CHAPTER ONE

SOCIO-ECONOMIC REPORT

ECONOMIC INDICATORS

This section covers major trends in the South African Economy. It shows that while the economy is on the path of recovery, the growth rate and levels of investment are too low to absorb the high number of the unemployed and new entrants into the labour market. This section also shows the continuing decline in employment in the formal non-agricultural sector. It further covers the inequalities in the labour market, labour costs and productivity, amongst other economic indicators.

ECONOMIC GROWTH

Source: South African Reserve Bank (SARB) (2001) Quarterly Bulletin. March

The total value of goods and services produced in the economy (Gross Domestic Product) increased from an annual rate of 1.9% in 1999 to 3.1% in 2000. This is the highest annual growth rate since 1996. The recovery of the economy began in the 4^th quarter of 1998. The trend continued throughout 2000 and was particularly noticeable in the 3^rd quarter of the year when the economy grew at an annualised rate of 3.9% before it slowed down to 3.3% in the fourth quarter due to lower agricultural output growth.

Figure 2 shows the value-added by sector to GDP. The contribution of the tertiary sector reflects the growing importance of this sector in the economy.

Source: SARB (2001) Quarterly Bulletin. March.

The growth recorded in 2000 can be attributed to factors such as a 5% expansion of real value added by the commercial sector, 4% by the agriculture sector, and 3.5% by the manufacturing sector. In contrast, the financial services sector slowed down from a 6.5% expansion in 1999 to 5% in 2000. The mining sector declined by 2% compared to a 1% decline in 1999.

TRADE

Trade has assumed an increased significance in the South African economy as it has in most economies worldwide. As a percentage of gross domestic product (GDP) and gross domestic expenditure (GDE), trade has experienced steady growth since the early 1990s. Merchandise exports as a percentage of GDP increased by 7% between 1991 and 2000, from 12.2% to 19.2%. In the same period, merchandise imports as a percentage of GDE increased by 7.3%, from 12.6% to 19.9%.

Source: SARB (2001) Quarterly Bulletin. March.

 

Europe continued to be South Africa's major trading partner accounting for 30% and 43% of total exports and imports respectively although Africa is growing in importance as an export destination, accounting for 13% of total exports in 2000.

Table 1: South Africa's Trading Partners by Region, 1999 - 2000

Region	Share of total Exports (%) 1999...................................... 2000		Share of Total Imports (%) 1999....................................2000
Africa	13.6	13.4	3.2	2.9
Europe	32.2	29.7	46.2	43.3
America	9.5	10.5	16.7	15.1
Asia	19.0	17.9	31.4	35.9
Oceania	1.7	1.7	2.4	2.7

Source: South Africa Revenue Service (2001)

South Africa's exports continued to be dominated by the primary sector, especially minerals, with more than 40% of total exports in 2000 being accounted for by mineral products, precious and semi-precious stones and base metals. In contrast, machinery and mechanical appliances accounted for the majority of its imports in 2000, as in 1999.

The continued dependence of exports on minerals not only subjects South Africa to the fluctuation of international commodity prices but also limits its ability to compete in the global economy. Improving South Africa's competitiveness would, to a large extent, depend on diversification of its exports to more value-added products.

Source: South African Revenue Service (2001)

INFLATION

Inflation targeting was introduced in February 2000 by the Reserve Bank as an overriding objective of its monetary policy. The aim is to reduce the inflation rate and maintain price stability. The Reserve Bank aimed to achieve a CPIX target of between 3 and 6 percent by 2002.

In the fiscal year under consideration, April 2000 to March 2001, however, the Consumer Price Index excluding interest rates on mortgage bonds (CPIX) for metropolitan and other urban areas was 7.8%, an increase of 4.0% from the 1999/2000 financial year, when it was 3.8%. Measured from quarter to quarter, CPIX inflation increased from 7.8% in the second quarter to 8.0% in the third quarter of 2000 before a reversal of this trend in the last quarter (7.8%). The downward trend continued in the first quarter of 2001 when CPIX inflation declined to 7.6%.

Source: Statistics South Africa (2001) Statistical Releases. P0141.1. April.

The upward trend in CPIX inflation until August 2000 was primarily due to higher food prices (due to the damage to agricultural products from floods), the rise in housing costs, and a rise in transport prices owing to the increase in world crude oil prices. Since then the contribution of food prices to overall CPIX inflation has declined rapidly from 1.9 percent in August 2000 to 1 percent in March 2001 while transport cost contribution to overall CPIX declined from 1.7% in August 2000 to 1.4% in January 2001 before rising to 1.8% in February and March 2001. Housing cost contribution to overall CPIX inflation marginally increased from 1.4% in August 2000 to 1.5% in March 2001. The weakening of the rand and the resultant increase in the prices of imports also contributed to the CPIX inflation of 7.8% in 2000.

EXCHANGE RATE

Figure 6: Rand to Dollar Exchange Rate

Source: SARB (2000) Quarterly Bulletin. December

Since the relaxation of exchange control six years ago (February 1995) the value of the rand has declined by 35% on the nominal effective exchange rate, or an annual average of 7%. This is slightly more than the average inflation rate of approximately 5%. The value of the rand has fluctuated but maintained a downward trend in relation to the US dollar, depreciating rapidly then regaining some lost ground. It lost 8% of its value in five months between February and June 2000.

One major reason for this erratic movement is speculation on its value. Another is the volatility of the global financial market. For example, the 'Asian contagion" of 1998 resulted in a sharp decline of the value of the rand. Problems in neighbouring countries have been said to have contributed to the downward slide of the rand in 2000.

SHARE PRICES

Figure 7: Month to Month Share prices 1990 - 2000

Capital market: Share prices: Share prices (1995=100):

All classes of shares (Unit: Index: 1995=100 (Period))

[Source: SARB (2000) Quarterly Bulletin. December.

Figure 7 reflects the fluctuation of share prices on the JSE, which, in part, relates to fluctuations in the global financial market. For example, the impact of the "Asian contagion", earlier referred to in relation to the value of the rand, can be seen in the monthly average price level's fall of 39 per cent from May to September 1998. However, when conditions in the international financial markets subsequently settled down, the average monthly value of the all-share price index on the JSE increased by 41 per cent from September 1998 to June 1999 (SARB, 1999).

BLACK-CONTROLLED FIRMS ON THE JSE

Source: Business Map (2001) Database.

In the six years after the democratic elections, the number of black-controlled firms listed on the JSE increased from 11, with a market capitalisation of R4.6 billion to 36, with a market capitalisation of R61 billion (September 1995 to February 2000.) However, this increase should be considered in terms of the fact that the percentage of the JSE market capitalisation of black-controlled firms has remained very low. While over the years, the value of black-controlled firms on the JSE has been fairly volatile, in line with the JSE itself, it increased from 1% (R4.6 billion) of JSE total market capitalisation in September 1995 to 6.8% (R66 billion) in November 1998. It declined to 3.8% (R61 billion) in February 2000. These fluctuations in the market capitalisation of black-controlled firms on the JSE are captured in Figure 8.

INVESTMENT

For the South African economy to achieve a higher growth rate and create enough jobs to absorb the high number of the unemployed, as well as the new entrants into the labour market, it requires a much higher level of both domestic and foreign investment. However, as shown in Figure 9, the level of investment in the economy is still too low. In its macroeconomic policy, Growth, Employment and Redistribution (GEAR), the government projected that to achieve a 6% GDP growth rate and create 400 000 jobs annually by 2000, gross domestic investment as a percent of GDP would have to increase to 26%. At 14.9%, gross domestic investment is far below the target set in GEAR.

The level of foreign direct investment declined from R9.2 billion in 1999 to R6.1 billion in 2000. South African domiciled companies invested R3.9 billion in other countries in 2000 compared to R11.9 billion in 1999. Overall, there was a net inflow of R2.2 billion of foreign direct investment capital in 2000, compared with an outflow of R2.7 billion in 1999.

Portfolio investment into South Africa declined from R83.9 billion in 1999 to R11.8 billion in 2000. Overall, a net inflow of R52.4 billion shifted to an outflow of R13.8 billion in 2000.

The continued reliance on portfolio investment exposes the economy to the volatility of the global financial markets. While this is a sign of the liberalisation of the South African economy, one of the outcomes of the reliance on portfolio investment is the jobless growth that is currently being experienced.

Source: SARB (2001) Quarterly Bulletin. March.

SAVINGS

Source: SARB (2001) Quarterly Bulletin. March.

Gross savings as a percentage of GDP improved from 14.6% in 1999 to 15.2% in 2000. On a quarterly basis, the national saving rate improved from 15% in the third quarter to 15.7% in fourth quarter of 2000, partly due to government (dis)saving. However the national saving rate is still too low. The World Bank in its World Development Report 2000/2001, points out that the South African national saving rate is much lower than that of other emerging markets. In 1999 Mexico and Malaysia had gross saving rates of 23% and 45% respectively as a percentage of GDP. In contrast, South Africa's national saving rate in 1999 was 18%. The low saving rate reduces the amount of domestic capital available for investment and therefore contributes to the continued reliance of the South African economy on foreign investment. However, the low saving rate is also a consequence of the low economic growth rate of the country, the lack of disposable income of a large section of the population as well as the spending patterns of South African households.

HOUSEHOLD DEBT

Source: SARB (2001) Quarterly Bulletin. March

Real consumption expenditure by households grew at an annualised rate of about 3% in the first three quarters of 2000. The growth in household consumption expenditure may be attributed to higher real household incomes and a lower tax burden, which is due to the tax relief granted to taxpayers in the 2000/01 budget. Consumers, however, generally remained cautious of credit, preferring to use their additional income to reduce their debt burden. As a result, household debt as a percentage of disposal income fell from 56.9% in the second quarter of 1999 to 55.6% in the third quarter of 2000. The SARB notes in its Quarterly Bulletin (March 2001) that the incomes of households were also boosted by the rising profitability in the unincorporated business sector and through an increase in dividend receipts. Consequently, real disposable income of households rose by 3.5% in 2000, compared with 0.5% in 1999.

Over the years, households' consumption expenditure has being changing. On the one hand, household consumption expenditure on durable, semi-durable and non-durable goods has declined. On the other hand, consumption expenditure on services has risen. This is attributed to among others, the increasing households' expenditure that goes on cellular telephones and, more recently, on gambling and the national lottery.

GOVERNMENT EXPENDITURE

Government expenditure is an important tool that Governments utilise to allocate resources to meet the conflicting demands with which they are confronted. Fighting poverty is a major priority in the 2001 budget of South Africa. Accordingly, spending on social services, that is, education, health and welfare, housing and other social services accounts for 47.5% of total expenditure in 2000/01 and 46.7% in 2001/2002. Excluding spending on debt and contingency reserves, it accounted for 58.5% in 2000/01 and will slightly decrease to 57.5% in 2001/02. Between 2000/01 and 2001/02 expenditure on social services is expected to increase by 8.3%, whilst expenditure on defence and intelligence is projected to increase by 13.8% due to arms procurement.

Figure 12: Government Expenditure: 2000/2001 and 2001/2002

Source: National Treasury (2001) Budget Review.

Similarly, capital expenditure is expected to increase by 25.8% in the periodunder consideration, partly due to the increased focus by Government on infrastructural investment. Interest on debt is expected to decrease slightly from 19% of total government expenditure in 2000/01 to 18% in 2001/02. Education, which represents 21% of total government spending, is expected to rise to R58.5 billion in 2001/2002, while health and welfare spending is expected to increase to R61.3 billion in the same period.

Spending on infrastructure is expected to increase by R7.8 billion in the next three years. Education spending (inflation not factored in) is expected to rise by 7.8%, while health and welfare expenditure is expected to rise by 6.4% over the same period.

EMPLOYMENT

Figure 13

Source: Statistics South Africa (2000) Comparative Labour statistics. December.

According to Statistics South Africa in its most recent Survey of Total Employment and Earnings (STEE), employment in the formal non-agricultural business sector has been on the decline, a trend that began in the 1970s. As of December 2000, 4 678 528 persons were employed in the formal non-agricultural business sector. Compared to December 1999, this is a decline of 2.5 percent or 121 014 employees. On a quarterly basis, decreases were also recorded in 2000, as in previous years. Measured formal-sector employment declined by 0.1 percent or 6 890 employees between the third and fourth quarter of 2000. The job losses in 2000 occurred over a wide spectrum of economic sectors apart from the washing and dry-cleaning services sector and the transport, storage and communication sector, where modest increases in employment were recorded.

The quarterly decrease in employment has been attributed by Statistics South Africa to the following factors:

• Retrenchment of casual employees in the manufacturing industry,
• The resignation and retrenchment of employees in governmental institutions, and
• Resignations and the termination of part-time employees especially by universities, technikons and provincial departments.

On the whole however, more job losses were recorded in the public sector than the private sector, according to the South African Reserve Bank. Compared to the first three quarters of 1999, employment in the private sector declined by 2.2% in the first three quarters of 2000. In contrast, employment in the public sector declined by 3.9% in the same period. Between December 1999 and December 2000, employment in national government departments declined by 2.4%, in provincial governments by 2.8% and in local government by 0.7%.

The South African Reserve Bank (Quarterly Bulletin, March 2001) attributes the low labour absorption rate of the South African economy to the following factors, amongst others:

• The restructuring of South African firms since the beginning of the 1990s which has been aimed at enhancing the international competitiveness of domestic producers but which also had the negative effects of workers being laid-off;
• The preference for capital intensive over labour-intensive production processes;
• The introduction of new production technologies which have raised the demand for a small number of highly skilled workers but simultaneously reduced the demand for less-skilled and unskilled workers;
• The shift of the economy from primary and secondary sectors towards service sectors that are less reliant on large numbers of unskilled workers;
• The decline in the investment ratio which reduced the capacity of the economy to create new jobs, and
• The right-sizing of the public service

Source: Statistics South Africa (2001).

INEQUALITY IN THE SOUTH AFRICAN LABOUR MARKET

Racial and gender inequalities remain a major feature of the South African labour market. As illustrated in Figure 15, although African males constitute 38.75% of the total workforce, they only comprise 10.47% of management positions. In contrast, white males, while constituting 13.31% of the total workforce, occupy 51.84% of management positions. By gender, African males (10.47%) and African females (10.74%) have an almost equal representation in management unlike other race groups, where men have much higher representation than women. This shows that the perception that white males in particular and whites in general are being disadvantaged due to the implementation of affirmative action policy is not borne out by the facts.

Source: Department of Labour (2000) Employment Equity Report.

The annual income differences between directors and the lowest paid workers also reflect the inequality in the labour market. As shown in Figure 16, in 2000, the average annual income of an Executive Director was R1 739 285 compared to R20 251 for the lowest paid worker. Between 1997 and 2000, the average total remuneration of Executive Directors increased by 139% compared with a 19% increase for the lowest paid workers. Because of these income disparities, South Africa's labour market remains one of the most unequal in the world.

Figure 16:

Source: Labour Research Service (2001). Bargaining Indicators.

LABOUR COSTS AND PRODUCTIVITY

Nominal compensation per worker in the formal non-agricultural sector slowed down to 6.9% in 1999 from 14% in 1998. This slowdown in nominal wage growth was seen both in the public sector (4.5%) and the private sector (9.1%). However, private sector remuneration growth increased from a year-on-year rate of 8% in the fourth quarter of 1999 to 8.4% in the third quarter of 2000 while public sector remuneration growth rose from an increase of 2% to 6% in the same period.

Source: SARB

Labour productivity or output per worker in the formal non-agricultural sector of the economy grew by 4% in 1999 compared with rates of increase of 5% in 1998 and 4.3% in 1997. Due to the continued decline in employment, labour productivity increased at year-on-year rates of 5.4% in the fourth quarter of 1999 and 5.9% in the third quarter of 2000.

The decline in employment levels and the use of new technologies are some of the factors to which the higher growth in productivity over the past years is attributed.

Over the past three years, nominal unit labour cost, which is the ratio of nominal compensation per worker to output per worker has been on the decline. As a result of the robust growth in labour productivity, the growth in unit labour cost was compressed to 1.5% when comparing the first three quarters of 2000 with the first three quarters of 1999.

WORKDAYS LOST

Source: Andrew Levy and Associates (2001)

Figure 17 shows that in 2000, strike action and work stoppages were at their lowest level in ten years. Workdays lost due to strike action and work stoppages fell to 500 000 in 2000 from 3.1 million in 1999. It is important to note, however, that this figure excludes the 900 000 work-days lost in 2000 due to socio-economic stayaway action protesting continued job losses in the formal sector and calling for the amendment of the Labour Relations Act and Insolvency Act.

Of the 500 000 workdays lost in 2000, 75.2% of workdays lost were due to strike action over wages, 20.5% were due to strikes over grievances, 3.7% were over dismissals/discipline, 0.4% due to union recognition and 0.1% due to retrenchments.

LABOUR DISPUTES

Source: CCMA

The new labour regime has resulted in the creation of a number of institutions that are related to the regulation of the labour market. One of such institutions is the Commission for Conciliation, Mediation and Arbitration (CCMA). It processes labour disputes between employers and employees through conciliation, mediation and arbitration.

Dismissal disputes constituted the highest percentage of its total caseload. These accounted for 77% and 80% of its total caseload in 1998/99 and 1999/2000 respectively.

SOCIAL DEVELOPMENT INDICATORS

This section covers major social development indicators such as housing, access to basic social services, to health care, telephones, electricity and water. It shows that since the democratic election in 1994, more people have enjoyed access to these social services. In spite of this, however, South Africa is still faced with major challenges, with the HIV-AIDS epidemic being one of the most potent threats to South Africa's development prospects.

HOUSING AND ACCESS TO BASIC SOCIAL SERVICES

Housing is one of the major social and development problems in South Africa. By 1990, the housing backlog was put at a conservative estimate of three million units (African National Congress, 1994). At the time of the 1996 Census, 1.5 million of the estimated 9.1 million households lived in informal dwellings/shacks. Ninety-five percent of those that lived in shacks were African people. While the total number of households increased to 10.7 million by October 1999 (Stats SA, OHS 1999) the number of households living in shacks decreased to 1.3million. Given the dire housing crisis, housing delivery has become one of the major developmental priorities of the democratic government.

Accordingly, between April 1994 and January 2001, 1.3 million housing subsidies were approved by the Government. During the same time period, according to the Department of Housing (2001), 1 138 313 houses were completed or under construction. The largest numbers of these houses (28%) were completed in 1997/98, followed by 22% in 1999/2000 and 20% in 1998/99. The decline in the number of households living in shacks may be attributed to the implementation of the Government's housing programme.

Similarly, as part of the Government's commitment to extend social services to majority of South Africans, there has been an increase in the percentage of households that have access to running water in the dwelling or site. This increased from 62.2% in 1996 to 65.9% in 1999. The percentage of households that have access to electricity increased from 62.1% in 1996 to 69.7% in 1999. For African households, access to water in dwellings or on site increased from 47.6% in 1996 to 55.3% in 1999, and electricity as a main source of lighting increased from 47.6% to 60.8% in the same period. It should be noted that in 1999, wood remained the main energy source for cooking in 18.7% of households and for heating in 21.8% of households. An overwhelming majority of these were African households.

Despite the increase in delivery to rural areas, there is still a significant imbalance between urban and non-urban households with regards to basic services. In 1996, 86.9% of urban households had access to water in the dwelling or site, increasing to 88.8% in 1999. In contrast, in 1996, 25.4% of non-urban households had access to water in the dwelling or site and this increased to 31.2% in 1999. The same pattern is repeated in urban and non-urban households with respect to access to electricity.

Source: Statistics South Africa, OHS 1999

TELEPHONES

Figure 21: % of Households with Telephone in Dwellings/ Use of Cellular Phone, 1998 and 1999

Source: Statistics South Africa, OHS 1998 and 1999

Most South African households are not connected to telephone, either by fixed line or via cellular phones. Of the 10.7 million households in South Africa, only 33.7% had telephones in their dwellings or used cellular phones in 1999. This had increased from 29.6% of households in 1998. There are, however, variations in terms of connectivity by race. Compared to 87.8% of white households with access to telephones, either by fixed line or cellular phones, only 19.4% African households had access to telephones by fixed line or cellular phones in 1999 (Stats SA OHS 1999). This demonstrates the way in which racial inequality in South Africa permeates all aspects of life.

EDUCATION

Education is one of the main indicators used to assess a country's level of development. Access to education is a major instrument to eradicate inequalities. It should also provide the skills needed in any economy, especially to enhance its competitiveness in the global economy. In 1999 South African universities and technikons produced 95 102 graduates on a head count enrolment base of 585,200 students. In other words, graduates as a percentage of head count enrolments were 16% in 1999. Fifteen percent of the enrolments were in teaching programmes, 35% in other humanities, 25% in business and management studies and another 25% in the natural sciences.

Source: Department of Education (2001)

The skewed pattern of students' enrolment in favour of the humanities shows that the universities and technikons are not responsive to the labour market that increasingly requires people skilled in business and management and Science, Engineering and Technology (SET). As the Human Science Research Council shows in its report, Skills Needs of the SA Labour markets 1998 - 2003, very high-growth (40% +) in demand is expected for chartered accountants and IT professionals between 1998 and 2003. In the same period, high-growth (15% - 40%) is expected in the demand for electrical engineers, chemical engineers, actuarial as well as mathematical and related occupations, accountants and other financial and economic related occupations. Moderately high growth (10% - 15%) in demand for medical practitioners and specialists is expected in the private sector. In contrast, low to moderate growth (0% - 10%) in demand for teachers is expected. Humanities related professions such as social workers will experience a growth in demand of less than 5%.

To meet the needs of the labour market would require that universities and technikons increase the numbers of graduates and diplomates in management, business and SET fields.

MEDICAL SERVICES

In 1999, 48% of households that consulted a health worker used public sector medical services compared to 45% that used private sector medical services. The other 7% did not specify the type of medical facilities they consulted. African households constituted the vast majority (80%) of those that used public sector medical facilities. Of white households, 77% used private medical facilities compared to 36% of Coloured households, 38% of African households and 59% of Indian households. The majority of individuals (84%) that visited a medical facility in 1999 had no medical aid coverage.

Source: Statistics South Africa, OHS 1999.

HIV AND AIDS

The HIV and AIDS epidemic is regarded as one of the major threats to South African political and socio-economic development prospects. Its toll of debilitating illness, widespread and indiscriminate death and deteriorating quality of life and life expectancy, threatens to reverse the hard won social and economic gains made since the democratic elections in 1994. Its negative effects have the potential to undermine South Africa's ability to compete in the global economy.

The spread of HIV increased dramatically in the last decade. Extrapolating from its study on HIV prevalence among women attending antenatal clinics, the Department of Health estimates that HIV prevalence among South Africans increased from 0.7% in 1990 to 24.5% in 2000 (see Figure 24). As a proxy indicator for the prevalence of the epidemic in the general population, the Department concluded that 4.7 million people in South Africa were infected with HIV in 2000 (Note: this data has a high confidence limit and should therefore be interpreted with caution). In effect, 13% of the 36 million people living with HIV globally, live in South Africa.

Source: Department of Health

PREVENTABLE DISEASES

In spite of the various government initiatives to extend medical care to all South Africans, preventable diseases such as malaria, cholera and tuberculosis remain a major public health threat in the country.

Source: Department of Health (2000)

Reported TB cases in South Africa have dramatically increased over the past 6 years. As shown in Figure 25, TB cases more than doubled from 73 917 cases in 1995 to 150 696 in 2000. The HIV and AIDS epidemic further compound the prominence of tuberculosis and the proportion of TB patients co-infected with the HIV is said to be increasing. South Africa is currently one of the twenty two countries with the highest rates of TB in the world. The spread of tuberculosis has dire consequences for South Africa's development prospects, as those mostly affected are the economically active age group. In 1999, 86.6% of all TB patients were those between the age of 20 -59 years.

Similarly, reported malaria cases more than doubled between 1997/98 and 1999/2000 seasons, from 24 325 in 1997/98 to 61 877 in 1999/2000, with KwaZulu-Natal accounting for 66% of the cases in 1999/2000. Reported deaths from malaria increased from 170 in 1997/98 to 474 in 1999/2000.

There has been a rise in reported cases of cholera, from 2 cases in 1995 to 31 in 1998, a 1 450% increase. In 2000 and 2001 there has been an outbreak of cholera with 70 473 cases recorded between 15 August 2000 and 13 March 2001. The number of these cases that resulted in death was 149. The low fatality rate is attributed to effective interventions by the Government (Department of Health, 2001).

INFANT MORTALITY RATE

Infant mortality is one of the main indicators to assess the health performance as well as the level of development of a country. As of 1998, South Africa's infant mortality rate was 45 per 1 000 live births. There is, however, significant variation between provinces as shown in Figure 26.

Source: South African Health Review (2000)

POVERTY RELIEF AND THE IMPLEMENTATION OF PRESIDENTIAL JOBS SUMMIT AGREEMENTS

Table 2: Poverty Relief and Jobs Summit Allocations

R million	2001/02	2002/03	2003/04
Agriculture: Landcare; Food Security programme	35	35	50
Arts, Culture, Science and Technology: Agricultural production and processing; investing in culture	55	48	68
Education: Adult basic education and training; Rural school building programme	73	74	114
Environmental Affairs and Tourism: Integrated Waste Management Campaign; Local tourism infrastructure; Tourism product development; Coastal development; SDI projects.	175	240	300
Health: Nutrition and Household food security projects	10	12	15
Housing: Rental Housing project	75	75	-
Labour: Social plan technical support facility; employment services; Skills development.	10
Provincial and Local Government Affairs: Social plan implementation; Local Economic Development Fund	79	102	120
Public Works: Community based public works	274	274	274
Social Development projects	50	100	71
Sport and Recreation facilities	40	90	130
Transport: Road upgrading and maintenance	94	100	100
Water Affairs and Forestry: working for Water, Community water supply and sanitation; SDI projects	410	350	330
Short-term funding	120	-	-
Total available	1 500	1500	1568

Source: National Treasury (2001)

The Government has provided funding for special poverty relief and the implementation of the recommendations of the Presidential Jobs Summit. From the initial allocation of R1 billion in 1999/00, it is expected to increase to R1.6 billion in 2003/04.

Although there has been no systematic monitoring of the Presidential Jobs Summit Agreements (PJSA) until recently, existing data shows that the implementation of various programmes under the PJSA, have started to yield modest results. As part of the special groups programme, 9 792 women,

9 569 youth and 471 people with disabilities have been employed. 65 826 people have been employed in the Community Based Public Work Programme. It is expected that 1 786 jobs will be created under the Land Care Campaign with 320 educators and 80 facilitators to be trained.

As part of its contribution to job creation, organised labour has set up a Job Creation Trust. The Trust has collected over R80 million and it is currently evaluating 3 154 job-creating projects for financing. Similarly, the Business Trust has been set up by organised business. It is currently implementing various programmes to enhance the skills base of the workforce and to create jobs. Towards this end, it has set up the Learning Project in all of the 9 provinces with 500 schools participating. 959 schools are currently participating in its repeater reduction programme. Similarly, it has trained 25 college managers abroad and another 600 senior managers and counsellors under its College Collaboration Fund.

WELFARE PAYMENTS

Figure 27: Distribution of Social Welfare Grants

Source: Haroon Bhorat (2000)

Direct income transfer by the Government is part of its poverty alleviation strategy and it is a main source of income for 2.9 million South Africans who are the beneficiaries of the various welfare grants. Old age pensioners accounted for 1.9 million of the total beneficiaries representing 63% of the Department of Welfare (DoW) total transfer expenditure. The second most important transfer scheme is the disability grant that reaches 0.6 million individuals and accounts for 26% of the DoW's transfer expenditure. In other words, almost 90% of the transfer expenditure is accounted for by two types of payment, the old age pension and the disability grant. The monthly value of the old age grant is R549 per pensioner and disability grant is R685 per beneficiary.

It should be noted that while these transfers are allocated to individuals, they are generally relied upon by multiple beneficiaries at the household level. About 36.6% of the unemployed is in a household where there is at least one recipient of an income transfer. The government income grant is therefore a social safety net for a large number of the unemployed.