There were more than 17-million South Africans dependent on social grants on a monthly basis compared with about 15.5-million South Africans with jobs last year, the South African Institute of Race Relations (IRR) said on Wednesday.
In a finding released in the institute’s latest South Africa Survey, it said this did not bode well for the economy because government would find it harder to expand the rollout of grants or to increase their value.
“The numbers are a recipe for social and political chaos,” the institute’s analyst Gerbrandt van Heerden said.
“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 in order to meet popular demands for more and higher grants. We predict that this will lead to much higher levels of violent protest action.”
'A double-edged sword'
In a survey conducted by the institute in 2001, around 12.4-million people were employed compared to around 3.9-million people receiving social grants.
This roughly translated to 330 people with jobs for every 100 people on social welfare. By 2012, the ratio had dropped to 90 people in employment for every 100 social welfare beneficiaries, the IRR said in 2013.
By 2016, the number of people receiving grants had increased by 328% while those with jobs increased only by 24%, it said.
“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,” Van Heerden said.
He said the inability to continue expanding the rollout while also increasing the value of grants would see living standards begin to stagnate and even slip.
Poor and unemployed people would be worst affected and could suffer new misery as their living standards began to fall.
The consequences for social cohesion would therefore end up being severe as inequality increased, he said.
“The pending grants crisis will trigger much suffering and desperation in already poor communities.”