South Africa

Abstract

A cornerstone of the partnership between South Africa and the World Bank Group is knowledge development and exchange.The Social Assistance Programs and Systems Review for South Africa generates knowledge not only for South Africa in its endeavors to strengthen its social protection system, but also for other countries in the world to learn from one of South Africa's most important post-Apartheid policy successes, that is, protecting the poorest segments of its population.This Social Assistance Programs and Systems Review takes stock of the current performance of South Africa's social assistance policies, programs and systems, and their appropriateness in the face of the poverty and vulnerability profi le of the country.To be eff ective, social protection systems need to be tailored to the social, economic, fi scal and policy context of a country, which may change over time.Poverty and inequality, including pockets of deep deprivation, remain two of South Africa's most pressing concerns.Alongside extreme inequalities, South Africa struggles with high unemployment and low labour market participation rates.In this context, social assistance is a critical policy response and represents one of South Africa's important successes in the postapartheid era.South Africa's social assistance system is an eff ective intervention for providing support to the poorest segments of the population.Social grants provide resources to poor households which, at the very least, signifi cantly reduces the depth of poverty and inequality.Further, by providing regular and dependable income, they ameliorate vulnerability.This is particularly true if the eff ects of social grants on other outcomes such as health, education, and labour supply are considered.The system is extensive in terms of both the number of people it covers, directly and indirectly, as well as in terms of the amount of scarce resources it consumes.Approximately one in three South Africans is a direct benefi ciary of a social grant, while nearly two-thirds of the population (64.0 percent) are either direct or indirect benefi ciaries of the system.Evidence shows that social assistance transfers have signifi cant positive impacts on reducing poverty and inequality in South Africa and boosting development outcomes.This review highlights, that in the medium term, there is an opportunity for the social assistance system in South Africa to link benefi ciaries to other Government services and programs that help advance access to the labour market and earnings.South Africa spends more on social assistance than most other countries globally -3.31 percent of Gross Domestic Product (GDP).Yet, social assistance is not available for a large share of the working-age members of the population and unemployment benefi ts are only available for those who work in the formal sector.The social assistance system may also benefi t from greater integration of technologybased solutions in the application, eligibility testing, and payment processes, as well as from addressing the fragmentation of the social assistance system at the institutional level.It is my sincere hope that the analysis of this report will be helpful not only for the next steps in South Africa's quest to strengthen social protection systems and sustain its commitment to protecting vulnerable groups, but also for other countries, especially when the COVID-19 pandemic has been testing the eff ectiveness of existing social assistance systems, generally.

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