POVERTY TRENDS IN SOUTH AFRICA

An examination of absolute poverty between 2006 and 2015Dr Pali LehohlaStatistician-General

SignificantstrideshavebeenmadebyGovernmenttowardspovertyandinequality

reduction

• In2001widedispersionofPovertywithMsingahavingapovertyHeadcountofaround60%

• Between2001and2011povertygenerallydeclinesforallmunicipalities

• Howeverbetween2011and2016povertytrendsdivergebetweenmunicipalities

MultidimensionalPovertybyMunicipalities2001-2016

MsingaHeadcount59,8%

MsingaHeadcount24,5%

Intsika YethuHeadcount27,7%

MsingaHeadcount37,2%

71% 70%

58% 55% 54% 54%

52% 50%

44% 41%

11% 10%

21% 25% 22% 26% 26% 32%

36% 32%

0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0 100,0

WC

GP

RSA

FS

MP

KZN

NW

NC

EC

LP

Salaries Remittances Pensions Grants Othersources None

Considerableprovincialvariationsarenotable.WesternCape(71,0%)andGauteng(70,0%)weretheonlytwoprovincesinwhichmorethantwo-thirdsofhouseholdsreportedsalariesastheirmainsourcesofincome.

Percentagedistributionofmainsourceofincomebyprovince,2016

Source:GHS2016

63,9%

77,2%71,9%

88,1%94,5% 92,2%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

Male Female Total

Perc

enta

ge

Allolderpersons Olderpoorpersons

Nationally,71,9%ofallolderpersonsinSouthAfricaarecoveredbyanold-agegrant,whereasthecoveragerateamongstolderpoorpersons(asdefinedbytheUBPL)wasnotablyhigherat92,2%.

Proportionofolderpersons(60+)receivingoldagegrantsbysexin2015

Governmentinterventionstowardspovertyandinequalityreduction

About 3.6 million households are registered as indigent households of which;

62,8% receive free electricity

67,8%receive free piped water

57,6%receive free sanitation services

57,6%receive free refuse removal services

To date more than 17 million social grants are issued on monthly basis to people who qualify the means test

About 4.3 million RDP houses and subsidies have been delivered since 1994

About 76.2% of pupils in South Africa are benefiting from school feeding schemes

More than 20 000 schools are declared as no fee schools

Source: NFCM Source: NFCM

Source: SASSA and Department of Human Settlements Source: Department of Basic Education

Source: Gross domestic product (GDP), Q4 2016

CurrentstatevsNDPtarget:Economicgrowth

22,3 million(down by 150 000 q-q)

Labour force

16,1 million(down by 113 000 q-q)

Employed

6,2 million(down by 37 000 q-q)

Unemployed

14,9 million(up by 306 000 q-q)

Not economically active*

*Of which 2,4 million were discouraged work

seekers( up by 83 000 q-q)

37,2 million(up by 157 000 q-q)

people of working age in South Africa

(15 – 64 year olds)

ILO hierarchy – Employed first then unemployed and the remainder is NEA (including discouraged job-seekers).

3 mutually exclusive groups. Cannot be in two groups at the same time

NDP target 2030 Employment:

24 million

ThelabourmarketQ2:2017

4,4m

6,2m

0,01,02,03,04,05,06,07,0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Milli

on

Number of unemployed

57,0%

67,2%

10,0

30,0

50,0

70,0

90,0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Long term unemployment

LabourMarketDashboard

Source: QLFS Q2 2017

Increasingnumberofunemployedpersonswerewitnessedduring2008to2015

Reducing the proportion of persons living belowthe lower-bound poverty line

Reduceincomeinequality

Increasetheshareofincomegoingtothebottom40percentofhouseholds

Reducepoverty-inducedhunger

Seekstotacklepovertyandinequality

Povertyisacomplexissuethatmanifestsitselfineconomic,socialandpoliticalwaysNosingledefinitionwilleverbesuitabletomeasureallfacets

anddimensionsofpoverty

WhatisPoverty?

StatsSAappliesandmeasuresvariousdefinitionsofpoverty

Subjectivepoverty(self-perceived)

Money-metric(lackofincome/expenditure)

Multidimensionalpoverty(lackofbasicservices,education,etc.)

Inequality(Ginicoefficient,shareofexpenditure,etc.)

UsedInThis

Release

FutureReleases

PilotofPovertyLines

Firstdevelopedaspilotlinesin2008usingtheIES2000as

itsprimaryinput

2008

20123NationalPovertyLines

In2012,StatsSApublishedthecountry’sofficialthreenationalpovertylines

20141stPTR

In2014, StatsSApublishedthefirstPovertyTrends

Report

2015

StatsSApublishedrebasedpovertylinesin2015usingthelatest

consumptionandspendingpatternsmeasuredintheIES2010/11

RebasedPovertyLines

1 2 3 4 5

2nd PTR2017

In2017, StatsSApublishedthesecondPovertyTrends

Report

StatsSAadoptedthecost-of-basic-needsapproachforthedevelopmentofthelineswhichlinkswelfaretotheconsumptionofgoodsandservices

Howthepovertylinesweredeveloped

Thresholdofabsolutedeprivation.Theamountofmoneyrequiredtopurchasetheminimumrequireddailyenergyintake

FoodPovertyLine

R441

Austerethresholdbelowwhichonehastochoosebetweenfoodandimportantnon-fooditems

Lower-BoundPovertyLine

R647

Upper-BoundPovertyLine

R992ThresholdofrelativedeprivationbelowwhichpeoplecannotaffordtheminimumdesiredlifestylebymostSouthAfricans

*Basedon2015prices

531

758

1 138

0

200

400

600

800

1000

1200

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (April) 2016 (April) 2017 (April)

Povertylinesatcurrent2017prices

NonPoor -45,5%

Poor -55,5%

Over30,4million SouthAfricanswerelivinginpoverty

in2015

UpperBoundPovertyLine

PovertyheadcountsbasedontheUBPL

Upper-BoundPovertyLine Lower-BoundPovertyLine

NonPoor -45,5%

Poor -55,5%

NonPoor- 60,0%

Poor -40,0%

NonPoor -74,8%

Poor -25,2%

FoodPovertyLine

Povertyheadcountsin2015In2015,morethanaquarterofthepopulationwerelivingbelowthefoodpovertyline

28,4% 33,5%

21,4%

25,2%

51,0%

47,6%

36,4%

40,0%

66,6%

62,1%

53,2%

55,5%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2006 2009 2011 2015

Percen

tage

Approximately13,8millionSouthAfricanswerelivingbelowtheFPLin2015,downfromapeakof16,7millionin2009.

PovertyheadcountsbasedontheFPL,LBPLandUBPL

7,4 7,2 8,6 8,5

10,7 7,0 7,7 8,1

13,4 16,7 11,0 13,8

15,8 18,9 24,024,4

0

10

20

30

40

50

60

2006 2009 2011 2015

Millions

UBPLPoor LBPLPoor FPLPoor Non-Poor

InPoverty

Non

Poo

r

ThenumberofpoorpersonsinSouthAfrica(inmillions)(2006- 2015)

77,5%

70,3%

57,3%

55,2%

53,6%

55,0%

64,7%

0 10 20 30 40 50 60 70 80

0-17

18-24

25-34

35-44

45-54

55-64

65+

Povertyin2006

Children

Elderly

Changeinpovertybetween2006and2015

0 10 20 30 40 50 60 70 80

0-17

18-24

25-34

35-44

45-54

55-64

65+ - 20,7%Points

-10,7%Points

-11,7%Points

-11,4%Points

- 10,2%Points

-10,2%Points

- 6,3%Points

Povertyin2015

Children

Elderly

Changeinpovertybetween2006and2015

Circumstancesvarybetweenprovinces,betweenruralandurban,bypopulationgroup

andbygender

25,0

35,0

45,0

55,0

65,0

75,0

85,0

2006

2009

2011

2015

2006

2009

2011

2015

2006

2009

2011

2015

2006

2009

2011

2015

2006

2009

2011

2015

2006

2009

2011

2015

2006

2009

2011

2015

2006

2009

2011

2015

2006

2009

2011

2015

LP ECKZN

MPNC

NW

FS

WCGP

ThepoorestthreeprovincesinthecountryhaveconsistentlybeenLimpopo,EasternCape&KwaZulu-Natal.

WesternCape&Gautengremainthetwoprovinceswiththelowestpovertyheadcountsat37,1%&33%respectively.

ForPeriods2006/2009/2011/2015

Povertyheadcountsbyprovince(UBPL)

52,0 46,8

38,840,6

87,6 88,0

77,081,3

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

2006 2009 2011 2015

Perc

enta

ge

Rural

Urban

Inurbanareas,thepovertyheadcounthaddeclinednotablyfrom52,0%in2006to40,6%in2015.

Poorpeoplelivinginruralareaswerenotonlyfurtherawayfromthepovertylineonaverage,butthepoorestofthepoorinthoseareasaresignificantlyworseoffthantheirpoorcounterpartslivinginurbanareas.

DifferenceinpovertylevelsbetweenRuralandUrban

Povertyheadcountsbysettlementtype(UBPL)

64,1% 60,1%

51,4% 53,7%

68,9% 63,9%

54,9% 57,2%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

2006 2009 2011 2015

Percen

tage

Females remain more disadvantaged than males consistently recording a higher headcount, gap and severity measures at each point in time; however, the difference between the sexes is narrowing.

Povertyheadcountsbysex(UBPL)

43,3

40,1

31,7

33,0

65,857,6

47,850,0

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2006 2009 2011 2015

Perc

enta

ge

Male Female

In2015,theincidenceofpovertyformale-headedhouseholdsincreasedto33%(a1,3%pointincreasefrom2011)comparedto50%forfemale-headedhouseholds(a2,2%pointchangefrom2011)

Notabledropinpovertyinmale-headedhouseholdsbetween2009and2011

Povertymeasuresofhouseholdsbysexofhouseholdhead(UBPL)

76,8% 72,6%

62,4% 64,2%

56,1%

45,5%

37,1% 41,3%

20,9%

14,4%

6,5% 5,9%

1,4% 1,9% 0,9% 1,0%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

2006 2009 2011 2015

Percen

tage

Povertyheadcountsbypopulationgroup(UBPL)

White

In2015,nearly3outof5blackAfricanswerepoor

TheIndian/Asianpopulationgroupwastheonlygroupwheretheproportionofpoorconsistentlydecreasedbetween2006and2015

86,4

79,2%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

80,7

72,676,1

69,2 64,8

57,8

9,4 8,4%

40,0

35,6

ForPeriods2006/2009/2011/2015

Anindividual’seducationalleveliscloselyrelatedtopoverty

NoEducationSomePrimary

Primary

SomeSecondary

Matric

HigherEducation

79,2%ofindividualswithnoformaleducationwerepoorcomparedtoonly8,4%ofindividualswhohadapost-matricqualificationin2015

Percentage

Individualpovertybylevelofeducation(UBPL)

Dataappliestopersonsage18+

InequalityPersists

0,720,69 0,69

0,68

0,50

0,55

0,60

0,65

0,70

0,75

0,80

2006 2009 2011 2015

Ginico

efficient

Ginicoefficients(income)sawaveryminimaldeclineoverthe10yearperiod

Ginibasedonincomepercapita(2006,2009,2011&2015)

TheGinicoefficientisbasedonincomepercapitaincludingsalaries,wagesandgrants

0,720,70 0,69 0,68

0,640,66

0,65 0,65

0,600,57 0,59 0,58

0,560,53

0,50

0,560,56

0,470,45

0,51

0,30

0,35

0,40

0,45

0,50

0,55

0,60

0,65

0,70

0,75

0,80

2006 2009 2011 2015

GiniCoe

fficien

t

ThepopulationgroupwiththehighestlevelofinequalityareblackAfricans

BlackAfricanshadthehighestlevelofincomeinequality

BothwhitesandIndian/AsianssawtheirGinicoefficientsincrease,withthewhitepopulationrisingto0,51andIndian/Asiansreturningtotheir2006levelof0,56

GiniCoefficient(Incomepercapita)bypopulationgroup(2006,2009,2011&2015)

350 937

195 336

124 445

67 828

White-headed households (R350 937) spent five times more than black African-headed households (R67 828) and three

times more than the national average

BlackAfrican

Coloured

Indian

White444 446

271 621

172 765

92 983

0 50000 100000 150000 200000 250000 300000 350000 400000 450000

AverageExpenditure AverageIncome

Indians/Asian headed households (R195 336) spent almost three times more than black headed households

Averageannualhouseholdconsumptionexpenditureandincomebypopulationgroupofhouseholdhead

30,0%

22,0%

12,5% 9,8%

25,7%

10,5%

34,0%

16,8% 15,4%

23,3%

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

Food Housing Transport Miscellaneous Other

Poor Non-Poor

Poorhouseholdsspentthelargestproportion(30,0%)oftheirtotalexpenditureonfoodcomparedtojust10,5%innon-poorhouseholds. Thebiggestproportionofhousehold

expenditurefornon-poorhouseholdswenttowardshousingandutilities(34,0%)

Averageannualhouseholdconsumptionexpenditureforpoorandnon-poorhouseholds,2015

Dietaryintakeofthenon-poorandpoor

PoorHouseholds Non-PoorHouseholds

Reducing the proportion of persons living belowthe lower-bound poverty line

Reduceincomeinequality

Increasetheshareofincomegoingtothebottom40percentofhouseholds

Reducepoverty-inducedhunger

Seekstotacklepovertyandinequality

RevisitingtheNDP

39,0 40

00

5

10

15

20

25

30

35

40

45

2008 2013 2018 2023 2028 2033

40,0

Reducingtheproportionofpersonslivingbelowthelower-boundpovertylinefrom39percent(in2009)tozeroby2030

Reducepoverty-inducedhungerto0%by2030

21,425,2

00

5

10

15

20

25

30

2008 2013 2018 2023 2028 2033

Baseline(2009) MostRecentFigure(2015)

Target

Baseline(2011)

MostRecentFigure(2015)

Target

%

%

0,7

0,68

0,6

0,58

0,6

0,62

0,64

0,66

0,68

0,7

0,72

2008 2013 2018 2023 2028 2033

Reduceincomeinequalityfrom0,7in2010to0,6by2030

Baseline(2010)

MostRecentFigure(2015)

Target

6

8,3

10

0

2

4

6

8

10

12

2008 2013 2018 2023 2028 2033

Theshareofincomegoingtothebottom40percentofhouseholdsshouldrisefrom6percentto10percent

Baseline(2010)MostRecentFigure(2015)

Target

%

Householdsize:2,4

Householdincome:R199267

Ownershipofdwelling:60,1%

Pipedwaterinside/onsite:86,7%

Electricity:91,4%

Householdsize:4,6

Householdincome:R46624

Ownershipofdwelling:78,2%

Pipedwaterinside/onsite:59%

Electricity:80,5%

PoorHouseholds Non-poorHouseholds

HouseholdExpenditureR31669

Flushtoilet:39,3% Flushtoilet: 80,8%

Non-poorhouseholdshadbetteraccesstoservicescomparedtopoorhouseholds

ProfileofPoorandNon-poorhouseholds

HouseholdExpenditureR151097

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