IMPROVING LIVES THROUGH DATA ECOSYSTEMS

Press Statement                                                                                                          3 April 2014

Poverty Trends in South Africa

South Africa winning war on poverty

Poverty levels in the country have declined as the number of people living below the poverty line dropped since 2006. The Poverty Trends Report released by Statistics South Africa reveals that people   living below the food poverty line (FPL) has dropped to 20,2% of the population.

According to the report, poverty levels in the country have dropped since 2006, reaching a low of 45,5% in 2011, when applying the upper-bound poverty line (R620 per capita per month in 2011 prices). This translates into roughly 23 million people living below the upper-bound poverty line (UBPL).

The Poverty trends report analysed trends in poverty and inequality between 2006 and 2011 based on money-metric data collected through the Income and Expenditure Survey (IES) 2005/06 and 2010/11, as well as the Living Conditions Survey (LCS) 2008/09.

A growing social safety net, real income growth, above inflation wage increases, decelerating inflationary pressure on households, expansion of credit and the growth in formal housing can be attributed to the drop in poverty levels.

The dramatic impact that the global financial crisis of 2008/09 had on the livelihood of South  Africa’s poorest can be identified among those who live in extreme poverty, defined as those living below the food poverty line (R321 per capita per month in 2011 prices). The number of people living below the food poverty line (FPL) increased between 2006 and 2009, before dropping in 2011 to 10,2 million people (roughly 20,2% of the population). Despite the adverse impact of the financial crisis, poverty levels did noticeably improve according to 2011 estimates.

The depth of poverty declined between 2006 and 2011 and the gap of those who remain poor has been reduced which reflects the various successes of pro-poor elements of the country’s policies.

While the poverty situation is improving, inequality however remains a challenge. The Gini coefficient, which is a number between 0 and 1, where 0 indicates total equality and 1 indicates total inequality, is calculated to be approximately 0,65 based on expenditure data  and 0,69 based on income data in 2011. These high levels of inequality, amongst the highest in the world, are only slightly smaller than the Ginis recorded in 2006. The share of national consumption between the richest and poorest remains stubbornly stagnant. The richest 20% of the population account for over 61% of consumption in 2011 (down from a high of 64% in 2006). Meanwhile, the bottom 20% see their share shrinking from 4,4% in 2006 to 4,3% in 2011.

Media enquiries:

Ms Kefiloe Masiteng

Deputy Director-General: Population and Social Statistics, at (012) 310 2109

Technical enquiries:

Ms Nozipho Shabalala

Executive Manager: Poverty and Inequality Statistics, at (012) 310 8610