An overview of poverty and inequality in South Africa - Working Paper prepared for DFID (SA)
3. Who is poor in South Africa?
Living standards are closely correlated with race in South Africa.
While poverty is not confined to any one racial group in South Africa, it is
concentrated among blacks4, particularly Africans.
According to the 1999 October Household Survey:
The neat division of the South African population into only four race groups obscures the fact that there are some small ethnic minorities (such as the San) whose live in extreme poverty. These groups are not adequately captured in household surveys.
- 52% of Africans are poor5.
- While Africans make up 78% of the population, they account for 95% of the poor.
- 17% of Coloureds are poor, in comparison with rates of less than 5% among Indians and Whites.
Since a household survey collects information principally at the household level, it cannot tell us much about the inequalities in resource allocations within households. When we talk about poor women, for example, we are talking about those women who are living in poor households. In reality, there may be many women who, although they live in non-poor households, should be counted as poor because of the inequalities in intra-household allocations. What does emerge clearly from the South African household surveys, however, is that households headed by women are more likely to be poor.
Poor households lack access to basic services, although there have been remarkable strides in the provision of clean water and adequate sanitation since 1994. According to the OHS of that year, in 1999,
- A household headed by a resident male has a 28% probability of being poor, whereas a household with a de jure female head has a 48% chance of being poor and a household with a de facto female head (because the nominal male head is absent) has a 53% chance of being poor.6
- There are at least four factors at play here: female-headed households are more likely to be in the rural areas where poverty is concentrated, female-headed households tend to have fewer adults of working age, female unemployment rates are higher and the wage gap between male and female earnings persists .
There is a very strong correlation between educational attainment and standard of living (see Figure 2). According to the 1998 IES and OHS,
- 75% of the non-poor had electricity, compared with 27% of the poor;
- 73% of the non-poor had access to adequate sanitation (flush, Chemical or VIP toilet), compared with 38% of the poor;
- 77% of the non-poor have piped water, compared with 47% of the poor.7
Enrolment rates in South Africa are high and do not reflect gender bias: the gross primary enrolment for boys is 135% and 131% for girls , although this is hard to interpret because of high repeat rates. In 2000, 94% of boys and 95% of girls aged 8-16 were enrolled in school .
- 58% of adults with no education are poor;
- 53% of adults that have less than seven years of (primary) education are poor.
- 34% of adults with incomplete secondary schooling are poor;
- poverty rates drop significantly with the attainment of вЂњmatricвЂќ and further qualifications. 15% of those with completed high school are poor and only 5% of those with tertiary education are poor.8
Poverty and morbidity and mortality are linked. The poor have particular difficulties in accessing health care because they do not have the most basic income for transport, food and basic clothing .
South Africa has one of the highest per capita HIV prevalence and infection rates in the world with an HIV prevalence rate for adults of about 25 per cent in 2001. The comparative figure for the whole population was about 13 per cent. The percentage of adult deaths that could be attributed to AIDS-related diseases increased from about 9 per cent in 1995/1996 to about 40 per cent by 2000/2001. HIV/AIDS is impacting negatively on human capital realisation, skills availability and skills shortages in South Africa. HIV/AIDS will also have dire consequences for household income and household expenditure patterns .
- 54 of every 1000 rural African infants dies before age 1; compared with 39 urban African infants and 11 White infants  (see Table 1).
- Child (under 5) mortality in the poorest province, Eastern Cape, is 81 per 1000, compared with 13 in the Western Cape .
- Health expenditure is 7% of GNP, but less than half of this is public spending .
- Less than one-fifth of South Africans belong to medical aid schemes, yet the private health care system employs 85% of pharmacists and 60% of medical specialists .
- There are health spending and service-level inequities between rural and urban areas. For example, in 1998 public health spending in the Grahamstown district is four times the level of the Mount Frere district .
- TB testing is available at 88% of urban clinics, but only at 59% of rural ones .
- Pap smears are only available at 29% of rural clinics, compared with 72% of urban clinics .
- In 2000, 25% of women attending antenatal clinics were HIV-positive. However, in KwaZulu-Natal 36% were infected, compared with less than 10% in the Western Cape .
Children are disproportionately represented among the poor.
The disabled population are also disproportionately poor.
- Almost 10 million (or 58% of) children are poor (using a relative poverty line which defines the poorest 40% of households as poor).
- Three-quarters of children (more than 2 million) in the Eastern Cape are poor.
- Around 30% of children in Eastern Cape, Limpopo and Free State are will not grow to their full potential (Health Systems Trust, 1998).
- The number of children orphaned by AIDS in South Africa may reach 1 million children by 2004. 9.
Not surprisingly, poverty and unemployment are closely linked. Table 2 shows that the unemployment rate among those from poor households is 52%, in comparison with an overall national rate of 29%. In addition, labour force participation is lower in poor than non-poor households. More than half of the working-age poor (or about 5 million adults) are outside of the labour market. As a result, the percentage of working age individuals from households below the poverty line that are actually working is significantly lower than average. Only 24% of poor adults (about 2 million people) are employed, compared with 49% (or 8 million) from non-poor households.
- The 1999 OHS suggests that while less than 2% of individuals living in households with monthly incomes above R10 000 are categorised as disabled, the disability rate was more than twice as high for individuals living in households with monthly incomes below R800 per month (in 1999 terms).
Figure 3 shows the differences between the sources of income for poor and non-poor households10 (where вЂњpoorвЂќ means below the higher poverty line defined above). It is clear that the poor are far more dependent on remittances and state transfers than the non-poor. What cannot immediately be seen from the graph is that poor households typically rely on multiple sources of income. This reduces risk, as the household is less vulnerable if it should experience a sudden loss of income from a particular source. Figure 3 again highlights the importance of wage income. Poor households are characterised by a lack of wage income, either as a result of unemployment or of low-paid jobs. The cost of unemployment goes further than loss of income and even feelings of personal worth. South AfricaвЂ™s failure to socialise many young men, which is evident in the high rates of crime, alcohol abuse and family violence creates a vicious cycle of family breakdown .
The term вЂњblackвЂќ refers to Africans, Coloureds and Asians.
- By poor we mean that household income is less than R800 per month (1999 Rands).
- These figures are based on the PSLSD data as the 1995 OHS data did not make a distinction between de facto and de jure household heads.
- The figure for access of the non-poor to safe water is up dramatically from the 1995 figure of only 28%.
- The incidence of poverty among those with some tertiary education is largely accounted for by young adults that are still studying and thus not yet reaping the financial rewards of their education.
- A cumulative number of 1.1 million children will likely be orphaned by AIDS within the next five years, but since approximately one-third of infants born to HIV-positive mothers are infected, without treatment, some infants who are destined to be orphans will also be diagnosed with AIDS themselves.
- Capital income refers to income from sources such as dividends, interest and imputed rent. Imputed rent is the price attached to the benefit of owning the dwelling in which the household resides. The household is, in effect, renting the dwelling from itself.