SA poverty rate drops as government expands welfare programmes

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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