We can’t ignore the looming social grant crisis

In the beginning of November, South African Social Security Agency (SASSA) and the Department of Social Development were in the news again for all the wrong reasons.

Treasury director-general Dondo Mogajane‚ addressed a joint sitting of the social development portfolio committee and the standing committee on public accounts (Scopa). During the address he said that the technical teams from the Post Office and SASSA had not yet met. These crucial entities are central to finding a solution to the ongoing social grants debacle that has inconvenienced millions of South Africans over the past year. To make matters worse, Minister of Social Development Bathabile Dlamini denied that they had not met.

The Constitutional Court ordered SASSA to provide a progress plan on phasing out the contract of social grants distributor Cash Paymaster Services (CPS). This is in the hopes that they will be able to avert a crisis that could place the livelihoods of 17-million vulnerable South Africans at risk.  There is a huge possibility that this social grant crisis will not be resolved by March 2018.

Before President Jacob Zuma released the free education report, there were reports of plans to fund free education by tapping into the social grants, which would’ve exacerbated an already critical situation. Asked why he has still not fired the Social Development Minister during Parliament earlier this month, he responded:

Historical context of South African poverty and wealth distribution

According to research by SPII Studies in Poverty and Inequality Institute, before social grants, South Africa had a history where the richest 10% of the population had more than a thousand times than the poorest 10%. After transfers, their income was 66 times that of the poorest 10%. Social grants helped significantly reduce the gap between the rich and poor in SA. They not only reduced inequality but also helped reduce the ratio of wealth distribution (Gini coefficient) of all South Africans.


Poverty in South Africa

30.3 million people now live under the poverty line in South Africa. According to the 2015 STATSSA Poverty Trends of South Africa, an examination of absolute poverty from 2006 and 2015, this is the grim picture of poverty in SA. 64.2% of Black African people are poor, followed by 41.3% of Coloured people, 5.2% of Indian/Asian people are poor and the least poor population is White people who make up 1% South Africans living in poverty.

The percentage of South Africans living below the poverty line dropped from 66.6% in 2006 to 53.2% in 2011, but began to rise again in 2015, to 55.5%.


Poverty vs Social Grants graph

Here is a graph depicting the percentage of people living below the poverty line and the percentage of those receiving social grants. In 2014/2015, 16 642 643 social grants were distributed, and 11 703 165 of these were Child Support Grants worth less than the value of the food poverty line (not enough money to buy enough food to sustain a person).

Urban Settlements Development Grant (USDG)

In the graph above, you can see the consistently alarming USDG spending patterns of the metros. The red sections of the graph represent the proportion of the allocated USDG funds which remain unspent. As you can see, the metro municipalities are simply not spending the money they have to upgrade informal settlements. Below are the number of households that have been upgraded in informal settlements versus the number of targets not achieved.

The combination of growing poverty stats, lack of affordable social and rental accommodation and continued government inefficiency are all indicators that South Africa is plunging into the depths of a social crisis that will affect almost two thirds of the population.

Caxton Central

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