, the rate of orphaning is substantially high. As of 2005, South Africa had over 500,000 maternal orphans and roughly 630,000 double orphans, where both the mother and father had passed away. Further, 19 percent of South Africa’s child population had suffered loss of one or both parents.
Other challenges for Inclusive Growth
According to the World Bank, South Africa is characterized as an upper middle income country, but a number of development challenges persist. Unemployment is still rampant. Many children have been prone to malnutrition, thus preventing them to perform adequately in school; the legacy of average low quality schooling continues thus leading to high dropout levels. In relation to health, the country faces a dramatic burden of HIV /AIDS, already accounting for 17 percent (5.5 million) of total of people leaving with HIV on Earth. Life expectancy has decreased from 54.12 years to 53.9 years for men and from 64.38 years to 57.2 years for woman.
South Africa social grants budget has significantly increased in the post-Apartheid era. Our evaluations show that resources have been channeled towards two social groups that are clearly in need of social assistance. Without the delivery of social grants, the incidence of inequality and poverty would be much higher. Because of this, the increases in social grants are welcome as South Africa fights hunger and strives to achieve inclusive growth. However, South Africa must additionally scale up effective plans to simulate employment and implement other policy tools to tackle rising inequality.
By Charlotte Lazarus*
Would you like to learn more about South Africa’s social policies and related topics? refer to the following articles and publications:
Brazil inspires South Africa through its “Zero Hunger strategy”
Brazil explains flagship programme to eradicate extreme poverty by 2014
South Africa’s “Food for All Campaign”: A promising new plan to tackle hunger and malnutrition?
Study tour on Social Cohesion: Brazil -South Africa- India Dialogue
Public Support to Food Security in India, Brazil and South Africa: Elements for a Policy Dialogue
The Food Security Policy Context in South Africa
Inclusive and Sustainable Development: For Whom?
South-South Cooperation in Times of Global Economic Crisis
Employment Policies in Brazil: History, Scope and Limitations
What can IBSA Offer to the Global Community?
South-South Cooperation – The Same Old Game or a New Paradigm?
