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.     

Estimating a poverty line: An application to free basic municipal services in South Africa

One of the key interventions aimed at improving the welfare of South African households has been local government's provision of a package of free basic municipal services to poor households. It is, however, not completely clear how different municipalities identify households that are eligible for these services. Evidence suggests that many municipalities currently provide services to all households with a monthly income of less than R1500 a month. This ‘free basic services poverty line’ is, however, low in comparison with a number of unofficial poverty lines used by policymakers and researchers in South Africa. This paper considers the impact of increasing the value of the free basic services line, in terms of the additional share and number of households eligible for support and the additional financial cost. We find that urban municipalities would face the steepest increases in their free basic services budgets with any potential increase in the free basic services poverty line.     

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.     

Poverty and inequality in South Africa: critical reflections

ABSTRACT

South Africa is a paradox; on the one hand, it is one of the most unequal countries in the world. Half of all South Africans continue to live in poverty, economic growth has stagnated and inflation remains high, while the unemployment rate continues to climb towards 30%. On the other hand, it has one of the most progressive constitutions in the world, with a bill of rights that foregrounds expanded socioeconomic rights. We provide an overview of the latest statistics on poverty and inequality in light of overarching economic policies, and the socioeconomic guarantees of the Constitution. We argue that South Africa’s inability to meaningfully address the high levels of inequality is due to insufficient attention to the way power reproduces inequality. We present a definition of power that includes social and market power, and emphasise the importance of a theory of power in understanding the reproduction of inequality.     

The development status of women in South Africa: Patterns and progress in the provinces

The development status of women in South Africa declined between 1996 and 2001. This study examined whether the decline was pervasive throughout the nine provinces, and whether any development patterns were apparent among the provinces. The findings revealed that women had lost ground across the board, both in absolute terms and relative to men. They also showed that certain ranking patterns prevailed among the nine provinces and, notably, that women in provinces with pre-existing poor development statuses may also be predisposed to a poor development status relative to men. This double burden may translate into a perpetuation of poverty for women who find themselves in these provinces.     

Mainstreaming sustainable adaptation to climate change into municipal planning: An analysis from the Eastern Cape,South Africa

Municipalities are well positioned to support adaptation of vulnerable people to climate change; however, they seldom integrate climate change into their planning for social development. The building of adaptive capacity for sustainable adaptation requires that municipalities understand and mainstream climate change into their plans, and develop context-specific adaptation strategies that address existing social development issues. A desktop analysis was conducted to compare the planning landscape in six District Municipalities in the Eastern Cape, South Africa, focusing on Municipal Integrated Development Plans (IDPs). A scoring system was developed for comparing the IDPs of the municipalities, based on levels of context-specific information about climate change, mainstreaming of climate change with other development concerns, and vertical integration across district and local municipalities, amongst other themes. Overall, the mainstreaming of climate change in municipal IDPs in the Eastern Cape remains weak, and requires critical attention if sustainable adaptation is to be achieved.     

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.     

Local municipality productive efficiency and its determinants in South Africa

This paper assesses the technical efficiency of 231 local municipalities in South Africa for 2007 and investigates the potential determinants of efficiency gaps using the non-parametric data envelopment analysis technique. Efficiency scores are explained in a second-stage regression model using a Tobit regression model. To the best of our knowledge, this is the first attempt, using such a technique, to assess technical efficiency at the local government level in the African context. The results show that, on average, B1 and B3 municipalities could have theoretically achieved the same level of basic services with about 16% and 80% fewer resources respectively. Furthermore, fiscal autonomy and the number and skill levels of the top management of a municipality's administration were found to influence the productive efficiency of municipalities in South Africa. Perhaps most importantly, the results depict a bleak picture of the democratic behaviour at the local level in South Africa. It appears that higher income and highly educated households do not feel the incentive to be active participants in public decision-making processes. The paper findings raise concerns over the future of local municipalities in the country, especially about their capability to efficiently deliver expected outcomes on a sustainable basis.     

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.     

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.     

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.     

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.     

Illiteracy in South Africa: Some preventive policies and strategies from a developmental perspective

Literacy plays an important role in the development process and is a mechanism to empower the poor. Illiteracy has reached unacceptably high levels in South Africa. Functional literacy implies more than the ability to read and write in a particular language. To embark on literacy programmes for adults is a valid strategy to combat illiteracy but this approach will only treat the symptoms. Shortcomings in the formal education system, poverty and lack of Government commitment are some of the main causes of this problem in South Africa, which calls for a comprehensive approach such as the introduction of a primary school support programme to help remedy the situation.     

Revisiting wage subsidies: How pro-poor is a South African wage subsidy likely to be?

Wage subsidies have been used in both developed and developing countries to raise employment. After a decade of deliberation, the South African Government recently announced the introduction of a wage subsidy scheme. Given the intrinsic link between unemployment and poverty in South Africa, the belief is that a wage subsidy programme sufficient in scope will also make inroads into poverty. However, the way in which jobs are distributed among poor and non-poor jobseekers is crucial. Our general equilibrium microsimulation model confirms the expectation that a higher wage elasticity of labour demand is associated with larger reductions in poverty. We also find that a greater proportion of new jobs accrue to poor jobseekers when the elasticity is high. While youth-targeting does not improve the poverty-reducing effect of the policy, sectors such as textiles, accommodation, and construction services with their pro-poor employment profiles are good candidates for targeting.     

Market-based incentives in South Africa and Zambia: A comparative analysis of the clean development mechanism

The clean development mechanism (CDM) is intended to serve as a market-based incentive that is both efficient and cost-effective for eligible developing countries. The analysis contained in this article explores why, in theory, such an attractive incentive opportunity has been so under-utilised in sub-Saharan Africa. The paper compares the experience of the CDM in South Africa and Zambia. These two Southern African countries were selected because of their varying levels of statehood, South Africa being an emerging, middle-income economy while Zambia is classified as a least developed country. General challenges affecting the CDM were identified in the literature to be awareness, capacity, eligibility and access to finance. The paper then compares how these overarching issues specifically impact the CDM experience in South Africa and Zambia. The paper finds that common complexities relating to the CDM have varying implications for eligible host countries at different levels of statehood.     

A descriptive study of the dynamics of relative poverty in the Western Cape province of South Africa

This article provides statistical estimates of the level of relative poverty over time in the Western Cape province of South Africa, using data sets from Statistics South Africa. It seems that relatively large numbers of Black and Coloured households are chronically poor, and that substandard education and living conditions are likely to be causing this situation. The authors propose short-term and long-term poverty alleviation plans that aim to increase accessibility to social services and to raise educational levels, to ensure sustainable livelihoods for the people concerned.     

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.     

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.     

Quantifying Inefficient Expenditure in Local Government: A Free Disposable Hull Analysis of a Sample of South African Municipalities

Municipalities in South Africa play a pivotal role in the provision of basic services to communities. However, local government as a sphere in the country is notorious for its spending inefficiency, which is cited as a major factor in service delivery failure. This paper quantifies inefficient expenditure at the local government level by estimating efficiency scores for a sample of 129 municipalities in South Africa from the 2005/2006 to the 2009/2010 municipal financial years. In essence, this paper examines the technical efficiency of municipalities by using the nonparametric free disposable hull approach and finds that 10 municipalities are constantly efficient over the period. On average, input efficiency scores range from 42% to 46%, suggesting that, in general, municipalities can achieve the same output levels with over 50% less resources. Quantitatively for the 2009/2010 financial year, this amounts to a total of R80 billion being spent inefficiently, which equates to R220 million being “wasted” per day.