S.Africa’s poverty figures on a decline - CNBC Africa

S.Africa’s poverty figures on a decline

Southern Africa

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A corrugated iron house. PHOTO: Getty Images

According to the report, entitled ‘Poverty Trends in South Africa’, more than half of the population of South Africa, at 57.2 per cent, were living in poverty in 2006. Despite a marginal decline to 56.8 per cent in 2009, and by less than half by 45.5 per cent in 2011, the downswing nonetheless indicates a 20 per cent reduction in poverty from 2006 to 2011.

(READ MORE: S.Africa a growing success story 20 years later)

“We can see the dramatic impact the global financial crisis of 2008 to 2009 has had on the livelihoods of South Africa's poorest. The number of people living below the food line increased to 15.8 million in 2009 from 12.6 million in 2006,” Statistics South Africa said in the report.

“[This was] before dropping to 10.2 million people in 2011. Despite this adverse impact of the financial crisis, poverty levels did noticeably improve according to 2011 estimates.”

Household expenditure for poor and non-poor households for the period under review also indicated significant change. In 2011, the average household size of non-poor households was recorded at 3.1, significantly smaller than that of poor households at 1.5.

Poor households were however more likely to own their dwellings than non-poor households, though this is influenced by the type of dwelling likely to be owned.

“Another important factor influencing the decrease in poverty levels is strong income growth in households. Between 2006 and 2011, households recorded a 16.7 per cent real increase in income,” the report added.

“This adds to the increasing evidence that a strong middle class is emerging in South Africa.”

While household income is on the rise, South Africans are nonetheless growing more dependent on debt as a means of increasing spending power, with credit granted nearly doubling from 53.6 billion rand in the third quarter of 2009 to 98.9 billion rand between 2010 and 2011.

(READ MORE: Credit amnesty could increase S.African consumer debt)

“This expansion of credit since 2009 has mainly come in the form of unsecure lending. It is important to note that while household spending was boosted by this credit extension (resulting in lower poverty levels), it does also pose a risk for many households should they default on their loans,” said Statistics South Africa.  

“Households which have graduated out of poverty by 2011 could easily slip back below the poverty line if their debt situation becomes unsustainable.”