Welfare State? Concerns grow over South Africa's unsustainable rising dependence on social grants
Economic challenges and the future of social grants in South Africa
Image: Tracy Adams
Social relief of distress, or social grants, is a key part of South Africa's welfare system; however, recent data indicates that its role is increasingly strained, raising concerns about sustainability, economic growth, and social cohesion.
According to the latest General Household Survey released by Statistics South Africa (Stats SA), an unprecedented 40.1% of the population - approximately 25.4 million individuals-now rely on social grants.
This marks a significant increase from previous years and reflects a steady rise in dependence, particularly amid persistent unemployment and economic challenges.
Risenga Maluleke, Statistician-General of South Africa, noted that the country's official unemployment rate hit 32.9% in the first quarter of 2025.
Such figures highlight the stark depth of economic hardship many face, with social grants serving as a vital safety net without sufficient employment opportunities.
Paul Maritz, Director at Free SA, a foundation advocating for rights, equality, and systemic reform, highlighted the gravity of this dependence.
'The growing reliance on social grants - now affecting over 25 million people — highlights deep socio-economic challenges and the urgent need for structural change,' he explained.
'Our proposed Power to the People Amendment aims to address these issues by reducing waste, devolving policing, and breaking monopolies that hinder economic opportunity.'
Maritz warned that 'sustained dependence on grants without parallel investment in job creation risks entrenching a welfare economy that stifles individual potential and hampers long-term growth.'
He warned that if current trends persist, South Africa's economy could face stagnation, shrinking tax bases, and rising inequality-all threatening social stability.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Next
Stay
Close ✕
The fiscal burden of social grants is significant. In 2011, the South African government allocated around 3.5% of GDP to social assistance, which has grown over the years.
The Centre for Global Development estimated that expenditure on social grants, particularly the Child Support Grant (CSG), reached nearly ZAR31 billion (approximately US$4.2 billion) in 2010-11.
Instead, they argued that they serve as a necessary-but insufficient-measure to support those unable to provide for themselves.
"While grants have helped improve food security, children's well-being, and school attendance,' Maritz warned that they are not a long-term solution to poverty.
'Overdependence can distort labor markets. When social assistance becomes a substitute for employment, it can disincentivize active job-seeking and skills development.
'Countries with more developed economies often implement prerequisites or conditions tied to grants, encouraging recipients to pursue upskilling or community participation.'
He added that the current approach risks creating a stagnating workforce and reducing overall productivity in South Africa, thereby hindering economic growth and perpetuating inequality.
'Ironically, the system designed to reduce inequality may inadvertently reinforce it if not paired with empowerment strategies.
'Without access to meaningful employment, quality education, and secure communities, social mobility remains elusive for many beneficiaries.'
Furthermore, dependence on grants without addressing the root causes-unemployment, corruption, and inefficient public services-could erode trust in institutions.
Maritz warned that 'a society where millions feel trapped and unheard is inherently unstable,' stressing the need for comprehensive reforms.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
3 days ago
- IOL News
Incorporating AI into workforce planning: optimising skills for the SA workforce of the future
By leveraging AI for talent acquisition, process optimisation, upskilling, and structural alignment, South African organisations can address unemployment, inequality, and inefficiencies across the value chain. Image: RON AI The integration of artificial intelligence (AI) into workforce planning is revolutionising how organisations prepare for the demands of the future. In South Africa, where unemployment stands at 33% (Stats SA, 2024) and skills mismatches persist, AI presents a transformative opportunity to align workforce capabilities with economic needs. By leveraging AI for talent acquisition, process optimisation, upskilling, and structural alignment, South African organisations can address unemployment, inequality, and inefficiencies across the value chain. This article, grounded in peer-reviewed academic studies, explores how AI can be embedded into workforce planning, with practical examples tailored to the South African context. Part 1 focuses on talent acquisition and process optimisation, while Part 2, to be published next week, will explore upskilling, workforce structures, and human resource challenges. The South African Workforce Context Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ South Africa's workforce faces significant challenges, including high unemployment, a youth unemployment rate exceeding 60%, and persistent skills shortages (Stats SA, 2024; Bhorat et al., 2020). The global economy is shifting towards digitalisation, with industries such as mining, retail, and financial services increasingly adopting AI-driven technologies (Schwab, 2019). Yet, only 22% of workers possess intermediate or advanced digital skills, exacerbating the skills gap (OECD, 2020). Historical inequalities further complicate workforce planning, with Black women facing unemployment rates of 40% (Stats SA, 2024). AI can bridge these gaps by enabling data-driven strategies to identify, develop, and deploy skills, fostering inclusive growth. AI in Workforce Planning: Key Applications Talent Acquisition and Skills Matching AI-powered recruitment platforms streamline talent acquisition by matching candidates' skills to job requirements with high accuracy. Research indicates that AI can reduce hiring biases by up to 30% when algorithms are designed to prioritise skills over demographic factors (Dastin, 2018). In South Africa, where affirmative action and employment equity are critical, AI can ensure fairer hiring by anonymising candidate data and focusing on competencies. Standard Bank, one of South Africa's largest financial institutions, implemented an AI-driven recruitment platform in 2022 to address skills shortages in data analytics and cybersecurity. Using a tool similar to IBM Watson Recruitment, the bank analysed candidates' qualifications, certifications, and informal skills gained through online courses or freelance work. This approach enabled Standard Bank to identify talent from underrepresented groups, such as Black graduates from rural universities, reducing hiring time by 25% and improving diversity metrics (Standard Bank, 2023). The platform also integrated with South Africa's Employment Equity Act requirements, ensuring compliance with affirmative action goals. South African organisations should adopt AI-driven recruitment platforms tailored to local contexts. These platforms must be trained on diverse datasets, including informal qualifications and non-traditional career paths, to tap into underrepresented talent pools like rural youth or informal sector workers. Partnerships with platforms like Pnet or Career Junction can enhance local relevance. Process Optimisation Across the Value Chain AI enhances efficiency across the organisational value chain by automating repetitive tasks, improving decision-making, and reducing costs. In South Africa's mining sector, AI-driven predictive maintenance reduces equipment downtime by 15–20% (McKinsey, 2021). In retail, AI optimises supply chain management by forecasting demand and minimising waste (Chui et al., 2018). Anglo American, a leading South African mining company, deployed AI-powered predictive maintenance systems at its Kumba Iron Ore operations. By analysing sensor data from mining equipment, the AI system predicted maintenance needs, reducing unplanned downtime by 18% and saving millions in operational costs (Anglo American, 2022). At the macro level, this aligned with South Africa's National Development Plan 2030 by enhancing productivity in a key economic sector. At the micro level, the system optimised workforce allocation, allowing technicians to focus on high-value tasks rather than routine checks. In the retail sector, Shoprite, South Africa's largest supermarket chain, implemented an AI-driven supply chain management system in 2023. Using a platform similar to SAP Integrated Business Planning, Shoprite forecasted demand for perishable goods across its 2,900 stores, reducing food waste by 12% and improving stock availability (Shoprite Holdings, 2023). This optimisation required upskilling employees to interpret AI-generated insights, highlighting the need for integrated workforce training. South African organisations should deploy sector-specific AI tools for process optimisation, such as predictive maintenance in mining or demand forecasting in retail. Collaboration with government and SETAs can align these tools with national skills development initiatives, ensuring macro-level coherence. Training programmes should accompany AI adoption to equip workers with data interpretation skills. Looking Ahead Part 1 has outlined how AI can revolutionise talent acquisition and process optimisation in South Africa's workforce planning. Next week, Part 2 will explore how AI supports upskilling, optimises workforce structures, and addresses human resource challenges such as inequality, workforce anxiety, and data privacy. By integrating these strategies, South Africa can build a workforce ready for the future. Dr Chris Blair, Group Director at 21st Century. Dr Chris Blair, Group Director at 21st Century. Image: Supplied.
Eyewitness News
3 days ago
- Eyewitness News
Human rights organisation, COSATU and economists debate future of social grants
South Africa's economy is not creating enough jobs, so what happens to the millions of people who currently rely on social grants? This was the question raised by activists, economists and labour leaders at a panel discussion hosted by the Black Sash in Cape Town on Wednesday. The event was part of the organisation's 70th anniversary celebrations, and looked at the impact of removing social assistance in a country with high youth unemployment, food insecurity and growing inequality. The General Household Survey released by Statistics South Africa (StatsSA) on Tuesday, shows that the proportion of people receiving social grants grew from about 13% in 2003 to 31% in 2019 and surged to 40% in 2024 'due to the introduction of the special Covid-19 Social Relief of Distress (SRD) grant'. Rachel Bukasa, Executive Director of Black Sash, said social grants are not a luxury, but a necessary response to high unemployment and poverty. 'Grants are an important stop-gap to the poverty and unemployment that exists. One of the biggest misconceptions when we talk about grants is that we don't want people to work. When we call for grants, it's in the absence of the jobs that the government has promised year after year.' She said while job creation remains the goal, the economy doesn't offer enough work for those who need it. Bukasa dismissed claims that grants breed dependency, saying they are a vital safety net while the government works to improve the job market. COSATU's Tony Ehrenreich agreed with Bukasa. He said the alternative to social support from the state is people falling into hunger and desperation. 'Grants are only a requirement when the market has failed. If the market is perfect there will be no need for grants, but the market is not perfect so we need to take care of people in the interim … It's not a question of jobs or grants. It's both,' Ehrenreich said. StatsSA reported that the official unemployment rate stood at about 33% in the first quarter of 2025. The expanded unemployment rate, which includes discouraged job seekers, is 43%. Ehrenreich said these statistics show the current economic direction is not working. 'We can say the system has failed if we look at the unemployment rate and deepening inequality … Must poor people pay for the failure of the rich and the public policymakers who drive around in their fancy cars? That can't be the response.' But political economist Phumlani Majozi said the current grant system is putting too much pressure on the country's fiscus. 'South Africans agree that the best way to move forward as a society is for people to have jobs … In our budget, the social grant expenditure is massive. 65% of our expenditure goes towards social grants, subsidised housing etc … Fiscally, it's not something that is manageable.' He criticised the lack of government vision. 'Where is the plan from the president and his cabinet to say by a certain year these are the targets … It doesn't seem like Enoch Godongwana has a plan.' Majozi said the system discouraged reform. 'There will be no incentive for government to change and pursue policies to encourage economic growth if our first argument is that we need social grants.' To which Bukasa responded that social security is a right, not a favour. 'Social assistance is protected by the Constitution. So we need to do away with the notion that it's a favour the government is doing … The fact that we have high needs for social protection right now is a reflection of governments inability to deliver on job creation.' This article first appeared on GroundUp. Read the original article here.
IOL News
3 days ago
- IOL News
Closing the skills gap: how training programmes are reshaping the workforce
Jennifer Mdluli is a radio broadcaster, Head coach and Founder of Emerald Gymnastics Club, and facilitator dedicated to youth and community development. As South Africa observes Workers' Day in May, the occasion carries a bitter undertone for many young people. For them, this time no longer symbolises hard-won labour rights or economic progress; it is instead a reminder of exclusion, unemployment, and unfulfilled promise. According to Stats SA, the unemployment rate stood at 31.9% in Q1 2024 and rose to a staggering 32.9% in Q1 2025. The expanded unemployment rate, which includes discouraged job seekers, reached 43.1%. Among the youth, the picture is even bleaker. While time-related underemployment remains at 4.6%, suggesting some are working fewer hours than they are willing and able to, the broader concern is the quality and accessibility of jobs. Distressingly, only 9.8% of employed youth are graduates, highlighting a harsh truth: higher education, while essential, no longer guarantees employment. This disconnects between education and economic opportunity reveals systemic issues. Many young South Africans remain locked out of the workforce, not because of a lack of will or potential, but due to structural inequalities, limited access to quality education, a lack of job creation, and persistent socio-economic barriers. The growing number of NEETs (youth not in employment, education, or training) is perhaps the clearest indicator of a generation at risk of long-term marginalisation. Without targeted interventions such as inclusive labour market policies, youth-focused entrepreneurship support, and stronger links between education and industry, South Africa risks losing the demographic dividend its youth could offer. As we reflect this workers month, let us not only honour the workers who built and sustain our economy, but also confront the realities faced by those still striving to enter it. South Africa cannot afford to leave its youth behind. The Urgent Call for Skills Training With traditional job pathways shrinking, young people are turning to alternative ways of becoming employable. Skills training has emerged as a practical and empowering solution - one that not only teaches job-ready competencies but also boosts confidence, independence, and long-term resilience. Recent data shows that youth with some form of experience are significantly more successful in transitioning into employment than adults. Between quarters, 12.3% of youth moved from unemployment or inactivity into work, compared to 7.4% of adults. This highlights the importance of early exposure to real-world work environments and practical skills. Community-Based Change: The Mordecai Ndlovu Foundation In response to this urgent need, organisations like the Mordecai Ndlovu Foundation are stepping up to close the gap from the ground up. Through initiatives such as the Waste Management Skills Programme, the foundation is equipping young people with accredited, industry-relevant skills that address local employment gaps. More than just training, these programmes offer: Stipends to alleviate financial pressure during the learning process Hands-on practical experience to ensure real-world readiness Structured mentorship and support, helping youth navigate the pathway into work As Mordecai Ndlovu, a passionate member of the Activate! Change Drivers and Generation G Champion, explains: 'I've had the privilege of driving social discussions around youth development in communities such as Tembisa, Orange Farm, Katlehong, and the Vaal. Our focus has been on creating meaningful programs and dialogues that address the unique challenges faced by young people. Through skills training, we bridge the employment gap by ensuring our youth are not only employable but equipped with practical industry skills.' Work, gender, and justice: a generation's call for change The future of work must also be gender-just. South Africa cannot address youth unemployment without tackling the deep gender inequalities that restrict access to opportunities and perpetuate violence. The Generation Gender (Gen G) program - a partnership between Activate! Change Drivers, ActionAid, and Sonke Gender Justice - is a vital response. Gen G works to build gender-equitable, violence-free societies, empowering youth as agents of change, especially in addressing the persistent crisis of gender-based violence (GBV). Skills training, therefore, must do more than prepare people for jobs - it must be transformative. Programmes must intentionally dismantle gender stereotypes, promote safety in training and workspaces, and ensure that young women, queer youth, and non-binary individuals are fully included. For example, the Waste Management Skills Programme not only creates green jobs but also challenges male-dominated norms, opening up new possibilities for inclusion and leadership. The political moment: from symbolism to structural change With South Africa entering a new political phase under a Government of National Unity (GNU), the country is presented with a rare opportunity for collective, forward-thinking action. Workers' Month in May must be more than commemorative; it must become a moment of commitment. The GNU must mainstream youth employment and gender justice into national policy, from funding inclusive skills training to protecting vulnerable workers from exploitation and harm. Partners like those in the Gen G alliance are already doing the groundwork, hosting dialogues, training changemakers, and shifting norms at the grassroots. Now, national leadership must match this momentum with bold reforms. This includes scaling up community-based innovations, strengthening industry-education partnerships, and ensuring that youth are not just beneficiaries of programs but leaders of change. The bigger picture: skills, not just jobs Statistics show that 65% of employers report skills shortages, not a lack of applicants. The most in-demand attributes aren't just technical skills, but soft skills like communication, adaptability, and problem-solving. These are competencies that programs like the Waste Management Skills Programme actively develop. In this light, training programs are not just a stopgap, they are a sustainable pathway to a reimagined workforce that values adaptability and lifelong learning. They also promote social inclusion, dignity, and a renewed sense of purpose for young people. A call to action South Africa's youth face a challenging job market, but hope lies in proactive, community-driven initiatives. Skills training offers more than employability; it offers empowerment. Organisations like the Mordecai Ndlovu Foundation are proving that with the right support, potential can be unlocked, and futures reshaped. Let this Workers' Day be more than a symbolic gesture. Let it be a call to invest in our youth, in skills development, and in programs that uplift from the grassroots. * Jennifer Mdluli is a radio broadcaster, Head coach and Founder of Emerald Gymnastics Club, and facilitator dedicated to youth and community development. A member of Activate! Change Drivers, an organisation that fosters youth leadership and inspires social change through creativity and engagement, Jennifer is committed to supporting efforts that promote equality, inclusion, and empowerment for all individuals.
