Widespread and enduring poverty is a central feature of South African life. There is a lively political and academic debate around the causes of poverty, its nature and extent, and ways of alleviating it (Du Toit 2005).
While various positions are advanced, there is broad agreement that poverty exists on a vast scale that it is closely correlated with race and that, by many indicators, the situation has deteriorated since the transition to democracy.
There is also broad agreement that South Africa is not, by international standards, a particularly poor country – it is typically described as a middleincome or upper-middle income country on the basis of per capita GDP – but that it is an exceptionally unequal one, perhaps the most unequal in the world according to some commentators like May (2002:2) “South Africa is an upper-middle-income country despite this relative wealth, the experience of the majority of South African households is either one of outright poverty, or of continued vulnerability to becoming poor. Furthermore, the distribution of income and wealth in South Africa may be the most unequal in the world”.
According to the HSRC (2004) the proportion of people living in poverty in South Africa in 2001 was 57%, unchanged from 1996, but that the extent of poverty (i.e. how far people are below the poverty income line) grew over this period, “The poverty gap has grown faster than the economy indicating that poor households have not shared in the benefits of economic growth. In 1996 the total poverty gap [the required annual income transfer to bring all households out of poverty] was equivalent to 6.7% of gross domestic product (GDP); by 2001 it had risen to 8.3%”.
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This rise in inequality is captured in South Africa’s Gini coefficient for income, which rose from 0.69 in 1996 to 0.77 in 2001, with the greatest degree of inequality being found within the black (African) population group, “the overall driver of income inequality in post-Apartheid South Africa continues to be the rising inequality amongst African households’ (HSRC 2004).
Poverty is closely correlated with race and gender, and is concentrated in rural areas. Limpopo and the Eastern Cape provinces have the highest proportion of poor people, with 77% and 72% of their populations living below the poverty income line, respectively, in 2001”. The Western Cape has the lowest proportion in poverty, at 32% of the population, followed by Gauteng, at 42% (HSRC 2004). Bhorat and Kanbur (2006:4) point out, however, that while there are higher rates of poverty in rural than in urban areas, the proportion of the total poor who reside in rural areas is declining, from 62% in 1996 to 56% in 2001, “This suggests a rapid process of urban migration that could in the future reshape the spatial nature of poverty in South Africa”. Female-headed households also tend to be disproportionately poor, which Woolard and Leibbrandt (1999) attribute to a combination of factors, “female-headed households are more likely to be in the rural areas where poverty is concentrated, female-headed households tend to have fewer adults of working age, female unemployment rates are higher and the wage gap between male and female earnings persists”. Aliber (2001: 29) reports that, in 1999, 42% of all African households (i.e. 2.7 million) were female-headed, and that roughly 28% of these households were ‘chronically poor’.
In a review of poverty and policy in South Africa in the first ten years of democracy, Bhorat and Kanbur (2006: 12-13) identify five main trends, which are largely hostile to the poor, albeit with some ameliorative effects:
- An increase in both absolute and relative income poverty
- An increase in income inequality
- Increased unemployment rates (as growth in the labour force outstrips growth in employment)
- A large fiscal resource shift that has engendered wider access to assets and basic services for poor households
- ‘Tepid’ economic growth rates, which have failed to keep pace with population growth “The first ten years have seen rising unemployment, rising income poverty and rising income inequality, all in the context of a lacklustre performance in economic growth” (Bhorat and Kanbur 2006: 1)
Redistribution of assets – notably land – has a special place within the discourse on redistribution, both in South Africa and internationally. Land redistribution (including the associated processes of restitution and tenure reform) has been an important component of policy since 1994 and features prominently in the 1996 Constitution. Yet, an explicit link between land reform and poverty is difficult to find in official policy pronouncements, especially since the change from the Mandela to the Mbeki presidency in 1999. Indeed, as will be shown in further sections of this paper, the arguments for land reform in South Africa have been dominated since the outset by a discourse of restorative justice which seeks to return land to its previous owners and redress racial imbalance in landholding, with relatively little attention to the economic dimensions of land use, in general, and the links between land reform and poverty alleviation (or economic growth) in particular.
The underperformance of the South African land reform redistribution programme is the main focus on this paper7. First, however, it is important to consider the theoretical arguments for land reform and the ways in which redistribution is linked to poverty alleviation, both in South Africa and internationally.
The debate around land reform in South Africa, prior to and following the transition to democracy, has included a variety of demands and objectives, prominent amongst them being the return of land to those who were unfairly dispossessed, the redressing of the extreme racial imbalance in landholding and the alleviation of poverty in rural areas. Official government policy since 1994 has combined all three objectives, but there has been a discernible shift in emphasis over the years, from meeting the basic needs of the very poor to promoting black commercial farmers.
The RDP of 1994 offered a radical vision of land reform and, although repeated reference was made to poverty in South Africa, the links between the two were weak. The clearest statement on the need for land reform was in section 2.4.2: “A national land reform programme is the central and driving force of a programme of rural development. Such a programme aims to address effectively the injustices of forced removals and the historical denial of access to land. It aims to ensure security of tenure for rural dwellers. And in implementing the national land reform programme, and through the provision of support services, the democratic government will build the economy by generating large-scale employment, increasing rural incomes and eliminating overcrowding”.
An ambitious aim was then set out in section 2.4.14: “The programme must aim to redistribute 30 per cent of agricultural land within the first five years of the programme”.
The White Paper on South African Land Policy published by the Department of Land Affairs in 1997, built on the RDP and an extensive programme of public consultation and commissioned research, and provides the most detailed official elaboration of the economic arguments for land reform and the link to poverty alleviation. Most references to poverty in the White Paper are little more than unsupported assertions – such as that ‘Land reform can make a significant contribution to the alleviation of poverty and injustice caused by past apartheid policies, but a more detailed case is set out under the heading Economic arguments for land reform (Section 2.5.3). From a poverty point of view, the most important arguments presented deal with household food security, expansion of smallholder agriculture and job creation.
According to Rural Development Strategy of the Government of National Unity, October 1995, Land reform can make a major contribution towards addressing unemployment, particularly in rural areas and small towns: In rural areas, the rate of unemployment ranges from 40% among poor households to 58% among the poorest. This situation could deteriorate further as the number of young people entering the work force increases by over 2% every year. Because the direct and indirect costs of creating jobs in urban areas are very high, innovative strategies are needed to help rural people find work where they live. It is generally accepted that per unit investment in agriculture and services has the potential to create many livelihoods. In international experience, an area of high potential arable farm land normally produces considerably more livelihoods, if divided into small family-operated farms. This also applies to off farm employment through the multiplier effect on the local economy. Therefore, redistributive land reform and the provision of support services are central to the government’s employment strategy and to reducing the mounting cost of the welfare budget.
