Poverty: Redistribution of productive assets needed – Oxfam SA

Organisation says StatsSA report is a clear indication of failure to dismantle legacy of apartheid 23 years into democracy

Oxfam SA not surprised by rising poverty levels, calls for bold policies to end poverty and inequality 

23 August 2017

Oxfam South Africa notes with grave concern the grim reality of rising levels of poverty painted by the Statistics South Africa report “Poverty trends in South Africa: An examination of absolute poverty from 2006-2015”.

The report indicates that since 2011 the number of South Africans living in poverty has risen to 55.5% of the population, which is over half of the country’s citizens.

The report further indicates that those greatly affected and impacted by poverty are not surprisingly children up to 17 years, black Africans, women, and people from rural areas, with rural provinces like Limpopo, Eastern Cape and KwaZulu-Natal more affected.

The report is a clear indication of failure to dismantle the legacy of apartheid 23 years into the democratic dispensation. The apartheid spatial geography of pre-1994 showed the same problems in the same areas – mostly in former Homelands – as highlighted in the report. During the apartheid era, poverty had the face of a black African, a woman, a child and was largely rural, as it is today.

Since 1994, civil society organisations including ourselves and progressive economists have raised the flaws in government’s policy choices, pointing out how these exacerbate poverty, inequality and joblessness in South Africa. 

Whilst the impact of “external shocks” as mentioned by the Statistician General is real, flawed policy choices and mismanagement of the economy by the government are largely to blame. 

Effective management of an economy, which means stewarding it to withstand the “combination of international and domestic factors such as low and weak economic growth, continuing high unemployment levels, higher consumer prices especially for energy and food, lower investment levels, greater household dependency on credit, and policy uncertainty” that the SG speaks of is the role of the government.

This narrow suggestion is contrary to our view that weak economic growth is a direct of exclusionary economic policies that have failed since 1994 to redistribute income and wealth, leaving the bulk of the black African population, especially women, children and people especially from rural areas outside the mainstream economic life. This writing out of economic participation, has limited the purchasing power of many, including the 17 million beneficiaries or 33 percent of the population who rely on social grants in the 2017/18 fiscus.

At the top of the agenda should be the effective redistribution of productive assets like land, key in addressing chronic and transient poverty. Empirical evidence suggests that both chronic and transient poverty are reduced by greater command over physical capital, and life-cycle effects. Irresponsible issuance of mining licences by government took the bulk of arable land and water away from food production, polluted the environment and left the poor with rampant food price inflation. A failed land restitution and redistribution programme, had the same effect too - as recipients lacked the necessary support with skills, finance and market access. We must fix these flaws.

“These levels of Poverty and inequality violate the very essence of our social contract, the fabric of a just South Africa espoused in our country’s constitution.  Left unchecked, they are the breeding ground for the sense of betrayal many feel and an unstable country where the social cohesion needed to take the country forward is eroded.” said Oxfam SA’s Executive Director Siphokazi Mthathi. “In Oxfam SA’s report “Hidden Hunger”, we outlined how 1 in 4 households in South Africa run out of money to buy food during any given month. Whilst this correlates with the unemployment claims in the StatsSA’s report, ‘poverty wages’, rising energy and transport costs and how middle-income earners are often under pressure to support large, extended networks of unemployed people, indicate an urgent need for policy coherence to address the drivers of these poverty trends” Mthathi added.

In our report ‘Starting with people,’ released on the side-lines of the World Economic Forum on Africa in May 2016, we make concrete recommendations about how Africa’s leaders can use a combination of economic, taxation and social spending policies to build economies that work for all, especially the poor and women. This calls for a deliberate investment in economic activities that support people’s livelihoods, a “people’s economy”, including investments in agriculture in general, and on smallholder agriculture in particular, which offer the greatest potential to reduce poverty.

“The Stats SA report is a call to action, to deal decisively with the legacy of the country’s apartheid past, by decimating the structural foundations of its mechanisms to create and perpetuate demeaning poverty, inequality and material want for a majority of its people. It calls on government to do more to tackle inequality by increasing and improving social spending; building fairer tax systems; and ensuring workers – especially women workers - are better paid and better protected” said Thembinkosi Dlamini, Oxfam SA’s Economic Justice Lead.

As Oxfam SA, we are taking very seriously this report and are ready to contribute meaningfully in to an inclusive, government led agenda to achieve SA’s inclusive developmental mandate.  Furthermore, we will work with others to ensure the “poor” cited in this report, understand its implications and take steps to demand accountability from their leaders to reverse this disastrous trend. This report makes an urgent case for  our government’s attention to be directed at the root causes of poverty, inequality and joblessness and not distracted by the narrow political and elite interests and agendas currently distracting the country away from building the foundations for a just and dignified future for all.

Issued by Isaac Mangena, Senior Media and Communication Manager, Oxfam SA, 23 August 2017