Absolute poverty has decreased in South Africa
ANALYSIS
On Thursday night President Jacob Zuma delivered his 2015 State of the Nation address. It was after the Mail & Guardian‘s print deadline, but in his past seven speeches Zuma has spoken about increasing jobs and alleviating poverty, so the M&G has pulled out some indicators to see whether that has actually happened.
More people than ever have access to basic services and social grants are helping millions, but the unemployment rate is still high at 24.3%, or 34.6% if you take the expanded definition that includes people who have simply stopped looking for work. Last week Statistics South Africa announced that 54% of citizens live below the poverty line.
Research shows that social grants play a crucial role in alleviating poverty in South Africa. The country spends around 4% of its GDP on social grants, according to AfricaCheck. This is sustainable as long as the economy grows at 3% a year, the national treasury found in a long-term study.
When Zuma presented his first State of the Nation address in June 2009, 14.5-million South Africans were employed. By the end of last year 15.3-million people had jobs. But the unemployment rate had increased from 23% in June 2009 to 24.3% at the end of 2014.
“There is a crisis in South Africa,” said Stuart Wilson, the director of the Socio-Economic Rights Institute. “While absolute poverty has decreased, inequality has risen steadily over the last 20 years.
“This manifests itself in all aspects of society, including access to health care, education, housing, and basic services. Despite the significant expansion of social grants, basic services provision, and other opportunities, South African cities are still conditioned by apartheid’s racialised system of oppression and disadvantage. This is not being adequately addressed,” said Wilson.
Zuma said in 2009 that “decent jobs” were at the core of his government’s economic policies – but the recession was biting. His speech was less about job creation and more about preventing job losses. “Social grants remain the most effective form of poverty alleviation,” he stated.
In his February 2010 speech, Zuma reported that the recession had “cost the economy 900 000 jobs” the previous year. He declared 2010 the “year of action”. The government had implemented “decisive anti-recession spending”, he said, especially on infrastructure. Social grants were extended to children aged 15 to 18.
By 2011 the indicators suggested that the economy was turning a corner, so at last jobs could be created rather than shed. And the country had been buoyed by successfully hosting the 2010 World Cup.
The year 2011 was “the year of job creation”. A jobs fund, with R9-billion in the kitty, was established to finance new job creation initiatives, and the Industrial Development Corporation set aside R10-billion to invest in activities with high employment potential.
On social grants, Zuma said the country was “building a developmental and not a welfare state” and that social grants would be “linked to economic activity and community development to enable short-term beneficiaries to become self-supporting in the long run.”
In the ANC’s centenary year, 2012, Zuma focused on the “triple challenge” – unemployment, poverty and inequality. The government was looking 20 years ahead with its National Development Plan, which aimed to create 11-million jobs by 2030. Economic growth of at least 5% would be needed to create them, Zuma said in 2013.
His speech last year was used to tell a good story about how the lives of millions of people had changed for the better since 1994.
Zuma wasn’t wrong. But the plan to eradicate poverty, increase employment and reduce inequality by 2030, hinging on the economy growing at 5% a year, was a tad idealistic.
Four months later, his number-one spot secure, his good-news story changed. The economy needed to be jump-started to reach a growth of 5% by 2019, he said. But with Eskom’s inability to produce enough electricity and GDP growth falling, a shot of adrenaline to the heart may be more appropriate.
