South Africa’s expansive social grants system, insurance schemes and social relief are unpacked in this World Bank report. Launched on 7 October, the Report, produced in collaboration with the South African government, finds that overall, South Africa’s social assistance programmes are effective, well-targeted, and provides sizeable benefits to the poorest households. The social assistance system effectively reduces poverty and inequality rates. Cash transfer programmes are having positive and important impacts on a wide variety of outcomes, including nutrition and food security, educational attainment, health, labour supply, and livelihoods.
Accounting for 3.3% of GDP and 15.4% of total government spending, the cost of South Africa’s social assistance system is relatively high compared to the average of other upper middle-income countries (UMICs). With 51% of its spending going to the Older Persons Grant, South Africa spends five times more than its peers on social pensions, although the report notes that social pensions are leveraged to compensate for the poor coverage of the system of contributory pensions in South Africa. Likewise, with 38% of spending going to Child Support Grants and other targeted grants such as the Care Dependency Grant and the Foster Child Grant, South Africa’s provision of social grants aims to respond to diverse household needs.
But is this enough? Prof Leila Patel and Prof Lauren Graham highlight the need to connect the most vulnerable people with a range of public services that can address the many barriers poverty creates. While the massive social support system remains important they say that we need to do more and tackle the root causes of poverty, which are systemic. This means they cannot be shifted with a single intervention. That’s because cycles of disadvantage accumulate over long periods, generate multiple barriers, and are transferred across generations.