Poverty in South Africa – a statistical analysis

Poverty is one of the major challenges facing democratic South Africa. This article focuses on poverty in South Africa, using the Income and Expenditure Survey conducted in 1995 by Statistics South Africa (formerly the Central Statistical Service). In the first part, different approaches that can be followed in the measurement of poverty are discussed. In the second part, Sen's approach to the measurement of poverty and the Chi-square Automatic Interaction Detection (CHAID) technique have been used to analyse the above data. CHAID is used to explore the relationship between the poverty status of the household (ie poor or non-poor) and other household characteristics. These variables can then be used as predictors of poverty status.     

The determinants of rural and urban household poverty in the North West province of South Africa

Based on standard poverty measures, the extent of poverty in the North West province is on average worse than in South Africa. For instance, the poverty gap ratio for North West is twice that of the South African average, and the FGT index is three times as high. This article therefore aims to identify the determinants of rural and urban poverty in the North West province of South Africa. Using data gathered from a survey of 593 black households across the province, probit model estimates suggest that the major significant determinants of household poverty in both rural and urban areas are education and household size. A difference between rural and urban poverty is, first, that extra female adults in a rural household raise the probability of poverty. Secondly, having a migrant (out) worker as head of the household in rural areas lowers the probability of poverty, while this does not apply to urban households. A sensitivity analysis for the robustness of the results over a range of poverty lines reveals that the impact of education is much stronger for poorer households than for more wealthy households.     

Node selection for the Integrated Sustainable Rural Development Programme in South Africa

Various programmes and strategies in South Africa aim to reduce poverty. The Integrated Sustainable Rural Development Programme (ISRDP) is a sustained campaign against rural poverty and underdevelopment, implemented in 13 nodes selected on account of their poverty, lack of infrastructure and capacity, and provincial representivity. Using a hierarchy of development regions, data from the 2001 Census and a core-periphery model, this paper evaluates the location of the 13 nodes to determine whether the municipalities in these nodes have high levels of poverty and are in need of development. The findings are that although most of these municipalities have high poverty levels, the nodes also include municipalities with relatively high levels of development. There are also 17 municipalities in South Africa with very low levels of development that are not included as nodes in the ISRDP. Policy-makers need to take cognisance of the macro pattern of spatial economic development.     

Poverty,livelihood and class in rural South Africa

Using data from a national living standards survey undertaken in late 1993, this paper disaggregates and explores the economics of livelihood generation and class in rural South Africa in an effort to contribute to the ongoing and vociferous debate in South Africa about poverty and its alleviation. Pursuant to the suggestion of participants in a recent participatory poverty assessment, this paper analyzes what might be termed the class structure of poverty. After exploring the range of claiming systems and livelihood tactics available in rural South Africa, the paper offers a first look at who the poor are by disaggregating the rural population into discrete livelihood strategy classes. Non-parametric regression methods are used to then estimate and graphically explore the nature of the livelihood mapping between endowments and real incomes. In addition to identifying those endowment combinations that map to consumption levels below the poverty line (the asset basis of poverty), the topography of the estimated livelihood mapping helps identify the constraints that limit household's ability to effectively utilize their assets and endowments. These results suggest that poverty is a matter of not only having few assets, but also of constraints which limit the effectiveness with which those assets are used, and poverty and livelihood policy needs to be designed accordingly.     

Food poverty,hunger and household production in rural Eastern Cape households

More than two decades since the advent of democracy in South Africa, the place of small-scale agriculture in rural development, poverty alleviation and food security remains ambiguous and highly contested. However, there is now some new evidence that official income poverty estimates in South Africa may be underestimating the contribution of rural, land-based livelihoods when measuring household well-being. This paper aims to explore this possibility further by identifying how household production activities are associated with improved food security among rural Eastern Cape households in the former homelands. The analysis is based on data from Statistics South Africa’s 2008/9 Living Conditions Survey and its annual General Household Surveys. In adopting a food poverty lens, the findings suggest that hunger levels are lower among farming households in the Eastern Cape even though a higher percentage of these households (relative to non-farming households) live below the national food poverty line. The paper concludes by discussing some implications for policy.     

Poverty,human rights law and socio-economic realities in South Africa†

South Africa is a nation of immense variety. It has rich cultural diversity, an enviable climate and an abundance of natural resources. However, it is also a nation with vast economic disparities and a highly unequal distribution of income. Hence, in spite of abundant resources and a seemingly vibrant economy, South Africa still faces an enormous poverty problem that is fundamentally no different from that of other African countries. As in many other African countries this problem of poverty is compounded by the HIV/AIDS pandemic; by high levels of unemployment; by low levels of education; and by a number of other factors. Today, South Africa has one of the best constitutions in the world and a Bill of Rights that contains an array of justiciable socio-economic rights. The South African government has also attempted to alleviate poverty and mitigate its effects through progressively developing and expanding a social welfare system and other programmes such as the Reconstruction and Development Programme (RDP) and the Growth, Employment and Redistribution (GEAR) strategy. The purpose of this article is to analyse the role of human rights (specifically the Bill of Rights in the Constitution) and government efforts to alleviate poverty (through certain programmes and service delivery) in the face of adverse socio-economic realities in South Africa.     

The impact of tourism on poverty in South Africa

This paper evaluates the potential impact of tourism on poverty in South Africa on the basis of recent survey data on international tourism spending patterns. It looks at three scenarios, using an applied general equilibrium model. The main finding is that the poor benefit very little in the short term from additional tourism income. A further finding is that domestic and international tourist expenditure affect the economy differently; both markets are therefore important. In essence, the research confirms that tourism receipts can be used as a tool to alleviate poverty, but in South Africa this must be supported by policies that focus on the labour market and human resource development.     

Can trade liberalisation in South Africa reduce poverty and inequality while boosting economic growth? Macro–micro reflections

South Africa is trapped in a cycle of modest growth, unacceptable poverty levels and record unemployment. This has led to renewed interest on the relationship between macro (growth) and micro (poverty and distribution) issues. This paper uses a macro–micro tool that couples a computable general equilibrium model with microsimulation models to examine the impact of further unilateral trade policy reforms on growth, poverty and welfare. Trade liberalisation alone has very minimal short-run macroeconomic consequences while its long-term impacts are positive and magnified by technical factor productivity (TFP) effects. Trade liberalisation has no appreciable impact on poverty in the short run even if we allow for trade-induced TFP increases. In the long run, however, poverty reduces even in the case when we do not allow for TFP increases. Trade liberalisation policy has been found to be progressive despite the low level of tariff protection remaining in South Africa.     

Combating poverty in South Africa

The successful and peaceful political transition in South Africa is regarded as a great accomplishment for its people. Unfortunately, democracy was not accompanied by economic growth and policies that could lead to a meaningful quality of life and an acceptable standard of living for all the country's citizens. There is a need for South Africa to reconcile the expectations resulting from the achievement of democracy with the realities of both the problems and the potential of the economy. As South Africa attempts to alleviate poverty through development, it is essential to balance the ever-increasing and often competing demands against limited natural resources. This article formulates some policies and programmes designed to combat poverty at its source.     

BUILDING AND LINKING A MICROSIMULATION MODEL TO A CGE MODEL FOR SOUTH AFRICA

This paper examines the microeconomic effects of macroeconomic policies or shocks in South Africa. In particular, the paper considers the effects of macroeconomic policies on poverty and inequality by building and linking a microsimulation (MS) model to a Computable General Equilibrium (CGE) model. In the South African context, where poverty and inequality are at high levels, this novel approach enables us to identify the winners and losers of any policy change, so that the impact on poverty and inequality can be assessed in detail.     

Non-monetary dimensions of well-being in South Africa, 1993–2004: A post-apartheid dividend?

Existing studies on shifts in income welfare in South Africa since the demise of apartheid suggest that income inequality increased, while headcount poverty rates declined since 2000, after some evidence of an increase or no change in poverty in the 1995–2000 and 1996–2001 periods. This study provides an analysis of the shifts in non-income welfare that have occurred in South Africa between 1993 and 2004. We use factor analysis to construct an asset index as a measure of non-income-based welfare. Variables reflecting household access to a range of services and assets are used in the construction of the index. Significantly different results emerge when non-income welfare shifts are considered: we show statistically significant decreases in the headcount asset poverty rates between 1993 and 2004 across a range of covariates. Finally, asset inequality decreased significantly between 1993 and 2004 – in stark contrast to results based on consumption data.     

Poverty measures and definitions

In this article an attempt is made to explain what poverty means and how it is measured. Absolute income measures are discussed with reference to England, America, Australia and South Africa. These encompass the poverty line, the social security administration measure, the Henderson poverty line, the South African poverty datum line and the poverty gap. Relative income measures of poverty used in England, America and Australia are described. Absolute measures of poverty, the income‐net worth approach, a definition that includes other resources and a balance sheet method are explained. Socio‐economic measures are dealt with. These include the sociological concept of poverty, socio‐economic status measures and the culture of poverty view. Other measures described are public dependency and residential measures, mortality measures, a normative measure and subjective poverty.     

Smoke and mirrors? The science of poverty measurement and its application

Measures of poverty are much used, but also much criticised as having limited value in debates on public resource allocation. Some argue that the measures are too conservative and do little more than complicate important issues of inequality and injustice. However, poverty measurement can be sensitive to these concerns if grounded in the field's well-developed theoretical foundation. In South Africa, poverty measures over more than 50 years have consistently taken into account distributional issues and the causes and implications of deprivation, and most South African analyses of poverty have recognised and incorporated the multi-dimensional nature of poverty. Recognising different perceptions of aggregation, time horizon and the role of states and markets is perhaps more important than methodology when assessing what poverty measures can contribute. With proper theorisation, and attention paid to the purpose of poverty diagnostics, measurement is more than sleight-of-hand and can provide both a tool for advocacy and a means to implement policies that promote greater social justice.     

Determinants of labour force participation in the North West province of South Africa

Based on data extracted from the 1995 October Household Survey of Statistics South Africa, this study has found that potential income is a major factor in labour force participation by African women in the North West province of South Africa. Other significant determinants of participation for both genders are age, education, region, marital status and relationship to the head of the household. The results imply that significant discrimination against African women still exists in the North West province, which partly explains the much lower participation rate for African women (64 per cent), compared with that of African men (86,5 per cent). The study supports the North West government's development strategy of developing human resources to eradicate poverty.     

SOUTH AFRICA AND THE NEW PARTNERSHIP FOR AFRICA'S DEVELOPMENT: ECONOMIC SPIN-OFFS AND LINKAGES

The New Partnership for Africa's Development (NEPAD) is a concerted effort by Africa's political leaders to develop a comprehensive and integrated strategic policy framework to raise current levels of socio‐economic development and reduce high levels of poverty across the African continent. The NEPAD framework recognises the need for African countries to pool their resources together in order to enhance regional development and economic integration. To this end, NEPAD emphasises capacity building and also seeks to solicit and disburse funds towards infrastructural development programmes and poverty alleviation projects, among others. South Africa's involvement with the rest of Africa has increased significantly since 1994. Trade exports, foreign direct investment (both market and resource‐seeking in nature) and public‐private partnerships have mushroomed in many parts of the continent. Many South African firms are providing the financial impetus for the infrastructural development and rehabilitation of African economies. This paper discusses salient economic linkages between South Africa and the rest of Africa within the framework of NEPAD. South Africa is the economic hub of sub‐Saharan Africa (and indeed of the African continent), with significant agricultural, manufacturing and services capacity. South African firms have invested in the development of a number of sectors in the rest of Africa, taking advantage of the new investment incentives offered by the NEPAD framework. The target sectors range from mining, the hospitality industry, engineering and construction, finance to telecommunications. These investments and economic involvements are crucial to the development of African countries and the relevant sectors that are important for the realisation of some of the objectives of NEPAD.     

Development policy and water services in South Africa: an urban poverty perspective

This paper explores the impact of overall macroeconomic development policy on water service delivery policy and urban poverty in South Africa. It scrutinises ambiguous definitions of ‘urban’ in the literature, which tend to obscure the extent of urban poverty in this country. This is crucial given that a large proportion of the urban poor live in informal settlements, which are sometimes lumped with rural areas. Informal settlements are generally characterised by limited essential services such as housing, water supply, storm-water facilities and sanitation services. Water services, like other social services, retain the racial imprint of apartheid. Consequently, water policy in South Africa attempts to address water issues from an equity perspective. By analysing the effects of the tariff subpolicy within the water policy, the paper recommends that free basic water should be made available only to poor households.     

Social security for young people amidst high poverty and unemployment: Some policy options for South Africa

South African youth experience extremely high levels of unemployment and poverty. Currently there is no social assistance for low-income young adults in South Africa unless they are disabled. Interventions are needed that can achieve widespread poverty alleviation, as well as help facilitate economic participation to improve lifelong earnings. In this article, six examples of social security policy options are considered, including five grants ranging from an unconditional non-means-tested grant for young people to a conditional grant for young people in training or education, plus an ‘Opportunities voucher’ that is administered through the social security system but paid out to organisations offering youth education or work opportunities. Using a tax and benefit microsimulation model to simulate the five grants, we estimate the potential numbers reached and cost, as well as the impact of these six options on poverty.     

A comparison of poverty in South Africa's nine provinces

Poverty in South Africa varies greatly across the nine provinces. An accurate estimation of relative poverty shares is important because they serve as key indices for targeting social expenditure. In this article we test the robustness of provincial poverty rankings against changes in measurement methodology. In recent years, a large body of international literature has developed concerning the choice of an appropriate poverty line and the construction of more appropriate poverty measures. This article uses two of these recent developments ‐ the concept of a poverty critical range in place of a single poverty line and distribution‐sensitive decomposable poverty measures — to re‐examine provincial poverty. Results are checked across two recent national data sets.     

The socio-economic differences between landfill and street waste pickers in the Free State province of South Africa

Waste picking is an important survival strategy of many people throughout the developing world. South Africa has a sizeable waste picker population who ply their trade on municipal landfill sites as well as on the streets of cities and towns. This study lifts the lid on this neglected area of research by analysing and comparing landfill and street waste pickers side by side in a socio-economic context. Samples of waste pickers were drawn from the three main municipalities of Mangaung, Matjhabeng and Metsimaholo in the Free State province of South Africa and a questionnaire-based survey was conducted. Among the findings was that waste picking offers a financial lifeline when, due to inadequate schooling and grinding poverty, individuals would be hard pressed to find employment in the formal economy. The study lays an important foundation for further comparative and qualitative research into this important segment of South Africa’s informal economy.