Report from the latest General Household survey results released by Statistics South Africa reveals that over 16 million South African citizens rely solely on social grants
South Africa has a well-established social welfare system and a large proportion of social spending going towards social grants but the latest report reveals a very striking increase in the percentage of citizens who relay on such grants.
Compared to 12.7% recorded in 2013, the percentage of people who rely on social grants rose to just over 30 percent (16.9 million) in 2015 and Stats SA’s Kefilwe Mosipeng said its an indication that “many people in the country are unable to fend for themselves and therefore find themselves depending on the state.”
South African Social Service Agency (SASSA) administers seven long-term grants which include grants for older persons, Disability Grant, War Veteran’s Grant, Foster Child Grant, Child Support Grant, Grant-in-Aid and Social Relief of Distress, but Mosipeng warns that such high number of state dependents negatively affects the nation’s economy.
According to him, the high dependence weighs negatively on the country’s economic growth as the individuals are not economically active.
“The moment it starts to sway toward higher numbers of state dependency means there is a burden that has been put on the economy itself.”
Social Grants are in place to improve citizens standards of living and redistribute wealth to create a more equitable society as inscribed in Sections 24 through 29 of the Bill of Rights in the South African Constitution.
Through this act, government is obligated to progressively recognize and actualize these socio-economic rights of citizens. But with the rising number of dependents, come a growing warning call on how this could hamper the nation’s economic growth especially as it is about to be downgraded to junk status.
South Africa is said to be currently spending over 4% of its GDP on social grants and is concerned over whether South Africa’s spending on social welfare is sustainable in the long term
However, treasury’s long-term fiscal study shows that “the current level of social spending will be sustainable as long as the economy grows by 3% a year”, although it does provide a very narrow margin for additional spending.
There is now more need for a higher economic growth to achieve this but the International Monetary Fund (IMF) forecasts economic growth for South Africa of only 2.1% for 2015 and 2.5% in 2016.