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South Africa’s poverty threshold increases while social grants fail to keep pace

Illustrative image | Source: Bloomberg via Getty Images / Waldo Swiegers

Statistics South Africa said the rebasing of the poverty lines was not intended to determine the size of social grants or the setting of the national minimum wage, but was a metric to guide policy development and poverty programmes.

Stats SA published new national poverty lines this week, upping the minimum monthly income an adult needs to survive to R624, while increasing the lower- and upper-bound poverty lines, changes likely to give fresh impetus to calls for the government to step up the size of welfare support to the poor and growing body of unemployed.

In response to the Covid-19 pandemic and the economic shock that followed, South Africa unleashed a R500-billion economic stimulus programme that included expanding existing social grants and adding a new R350 unemployment grant.

The latter was terminated in April but reinstated in July after the deadly riots and looting triggered by the arrest of former president Jacob Zuma, and underpinned by growing anger and desperation as joblessness and poverty worsened. 

The extension of the R350 Social Relief of Distress (SRD) grant was welcomed by civil society groups pushing for a universal basic income grant and across-the-board increases of welfare incomes, which rose by below inflation in the February budget. The higher poverty thresholds will likely increase those calls. 

The food poverty line increased to R624 from R585. The lower-bound poverty line rose to R890 from R840, while the upper-bound poverty line moved up to R1,335 from R1,268 last year.  

Almost half of South Africa’s adult population of 35 million live below the breadline.

Stats SA on Thursday said the rebasing of the poverty lines was not intended to determine the size of social grants or the setting of the national minimum wage, but was a metric to guide policy development and poverty programmes.

In the early months of the pandemic, the number of South African households that ran out of money for food hit 47% of the total surveyed in a Nids-Cram survey. In the most recent iteration of the research – Wave 5, published in June – that figure dropped to 35%, although the researchers warned that this was still a high level.

“The continuing reality regarding food insecurity for many households in South Africa is perhaps not quite as dire in comparison to the period during the hard lockdown, but it remains a bleak picture,” the Nids-Cram authors said.

South Africa has close to 19 million beneficiaries of social grants, of a population of nearly 60 million. At its peak, the R350 unemployment grant was received by more than six million people.

Nids-Cram researchers found that the SRD grant and the R460 Child Support Grant (CSG), even though both were below the poverty line, had helped to ease hunger.

“The CSG and SRD have been valuable, as have been the grant top-ups. Although the smaller grants, even with top-ups, were inadequate to keep households above the food poverty line, they do ameliorate poverty.” DM/BM

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