Volume II - The Northern Cape Provincial Spatial Development ...
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Volume II - The Northern Cape Provincial Spatial Development ... Volume II - The Northern Cape Provincial Spatial Development ...

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Northern Cape PSDF Volume 2 E.2.2 INCOME LEVELS IN THE NORTHERN CAPE Office of the Premier & Department of Rural Development & Land Reform 86 December 2011 Extreme inequality in the distribution of income exists among racial groups and households. The poorest 44, 7% of households in the Northern Cape earn less than 9, 8% of the income. Unequal income distribution has severely hampered development, particularly that of people in the rural areas who are generally poorer than their urban counterparts. The LED Strategy states that two thirds of households (66.6%) in the Northern Cape earned less than R3 200 per month (poverty level indicated by red line), and thus the province is regarded as poor (refer to Table E.13). Table E.13: Percentage of the monthly household income in the Northern Cape Province, 2007 (Source: Global Insight, 2009 as cited in the PGDS). No income R1 –R400 R401‐R800 R801‐R1 600 R1 601‐R3 200 R3 201‐R6 400 R6 401‐ R12 800 R12 801‐ R25 600 R25 601‐ R51 200 R51 201‐ R101 400 R102 401‐ R204 800 7.8% 4.1% 9.0% 23.1% 22.6% 15.1% 9.2% 5.4% 2.6% 0.7% 0.3% 0.3% R204 801 or more Furthermore, from the table above, it is evident that approximately 7.8% of households earn no income, and 24.3% of households earn less than R12 800 per month. This is a clear indication that poverty and inequality are massive problems in the Northern Cape. Approximately 0.6% of households earn more than R101 401 monthly or approximately R1 228 801 annually. As stated in the LED Strategy, this low income level profile has severe social consequences on the total population. Problems arise that households in the province are not able to pay school fees, can’t afford everyday necessities, and can’t afford proper medical care and education, etc. As illustrated in the table below approximately 45.25% of the total population did not have any monthly income at all, and approximately 39.5% have a monthly income of less than R3 200. It is also evident that the John Taolo Gaetsewe and Frances Baard are the districts with the highest Percentage of households with no income at 48.11% and 48.19% respectively. Table E.14: Average monthly household income in the Northern Cape, 2007 (Source: PGDS). INDIVIDUAL INCOME % JOHN TAOLO GAETSEWE % NAMAQUA % PIXLEY KA SEME % SIYANDA % FRANCES BAARD % TOTAL No income 48.11% 40.89% 41.14% 43.93% 48.19% 45.25% R1‐R400 22.58% 12.03% 15.15% 11.28% 12.47% 14.24% R401‐R800 3.86% 6.00% 7.83% 8.42% 5.49% 6.31% R801‐R1 600 11.96% 16.99% 15.74% 15.50% 14.89% 14.92% R1 601‐R3 200 3.01% 5.08% 3.22% 4.49% 4.23% 4.03% R3 201‐R 6 400 3.04% 5.74% 3.11% 4.05% 4.44% 4.07% R6 401‐R12 800 2.19% 3.81% 2.35% 2.43% 4.07% 3.09% R12 801‐R25 600 0.74% 1.25% 0.69% 0.84% 1.73% 1.15% R25 601‐R51 200 0.13% 0.28% 0.30% 0.24% 0.67% 0.38% R51 201‐R102 400 0.22% 0.10% 0.16% 0.14% 0.11% 0.14% R102 401‐R204 800 0.21% 0.03% 0.13% 0.06% 0.08% 0.10% R204 801 or more 0.07% 0.02% 0.02% 0.05% 0.05% 0.05% Response not given 3.88% 7.79% 10.16% 8.57% 3.59% 6.29% Total 100% 100% 100% 100% 100% 100% Dennis Moss Partnership

Northern Cape PSDF Volume 2 E.2.3 SOCIAL GRANTS RECEIVED Stellenbosch Economic Working Papers: 15/10. Office of the Premier & Department of Rural Development & Land Reform 87 December 2011 Grants have been playing an important role in redistributing wealth in South Africa and proven to be successful in reducing some of the income inequality. Grants soften the effects of poverty by improving children’s health, reducing malnutrition, and enabling better access to schooling, among other benefits 22 . Social grants are important sources of income for poor households, especially in rural areas. They contribute up to 50% of income in households headed by the elderly and prevent many such households from falling into poverty (Van der Berg et al 2009) 23 . With 66.6% of households in Northern Cape earning less than R3 200, it is imperative that social grants be effectively implemented among the poor. According to Botes (2011), social security interventions will continue to be up‐scaled in the Northern Cape, because the government has extended Child Support Grant to 18 years of age, and because of the population paradigm which indicates that the Northern Cape is experiencing an increasingly ageing population. The demographic indicators used for the Millennium Development Goals for lifting people out of poverty shows an increase in the number of children receiving grants from 101 728 in 2005 to 245 486 in 2010 out of an estimated number of 327 541 children in the Northern Cape. The number of foster care grants increased from 8 835 in 2007 to 10 238 in 2010. The care dependency grant increased from 2 852 in 2007 to 3 883 in 2010, whilst the child support grant now covers all eligible children born after 31 December 1993 until the child reaches the age of 18 years. Botes (2011) states when looking at the provincial population benefiting from social assistance, the Old Age grant represents 17%, Disability grant represents 13% and the Child Support grant represents 64% of the total. Child grants are but one way of addressing child poverty by embracing the survival needs of children. Addressing child poverty holistically requires interventions that achieve results of survival, protection, development and participation. According to the LED Strategy approximately 27.9% of the Northern Cape received social grants in 2007 with child support (48.9%) getting the largest portion followed by old age grants (22.6%) and physical disabilities (16.6%). Refer to the table below that indicates the social grants received in South Africa and in the Northern Cape in 2007: Table E.15: Social Grants received in South Africa and the Northern Cape, 2007 (Source: Global Insight, 2009 as cited in the PGDS). SOCIAL GRANT SOUTH AFRICA (NUMBER OF PERSONS) AS % OF SOUTH AFRICAN POPULATION NORTHERN CAPE (NUMBER OF PERSONS) AS % OF NORTHERN CAPE POPULATION Old age pension 2 367 320 4.9% 61 985 6.3% Disability grant 1 186 493 2.5% 45 264 4.6% Child support grant 7 192 926 15.0% 133 632 13.6% Care dependency grant 182 365 0.4% 5 598 0.6% Foster care grant 23 185 0.0% 914 0.1% Grant in aid 102 322 0.2% 2 764 0.3% Social relief 39 645 0.1% 1 031 0.1% Multiple social grants 56 147 0.1% 1 914 0.2% Institutions 651 769 1.4% 20 423 2.1% TOTAL 11 802 173 24.7% 273 436 27.9% 22 http://ipsnews.net/news.asp?idnews=50402 – 20 September 2011. 23 Van der Berg, S. Siebrits, K. and Lekezwa, B. 2009: Efficiency and equity effects of social grants in South Africa. Dennis Moss Partnership

<strong>Northern</strong> <strong>Cape</strong> PSDF<br />

<strong>Volume</strong> 2<br />

E.2.2 INCOME LEVELS IN THE NORTHERN CAPE<br />

Office of the Premier &<br />

Department of Rural <strong>Development</strong> & Land Reform<br />

86<br />

December 2011<br />

Extreme inequality in the distribution of income exists among racial groups and households. <strong>The</strong><br />

poorest 44, 7% of households in the <strong>Northern</strong> <strong>Cape</strong> earn less than 9, 8% of the income. Unequal<br />

income distribution has severely hampered development, particularly that of people in the rural<br />

areas who are generally poorer than their urban counterparts. <strong>The</strong> LED Strategy states that two<br />

thirds of households (66.6%) in the <strong>Northern</strong> <strong>Cape</strong> earned less than R3 200 per month (poverty<br />

level indicated by red line), and thus the province is regarded as poor (refer to Table E.13).<br />

Table E.13: Percentage of the monthly household income in the <strong>Northern</strong> <strong>Cape</strong> Province, 2007<br />

(Source: Global Insight, 2009 as cited in the PGDS).<br />

No income<br />

R1 –R400<br />

R401‐R800<br />

R801‐R1<br />

600<br />

R1 601‐R3<br />

200<br />

R3 201‐R6<br />

400<br />

R6 401‐<br />

R12 800<br />

R12 801‐<br />

R25 600<br />

R25 601‐<br />

R51 200<br />

R51 201‐<br />

R101 400<br />

R102 401‐<br />

R204 800<br />

7.8% 4.1% 9.0% 23.1% 22.6% 15.1% 9.2% 5.4% 2.6% 0.7% 0.3% 0.3%<br />

R204 801<br />

or more<br />

Furthermore, from the table above, it is evident that approximately 7.8% of households earn no<br />

income, and 24.3% of households earn less than R12 800 per month. This is a clear indication that<br />

poverty and inequality are massive problems in the <strong>Northern</strong> <strong>Cape</strong>. Approximately 0.6% of<br />

households earn more than R101 401 monthly or approximately R1 228 801 annually. As stated in<br />

the LED Strategy, this low income level profile has severe social consequences on the total<br />

population. Problems arise that households in the province are not able to pay school fees, can’t<br />

afford everyday necessities, and can’t afford proper medical care and education, etc.<br />

As illustrated in the table below approximately 45.25% of the total population did not have any<br />

monthly income at all, and approximately 39.5% have a monthly income of less than R3 200. It is<br />

also evident that the John Taolo Gaetsewe and Frances Baard are the districts with the highest<br />

Percentage of households with no income at 48.11% and 48.19% respectively.<br />

Table E.14: Average monthly household income in the <strong>Northern</strong> <strong>Cape</strong>, 2007 (Source: PGDS).<br />

INDIVIDUAL<br />

INCOME<br />

%<br />

JOHN<br />

TAOLO<br />

GAETSEWE<br />

%<br />

NAMAQUA<br />

%<br />

PIXLEY KA<br />

SEME<br />

%<br />

SIYANDA<br />

%<br />

FRANCES<br />

BAARD<br />

%<br />

TOTAL<br />

No income 48.11% 40.89% 41.14% 43.93% 48.19% 45.25%<br />

R1‐R400 22.58% 12.03% 15.15% 11.28% 12.47% 14.24%<br />

R401‐R800 3.86% 6.00% 7.83% 8.42% 5.49% 6.31%<br />

R801‐R1 600 11.96% 16.99% 15.74% 15.50% 14.89% 14.92%<br />

R1 601‐R3 200 3.01% 5.08% 3.22% 4.49% 4.23% 4.03%<br />

R3 201‐R 6 400 3.04% 5.74% 3.11% 4.05% 4.44% 4.07%<br />

R6 401‐R12 800 2.19% 3.81% 2.35% 2.43% 4.07% 3.09%<br />

R12 801‐R25 600 0.74% 1.25% 0.69% 0.84% 1.73% 1.15%<br />

R25 601‐R51 200 0.13% 0.28% 0.30% 0.24% 0.67% 0.38%<br />

R51 201‐R102 400 0.22% 0.10% 0.16% 0.14% 0.11% 0.14%<br />

R102 401‐R204 800 0.21% 0.03% 0.13% 0.06% 0.08% 0.10%<br />

R204 801 or more 0.07% 0.02% 0.02% 0.05% 0.05% 0.05%<br />

Response not given 3.88% 7.79% 10.16% 8.57% 3.59% 6.29%<br />

Total 100% 100% 100% 100% 100% 100%<br />

Dennis Moss Partnership

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