Pretoria - Is the R155.3 billion that South Africa is spending this year on social grants for 16.4 million people money well spent?
While the social grant system is under fire, particularly after the increases the minister of finance announced in his Budget speech, social development authorities say it is working – within the limits of its capabilities.
“Yes, we are meeting the challenge of poverty through social grants but – and that ‘but’ is one of the most important points – social grants are not the solution to South Africa’s problem of deep and extensive poverty and high long-term unemployment.”
This was the conclusion of Dr Wiseman Magasela, deputy director-general of research and policy development at the Department of Social Development.
He was speaking during a panel discussion on poverty and inequality at Unisa as part of the university’s annual Research & Innovation Week. The university will conclude its special focus programme on innovation and research by month-end.
Acknowledging that social grants were coming under “heavy criticism”, Magasela said the ideal solution to poverty and unemployment was market-based employment.
“Unfortunately, unemployment and underemployment has become too big for market-based solutions to solve in the next 10 to 20 years,” he said, quoting from the National Development Plan.
For millions of South Africans – mostly children and the elderly – social grants were a lifeline.
Among the poorest 10 percent of households, 80 percent have no workers and 70 percent have at least one child. “Without social grants, there’ll be nothing.”
Magasela said children and the elderly were the main beneficiaries of social grants.
The number of child support grants had risen from nearly 22 000 in 1998/99 to 11.6 million in 2014/15.
Over the same period, recipients of old-age grants had grown from 1.63 million to 3 million.
Those receiving disability grants had increased from just more than 633 700 to 1.12 million.
The remaining grants were for war veterans (353 in 2014/15), foster care (approximately 455 600) and care dependency (136 730).
Expenditure had risen and was estimated at R120 billion for the year ending March 31, compared with R113bn last year, Magasela said.
Social grants’ share of GDP has been in the region of 3.5 and 3.6 percent since 2005 (except in 2010/11 when it reached 3.71 percent).
Social grants were “not invented” by the post-apartheid government, they had been introduced in the 1930s to address the poor white problem, Magasela said.
The best way to judge the effectiveness of the system today was on the basis of evidence.
“The government’s 15-year review found that the social security system has proven to be its most effective initiative in reducing poverty,” he said, also drawing on the evidence of researchers and organisations outside government.
Magasela cited a 2014 World Bank study showing that of 12 middle-income countries studied, South Africa had achieved the largest reduction in poverty and inequality, with 3.6 million people being lifted out of poverty.
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