There are currently more people receiving social grants in South Africa than there are people with jobs, according to the IRR’s latest “South Africa” survey.
“In 2016, there were 15,545,000 people with jobs in South Africa while 17,094,331 people were receiving social grants,” said IRR analyst, Gerbrandt van Heerden.
“The numbers are a recipe for social and political chaos. With South Africa formally in recession, the government will find it difficult to afford the cost of its social grants programme.”
“As the economy stagnates, and tax revenue slows, demand for more grants will increase. The government will then have to cut other areas of expenditure to meet popular demands for more and higher grants. We predict that this will lead to much higher levels of violent protest action.”
In comparison, the IRR Survey showed that in 2001 there were 12,494,000 people employed and 3,993,133 people receiving social grants. This equates to a 328% increase in the number of people receiving grants, while those with jobs increased by only 24%.
“There is no doubt that the grants rollout did a lot to improve living standards in South Africa. However, the grants have become a double-edged sword,” said van Heerden.
“The inability to continue expanding the rollout while also increasing the value of grants will see living standards begin to stagnate and even slip. Poor and unemployed people will be worst affected and may suffer new misery as their living standards begin to fall.”
The report also noted that due to recent political and economic issues, the slowing of the economy will make it harder for government to expand the rollout of grants, or to increase their value – exacerbating the situation.