SA poverty rate drops as government expands welfare programmes

Living in poverty: about 23-million people in South Africa receive a monthly income of R620 or less. (Delwyn Verasamy, M&G)

Living in poverty: about 23-million people in South Africa receive a monthly income of R620 or less. (Delwyn Verasamy, M&G)

South Africa's poverty rate fell 11 percentage points in the two years through 2011 as the government expanded welfare payments, the statistics agency said.

About 23-million people, or 45.5% of the population, live in poverty, defined as those receiving a monthly income of R620 or less, Pretoria-based Statistics South Africa said in a report on its website. That's down from 27.8-million, or 56.8%, in 2009.

The ruling African National Congress has expanded social welfare grants since coming to power two decades ago, paying monthly stipends to children, pensioners and the disabled. With about 16-million beneficiaries, more people earn grants than have jobs in Africa's biggest economy.

"Although initially seen as a short-term measure to address poverty, social grants have increasingly become a source of livelihood in South Africa and have played an instrumental role in reducing poverty levels," said the Pretoria-based Statistics South Africa.

While poverty has declined, the gap between rich and poor hasn't improved, the data shows. The Gini coefficient, a measure of inequality with zero indicating total equality, was 0.69 in 2011 compared with 0.7 in 2009 and 0.72 in 2006, the statistics agency said.

The wealthiest 20% of the population accounted for more than 61% of consumption in the economy in 2011, compared with 4.5% for the poorest quintile, it said.

The number of South Africans living in extreme poverty, defined as those earning a monthly income of R321, fell to 20.2% in 2011, or 10.2-million people, compared with 32.4%, or 15.8-million in 2009. – Bloomberg


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