Category Archives: NIDS-CRAM

South Africa is currently in a race against time. As COVID waves come and go, and new variants emerge it is now more clear than ever that there is only one route out of the mess we find ourselves in and that is vaccination. On that front there is both good news and bad.

The good news is that both of South Africa’s vaccines – Pfizer and Johnsson & Johnsson (J&J) – seem to offer strong protection against the Delta variant driving the third wave. So if you’ve been vaccinated and developed an immune response (typically 2-4 weeks after vaccination) you won’t get severely ill from COVID. The other good news is that vaccine acceptance is increasing over time. In an earlier round of the nationally representative National Income Dynamics Study Coronavirus Rapid Mobile Survey (Nids-Cram) we reported that in February this year 71% of South Africans agreed to get vaccinated. In our latest results launched today, this has increased to 76% in April/May 2021.

The bad news is that the Delta variant is twice as transmissible as the original COVID virus, and hospitals are overwhelmed. Private sector hospital admissions in Gauteng, the Free State and the Northern Cape are exceeding the peaks experienced in the second wave. Gauteng alone had more than 4000 hospital admissions in the last week of June and as of 2 July was at 91% hospital capacity (public and private).

Unfortunately, at the end of June only 5% of the population had been vaccinated with at least one dose of a vaccine, well behind countries like Pakistan (6%), Botswana (7%), India (20%), and Brazil (35%), and obviously the US (55%) and the UK (67%). In fact as of the 1st of July South Africa ranked 126th in the world with the same vaccination rate as Libya (5.6%) and Venezuela (5,1%) – both essentially failed states.

Why is this? Originally we were told that supply was the main constraint. Yet we now have 7,4-million doses of the vaccine in our borders and have had more supply than we’ve been able to administer since May. To date only 3-million people in South Africa have been vaccinated. 

We were also told that we didn’t have enough money. Yet in February this year the Finance Minister announced that there was now “total potential funding for the vaccination programme to about R19-billion“ made up of R6.5-billion to procure and distribute vaccines, R2,4-billion for provincial health departments to administer the vaccines and a contingency reserve of R9-billion “given uncertainty around final costs.” Why is it then that five months later we only vaccinate on weekdays and not on weekends? Department of Health Spokesperson Dr Lwazi Manzi explained: “Basically, the provinces indicated they don’t have the budget to be able to pay the overtime over weekends.” And according to the Western Cape Treasury’s estimates that’s correct. They find that ‘operational costs’ amount to R108 per vaccine dose administered (p.102) including contract staff, hiring more nurses, overtime etc. If that figure is correct it will cost provinces R5,8-billion to administer 54-million doses (the number that’s needed to reach 40-million people since Pfizer requires 2-doses. That means that the contingency reserve is necessary and – at least at the time of writing – it had not been released to provinces, despite being technically “available.”

So practically speaking, what does this look like? The graph below shows the daily vaccination numbers from 17 May until 4 July 2021. It shows how vaccinations virtually disappear on Saturday and Sunday each week, as well as on June 16th, a public holiday.

Figure 1: Vaccines per day (17 May to 4 July 2021)

Using the average vaccination rates of the Friday prior and the Monday after, I estimate that between 17 May and 5 July 1,3-million additional shots could have been administered if we vaccinated on Saturdays and Sundays as well as on June 16th. Put differently, we are 1,3-million jabs behind schedule because we aren’t vaccinating on weekends. What this comes back to is state capacity. The South African state does not currently employ people primarily on competence and as a result is not able to implement its own plans, let alone expedite them. In response to a Parliamentary question from the opposition earlier this year, Minister Senzo Mchunu reported that 35% of the public sector’s 9,500 most senior managers in the country (at national and provincial level) “do not have the required qualifications and credentials for the positions they currently occupy.”

Does this help to explain why eight weeks into the national vaccination program we are still unable to either source, unlock, transfer or distribute the funds needed to pay staff for overtime so that they can vaccinate on weekends? How is it that the National Treasury announced R19-billion in available funds in February but in July we are still told by the Department of Health that there is no money? It’s as if we are fighting a forest fire on weekdays and then we send the firefighters home for the weekend because we can’t pay them overtime for Saturday and Sunday, even while the fire rages on.

There is another question about whether nurses should be the only people allowed to administer vaccines. The process is relatively straightforward and given the limited number of nurses in the country and the need to vaccinate 40-million South Africans in a year, others should also be authorised to administer COVID-19 vaccines. This is exactly what the United States has done. In February this year they passed the “Sixth Amendment to Declaration Under the Public Readiness and Emergency Preparedness Act (PREP) for Medical Countermeasures Against COVID-19. This essentially limits the medical liability of military officers administering the vaccines. As the US Military explains: “The PREP Act allows the Department of Health and Human Services to issue a declaration to provide legal protections to certain military personnel involved in mass vaccination efforts.” As a result the US Army has now administered more than 1-million vaccine doses in America.

Why can’t some of South Africa’s 70,000 Community Health Workers administer vaccines under the supervision of nurses at big sites with clinical oversight? What is the point of issuing a Disaster Management Act (and perpetually extending it) if we don’t actually use it to implement drastic measures to avert the disaster? If the Health Professions Council of South Africa (HPCSA) is obstinate that only nurses can do it, then it should be summoned to Parliament to explain why this is not possible.  Why can’t Parliament issue a similar liability waiver for trained Community Health Workers for the duration of the pandemic? After all, there have now been 3-billion doses of COVID-19 vaccines administered worldwide with no side effects in 99,99% of cases. This is now the most studied medical event in human history.

The government is already well behind it’s own vaccination plan having only vaccinated 60% of the target for the end of June (3 million of a forecasted 5-million people) and is an entire age-category behind schedule. Currently we are administering less than half (130,000) the number of daily doses required (250,000) to meet the target of 40-million vaccinations by February 2022.

The situation at hand also points to a lack of coherent leadership. The former President, under whose watch thousands of incompetent cadres were deployed to (and remain in) high office, is now en route to prison. Our Health Minister is on paid leave due to corruption and Deputy President David Mabuza is currently in Russia for a “medical consultation.” The Deputy President, who took “long leave” for the Russia trip, is also the Chairperson of the Inter-Ministerial Committee on Vaccines.

Why does all of this matter? It matters because the coronavirus pandemic is causing suffering on a scale that we have not seen before in South Africa. The latest Nids-Cram were released today (8 July) and paint a grim picture of the socioeconomic impact of the pandemic.

When asked in April and May this year, 10% of South African households with school-going children said that at least one child in their household had not returned to school since the beginning of 2021. That means that school dropout for those aged 7-17 years has now tripled from 230,000 pre-pandemic to 750,000 in April/May, i.e. an extra 500,000 children have dropped out of school during the pandemic. Whether this is temporary or permanent dropout is, as yet unknown, although previous research shows that the longer children remain out of school the higher the likelihood of permanent dropout.

By June of this year the average primary school child has also lost 70-100% of a year of learning compared to previous cohorts. That is to say that the average Grade 3 child in June 2021 knows about as much as the average Grade 2 child in June of 2019. These sorts of losses will take more than a decade to recover. Ongoing rotational time-tables means that children’s access to free school meals is also compromised. While this has increased from 46% in November 2020 to 56% in April 2021, this is still below the pre-pandemic level of 65%. The Department’s own reporting to the High Court confirms this.

Throughout all the waves of NIDS-CRAM respondents were asked whether anyone in the household went hungry in the last seven days because there wasn’t enough money for food. If there was a child in the household another question was asked as to whether any child had gone hungry. Using the latest NIDS-CRAM data, Professor Martin Wittenberg and Dr Nicola Branson at UCT estimate that in April 2021 approximately 10-million people and 3-million children were in a household affected by hunger in the past seven days.

The study also revealed the ways that the pandemic has affected South Africans differently. Although by March 2021 men’s employment had largely recovered to pre-pandemic levels, women’s employment was still 8% lower than in February 2020. To add insult to injury, women have also not benefited from the two COVID-19 government relief grants (UIF-TERS and the R350 SRD grant) at the same rate as men, despite being worse affected by job losses. Women only account for 35-39% of the beneficiaries of these grants.

The latest set of results from NIDS-CRAM (Wave 5) is also the last round of data collection for this research project. The aim of NIDS-CRAM was to collect reliable data on a broadly nationally representative sample of South Africans to help policy-makers and the public make informed decisions in the immediate aftermath of the pandemic. It was always scheduled to be five waves, which are now complete. The NIDS-CRAM collaboration, made up of over 30 colleagues and researchers from six South African universities NIDS-CRAM has written 67 research papers over the last year, covering everything from hunger and employment to vaccine acceptance and mental health (all papers are available at cramsurvey.org and the data is available for download at DataFirst). It has been an incredibly enriching experience, working with such dedicated and collaborative academics united in our belief in the importance of evidence and social justice.

Yet it has also cemented in my mind the critically important role that civil society has to play in holding the line in this democratic experiment we call South Africa. In different ways and at different times civil society has stepped into the gap created by the government and held it to account. The investigative journalists at amaBungane and Scorpio were the ones who exposed the rot of State Capture and the looting of State Owned Enterprises like Transet and Eskom, estimated to be at least R50-billion. And for what? For fancy suits and shitty weddings in Dubai? There is a shamelessness about those who have been exposed. Who refuse to resign in the face of blatant evidence of their corruption and moral debasement. We need to stop calling it “stepping aside.” This is euphemistic at best. These people remain on full pay, perhaps all the way until they go to jail, and even then they may still get them. Just this month it was reported that former ANC councillor Sibongiseni Baba has been sentenced to 10 years in prison after raping a party volunteer – yet he is still paid his monthly salary, despite being behind bars. One wonders if Zuma will still get his R3-million tax-payer funded annual salary when he is in jail. Perhaps that is also for the judicial branch of government to decide. Like civil society the judiciary and independent institutions have held the line, largely driven by the moral fortitude of people like Thuli Madonsela and Justices Zondo and Khampepe. It’s worth dwelling briefly on the powerful role they have played in our current constitutional realignment.

The role of the judiciary

There is a deep sense of poetic justice at play in South Africa’s Constitutional Court at the moment. Ten years ago, Jacob Zuma appointed Mogoeng Mogoeng as the Chief Justice – a contentious appointment at the time. While most of his ten years have been less controversial than was expected, things went south at the end of last year when he opened in prayer at a public event: “If there be any vaccine that is of the devil, meant to infuse triple-six in the lives of the people, meant to corrupt their DNA, Lord God Almighty may it be destroyed by fire, in the name of Jesus.” Soon after this he announced that he would be going on “long leave” until October 2021 when his decade-long tenure was set to come to an end anyway.

In March 2021 President Ramaphosa appointed Sisi Khampepe as the Acting Chief Justice. Originally appointed by Mandela in 1995 as a TRC Commissioner she went on to become a justice of the Constitutional Court and earlier this year she was asked to act as Chief Justice. This was because the Deputy Chief Justice Raymond Zondo (who would normally take the role) had his hands full with the Zondo Commission.

In a 127-page judgment Justice Khampepe lambasted Zuma explaining that his conduct “smacks of malice”, that his accusations were “utterly bereft of supporting facts” and concluded that in the process of dismissing two summons’ from the Zondo Commission and then further dismissing the summons of the Constitutional Court compelling him to testify at the Zondo Commission that he had acted in an “indubitably vexatious and reprehensible manner” and was sentenced to jail for 15-months. Her exact judgment and wisdom are worth quoting verbatim:

“It would be nonsensical and counterproductive of this Court to grant an order with no teeth. Here, I repeat myself: court orders must be obeyed. If the impression were to be created that court orders are not binding, or can be flouted with impunity, the future of the Judiciary, and the rule of law, would indeed be bleak. I am simply unable to compel Mr Zuma’s compliance with this Court’s order, and am thus faced with little choice but to send a resounding message that such recalcitrance is unlawful and will be punished. I am mindful that, ‘having no constituency, no purse and no sword, the Judiciary must rely on moral authority’ to fulfil its functions” Acting Chief Justice Khampepe.

Indeed. The last three years have been a moral reckoning for South Africa. The judgment against Zuma has placed the Constitution front and centre in our national discourse showing that everyone is equal before the law, and even presidents can go to jail. Yet that same Constitution also outlines other rights and obligations that we can no longer ignore. As Justice Khampepe reminds us, there are things that tie us together as South Africans that are about more than flesh and blood, or race and class. It is an ideal of a multi-racial country where all have equal worth and where reconciliation is possible.

Yet reconciliation also means sharing wealth and protecting dignity. How can we claim with a straight face that we are all equal when 10-million South Africans and 3-million children experience hunger on a weekly basis? As rich South Africans we are failing our fellow citizens, a fact that is made even more difficult to swallow when one considers that it is we who have benefited the most post-apartheid. I bring this up here because almost everyone reading the Financial Mail is in the wealthiest 5% of South African society (i.e. earning more than R32,000 per month before tax and deductions). From research into the last two decades of tax data we know that the wealthiest 5% of South Africans have been the main beneficiaries of economic growth post-apartheid. While this group is now multiracial, it is also only this group where the big gains have been made.

Research by Aroop Chatterjee, Lĕo Czajka & Amory Gethin presented last month shows that in 1994 the average White South African earned seven times the average Black South African (7-to-1). This ratio has now come down to 4-to-1 in 2019. However, this was entirely driven by the rise in incomes of the richest 5% of Black South Africans. If you exclude that group, the ratio in 2019 is the same as the ratio in 1994. In a nutshell, racial income inequality in South Africa has come down since 1994, but only because of significant income growth among the richest 5% of Black South Africans, not improvements for the poorest 90%. Other research by Ihsaan Bassier and Ingrid Woolard shows that the trend continues right up to the top of the distribution. The real incomes of the wealthiest 1% of South Africa doubled between 2003 and 2016.

At its core this issue is one of moral conviction. In a middle-income country no one should go hungry. In her judgment Justice Khampepe reminds us that the country we aspire to be is founded on rights and obligations made explicit in our Constitution. But it is not only the right to equality before the law but also that “Everyone has inherent dignity and the right to have their dignity respected and protected…Everyone has the right to have access to sufficient food and water.” No one needs to tell us that it is morally unacceptable that 1-in-6 South Africans experience hunger on a weekly basis. It is a blight on our national conscience and one that we can (and should) do something about. 

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This article first appeared in the Financial Mail on the 8th of July 2021.

Nic Spaull is an Associate Professor of Economics at Stellenbosch University and the co-Principal Investigator of Nids-Cram.

Food crisis: 2.5 million South Africans experience hunger ‘every day’

– Nic Spaull & Mark Tomlinson

As many as 10 million adults and nearly three million children experienced hunger in the past week in South Africa in 2021, and 2.5 million adults and 600,000 children were experiencing perpetual hunger, hunger every day or almost every day.

When people are asked the question, “What does it mean to live in poverty?” you get a whole variety of answers. Some people talk about a lack of income to buy what they need, others talk about a lack of shelter or the absence of choices. These are all quite difficult things to nail down. How much income is “enough”? What is ‘adequate’ when it comes to housing? How do you define ‘agency’? However, there is one universally accepted and universally understood measure of extreme poverty, and that is hunger. If you crave food but have no means of getting it (involuntary hunger) you are living in extreme poverty.

Apart from the obvious anguish and discomfort of experiencing hunger, there are many reasons why hunger is bad. Those who are perpetually hungry are more likely to be depressed, to experience anger and be less able to parent well or work effectively. We also know that the scourge of hunger is detrimental to children, and especially so to infants and pregnant or nursing mothers. Children that experience chronic undernutrition are more likely to be stunted which has profound implications for their being able to cope in school and engage in meaningful employment across the life course. There is increasing evidence that caregivers who are hungry are more likely to experience mental health difficulties, which in turn may impact on the development of their children. Compared to those who are not hungry, preschool children that are hungry will experience higher levels of chronic illness and are more likely to be shy and withdrawn when interacting with their friends.  Sadly, we also know that the parents and caregivers often report feelings of shame about the hunger of their children, further worsening their mental state.   

Exactly how bad were hunger and malnutrition before the pandemic?

South Africa is in the fortunate position to have up to date and reliable data on the extent of hunger in the country, both before the pandemic and now. Before the pandemic there were numerous household surveys estimating rates of hunger, stunting and malnutrition. The General Household Survey (GHS) administered annually since 2000 shows the percentage of households who report child hunger because there wasn’t enough food in the past 12 months. (Note this is an annual figure). Encouragingly this rate of child hunger has halved in the last two decades. Between 2000 and 2018, the rate of child hunger among households with children in them declined from 35% to 16%, largely attributed to the successful roll-out of the Child Support Grant and improving economic conditions over this period. However, hunger is only one measure of malnutrition. One might have food to eat, and therefore not be hungry, but the quality of that food may be poor. Meals composed primarily of processed carbohydrates are far less nutritious than those that include protein, vegetables and healthy fats. We know from research that inadequate diets like this lead to stunting as well as poor attention which impacts on schooling.  

In a paper published this year Professor Servaas van der Berg and his co-authors show that before the pandemic child hunger had declined significantly but stunting had not. In 1995 approximately 30% of children under 5 were stunted in South Africa, but by 2017 this figure was still 27%. UNICEF estimates  that in many other middle-income countries like Brazil, Iran, and China the prevalence of stunting is much lower at 5 or 6%. As van der Berg concludes “It would seem that the improvement in people’s economic circumstances, induced by the Child Support Grant, was not enough to translate into consuming more nutritious food, rather than consuming more food.”

How has hunger changed during the pandemic?

The National Income Dynamics Study Coronavirus Rapid Mobile Survey (NIDS-CRAM) has collected data on a broadly nationally representative sample of South African households covering the period from May 2020 to March 2021. It showed that there was a huge spike in reported household hunger in May and June 2020 following the hard-lockdown, with one in four South African households (23%) reporting hunger in the previous week. This has subsequently come down, but seems to have settled at a somewhat lower (but still very high) level of 16-17% of households. The NIDS-CRAM survey has asked households three questions related to hunger: (1) whether they ran out of money to buy food in the last month, (2) whether anyone in the household experienced hunger in the last week, and (3) if there were children in the household, did a child experience hunger in the last week. If anyone experienced hunger in the last week the respondent was asked a follow-up question about how often they had gone hungry (Never, 1 or 2 days, 3 or 4 days, Almost every day, Every day). The most recent data reports on hunger in February and March this year (2021). Van der Berg and his co-authors find that 14% of respondents who live with children said that a child had gone hungry in the past seven days, and 3% said that a child had gone hungry ‘every day’ or ‘almost every day’. Given that this represents extreme deprivation, this is extraordinarily high. By contrast, in 2019 the GHS shows that 15% of households reported a child had gone hungry at least once in the last year.

Figure 1: Reported hunger in the last 7 days (asked separately for “anyone in the household” and “children”) Source: Grace Bridgman’s analysis of NIDS-CRAM Wave 4 (February/March 2021).

But what do those numbers actually mean?

Statistics South Africa estimates that there are approximately 20-million children aged 0-17 years in South Africa. If for a moment we assume that children are equally distributed across households with children in them (a conservative assumption), this would mean that 2,8-million children experienced hunger weekly in South Africa in 2021 and 600,000 children experienced perpetual hunger (i.e. hunger every day or almost every day). Applying a similar approach to the rates of hunger across households, of the 60-million South Africans 10,2-million (17%) experienced hunger in the last week, and approximately 2,4-million (4%) experienced perpetual hunger (every day or almost every day). Clearly, we are not doing enough to alleviate this extreme form of suffering and deprivation.    

The NIDS-CRAM data also allows us to see how households have fallen into and out of food insecurity over the last year. Because we have conducted the survey four times and returned to the same person each time, we can see how their responses change over time. The four time periods cover the months of May/June, July/August and November/December in 2020 and February/March in 2021. The graph below shows that among households with children in them, one third (32%) reported that a child went hungry in the past week in at least one of these four waves of the survey, and 72% of respondents said that their household had run out of money to buy food in at least one of the four waves. Therefore, the “once-off” rates of child hunger and household hunger underestimate the extent of hunger in the country since many households are falling in and out of food insecurity on a regular basis.

Figure 2: Prevalence of running out of money to buy food, weekly household hunger and weekly child hunger in South Africa reported over the four waves of NIDS-CRAM 2020/2021 (all households with children in them). (Source: Shepherd et al, 2021: p.17)

When we think about these disturbingly high rates of child hunger and household food insecurity, we must ask ourselves how is it that we are willing to accept this gross assault on the dignity and humanity of children and adults? Is this the type of country that we want?

South Africa is arguably the most prosperous and modern country on our continent. It has the most sophisticated financial system, the best universities, an independent media, and a highly functional tax collection agency. Yet it also has 10-million people experiencing hunger every week? The ANC claims that it is the only party that can eradicate poverty (Radebe, 2019) and it is true that it was the ANC that initiated and rapidly expanded the Child Support Grant of R440 per month – an incredibly effective, well-targeted grant that reaches 13-million children. It was largely responsible for the big decline in child hunger over the last two decades and is one of the biggest successes of post-apartheid South Africa. But clearly poverty and hunger persist. Why has progress stalled? While economic growth is the long-term solution to poverty eradication, we simply cannot wait for economic growth before addressing the hunger crisis that is clearly all around us. If the government is serious about hunger, and protecting the dignity of the poor, the status quo is not enough.

Hunger is universally condemned across the political spectrum. Those who oppose additional measures to address hunger should be shamed on moral grounds and a lack of conscience. If the ANC is serious about eradicating hunger in this decade then it must announce new and bigger policies to radically address the hunger crisis.  This is a crisis, and one that existed before the pandemic. If bold action is not taken the generational impact will be profound.

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This article first appeared in the Daily Maverick on the 27th of May 2021.

On a similar topic, Mark and I, together with Xanthe Hunt (SU) and Dan Stein (UCT) wrote an editorial for the latest edition of the South African Medical Journal (SAMJ) titled “Hunger as a driver of depressive symptoms: Optimising responses to mental health aspects of the COVID-19 pandemic“

What these results show is the reality that a jobs bounce-back for one part of the country can coexist with worsening deprivation in another part. We can have both more jobs and more hunger at the same time.

Today we released the latest results of our nationally representative survey – the National Income Dynamics Study Coronavirus Rapid Mobile Survey (NIDS-CRAM) Wave 3. For once the results are very encouraging. 

In 2020 we reported that during the hard lockdown 2.8 million people had lost their jobs between February and April. We now find that by October 2.1 million people had found employment, taking employment much closer to their pre-pandemic levels. 

As I’ll explain below, this was not only a case of job-losers regaining their lost jobs.  In fact, research by Gabriel Espi, Vimal Ranchhod and Murray Leibbrandt show that only half of “job-losers” regained employment with the remainder made up from those who were previously unemployed. Among those that had no job in February pre-pandemic, a third were now employed by October 2020. This reveals a labour market in flux and also points to the resilience and dynamism of job seekers doing everything they can to find work in a “new normal”.  

What is unique about the NIDS-CRAM survey is the high frequency of data collection. From March 2020 we surveyed more than 7,000 people, phoning them every two to three months and asking them a range of questions about whether they were employed (or earned any income from anything) in February, April, June and October. 

What the Wave 3 data show is that in 2020 being in flux was the norm. Figure 1 below shows the percentages of people in 2020 that were “Never employed”, “Always employed”, and “Sometimes employed” (at least once across the four periods). It shows that across age categories and levels of education about 40% of respondents were neither stably employed nor stably unemployed, but rather that they had a job at least once, but not always. That is a remarkable finding.

Figure 1 and 2 also show that the probability of stable employment depends strongly on age and education, with youth in an especially precarious position. Only 10% of youth (18-24 years) were always employed in 2020 and at least half (53%) were never employed in 2020. Those with tertiary education were also far more protected against job loss or precarious employment. 

In their paper, Gabriel Espi and his co-authors also found that 2020 employment outcomes are strongly influenced by employment history over the past seven years. The stably employed historically tend to retain their jobs while the persistently unemployed remain unemployed. The transient employed tend to repeat their pattern of finding and losing jobs.

Our survey also asks respondents about their wellbeing and the wellbeing of those in their household. 

Of most concern is that we see rates of hunger, and especially child hunger, rising over time. Mental health is also deteriorating. The percentage of respondents experiencing hunger in the past week because they didn’t have enough money to buy food increased from 16% in July to 18% in November 2020. The increase was even larger for child hunger rising from 12% in July to 16% in November 2020, with the sharpest increase for households with black African children (from 13% to 19% weekly hunger). 

This should be of major concern. 

Similarly, the percentage of the population screening positive for depressive symptoms has now increased from 24% to 29% of the population, with the sharpest increases seen for those experiencing perpetual hunger, ie those reporting hunger “every day”.

What these results show is the reality that a jobs bounce-back for one part of the country can co-exist with worsening deprivation in another part. We can have both more jobs and more hunger at the same time. 

This is the reason the grant system and talk of a Basic Income Grant are so important. Even before the pandemic, South Africa had 10 million people who wanted work, but couldn’t find it. There is no conceivable world where all of these people get jobs. For some perspective, it took us a decade to create 2.4 million jobs (2009-2019). What we are seeing is that more economic growth and more social grants are the left-right combo South Africa needs to move forward. One without the other won’t work.

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All 11 NIDS-CRAM Wave 3 Papers are available here: https://cramsurvey.org/reports/#wave-3

This article first appeared on the Daily Maverick on 17 Feb 2021 – see here.

More than 2-million South Africans found work between June and October 2020, according to the latest round of data from the Nids-Cram survey. But hunger — and child hunger in particular — persists

On Tuesday November 3 2020 answers began rolling in for SA’s third wave of the nationally representative National Income Dynamics Study Coronavirus Rapid Mobile Survey (Nids-Cram). The survey co-incided with major global shifts, with Americans voting in a new (sane) president, and the announcement of successful Covid-19 vaccines passing clinical trials. The wave 3 Nids-Cram results offer their own story of a turning point.

The data from our Nids-Cram survey reveals a remarkable bounce-back in employment between June and October. Last year we reported that 2.8-million people had lost their jobs between February and April, and while many furloughed workers had returned to work by June, those who had lost their jobs had not (see graph below).

We now see that with the rapid easing of the lockdown between June and October there was a strong recovery in employment, with about 2.1-million people gaining employment in a rapidly changing labour market.

These are not necessarily the same people who lost their jobs during the lockdown: only half of them have regained employment. But a third of those who were unemployed before the pandemic have now found work.

All this suggests a big bounce-back in jobs, taking us much closer to pre-pandemic levels of employment. This is really good news. But it also reflects some seismic shifts in the labour market.

This shift comes as a big relief, and we conducted a number of checks to be sure the changes are real. Eight economists at the University of Cape Town, Stellenbosch University and Wits University, writing three papers looking specifically at employment, found the bounce-back to be robust even when factoring in different definitions of employment (hours worked rather than a count of the employed) and the sample used.

Earnings data also shows that people are earning at least the same as they were last February, and some wages may even have been higher in October.

Corroborating evidence also comes from Stats SA’s monthly sales data — the data used for GDP calculations. Nids-Cram researcher Ihsaan Bassier and his co-authors report that this data suggests that “important sectors of the SA economy — mining, manufacturing, wholesale and retail — were making October 2020 sales at or above their February 2020 levels … This suggests that certain sectors had substantially recovered by October, and is consistent with the employment recovery we see in wave 3 of Nids-Cram.”

The imminent release of Stats SA’s Quarterly Labour Force Survey for the fourth quarter of 2020 will help verify the extent of these changes, yet the results are very promising nonetheless. And for 2-million South Africans, at least, that matters a lot.

Worst child hunger in 10 years

The employment findings were not the only surprise to emerge from the Nids-Cram survey. When employment increases, our expectation is that hunger will fall and mental health will improve. However, that is not what we found.

Research by Servaas van der Berg, Leila Patel and Grace Bridgman reveals that between July and November the proportion of households experiencing hunger in the previous week due to insufficient food increased from 16% to 18%.

The most startling finding is that child hunger also worsened, and is now at its highest level in 10 years.

In our previous survey we found that one in eight (12%) households with children had children experiencing weekly hunger. Our new results show this has increased to one in six (16%), with the sharpest increase being for households with black African children (from 13% to 19% weekly child hunger).

This should be of major concern. Before the pandemic more than one in four (27%) of SA’s children were stunted, meaning their malnourishment was so severe that they had low “height-for-age”. 

Hunger also affects mental health and depression. Among those who had experienced hunger in the previous week, 40% screened positive for depressive symptoms, compared with 27% for those who had enough to eat.

In fact, another troubling finding from our results is that mental health seems to be deteriorating across the board. Work by Adeola Oyenubi and Uma Kollamparambil shows that, between July and November, the percentage of people screening positive for depressive symptoms rose from 24% to 29% of the population. They also find rapidly deteriorating mental health for those experiencing perpetual hunger. For those who reported they went hungry “every day”, 67% screened positive for depressive symptoms.

So, what are we to make of this? Why has hunger — and especially child hunger — become worse when more than 2-million jobs have returned? The short answer is that we don’t yet know. There are no smoking guns — only plausible explanations.

For one, child hunger may be related to disrupted free school meals. In pre-Covid times, 65% of households reported that a child had received a free school meal. In November, only 48% of respondents said their child had received a meal at school that week, despite all schools being “open”. But even that 48% figure is likely to be an overestimate, due to “rotational timetables”, which mean schools are operating at 50% capacity, with only half the classes attending on any given day. (Typically, children do not get meals on days they don’t attend school, something the basic education department has admitted in court documents.)

What about grants?

Another key piece of the puzzle is the social grants system and the removal of grant top-ups in November. Up until then, the R440 a month child support grant (CSG) was topped up by R500 per caregiver, and the old age pension of R1,860 a month was topped up by an additional R250.

These top-ups were last paid at the beginning of October.

The rollout of the CSG over the past decade is universally accredited with alleviating child hunger and helping to reduce poverty, which is why many believe the removal of the CSG top-up is one of the reasons for the rise in child hunger. While there is currently limited evidence for this, it remains a very plausible explanation.

What many South Africans don’t realise is that SA leads the world when it comes to the reach of its social grant system — and did so even before the Covid-19 pandemic. In their Nids-Cram paper, Bassier, Josh Budlender and Rocco Zizzamia show that in October more than 70% of adults in SA lived in households receiving a government grant.

We know from both Nids-Cram and other household surveys that about half (56%) of South Africans live in households that receive at least one CSG a month.

It’s worth comparing SA’s CSG scheme with two popular Latin American counterparts: Brazil’s Bolsa Familia programme (R500/child/month) and Mexico’s Progresa/Oportunidades programme (R800/child/month). In both cases the grant reaches only about 20% of the population, and both are conditional on behaviour (sending children to school, getting them vaccinated and so on).

In addition to the existing grant infrastructure in SA, the government added the R350 a month social relief of distress grant (SRDG) during the pandemic. The grant reaches about 40% of households and has brought 10% of previously excluded households into the social protection system.

In his 2021 state of the nation address, President Cyril Ramaphosa announced that the SRDG would be extended for another three months, until the end of May 2021 — the second time it has been extended.

As I’ve noted before, the longer that door remains open, the harder it will be to shut. In my view, the R350 a month grant is here to stay. I suspect it will be rebranded — potentially as an “unemployment support grant” or “basic income grant” — and will join the others as a permanent feature of the social protection system. And so it should.

The widespread coverage of our grant system should be a point of national pride. The system is also progressively targeted. In October, about 90% of the poorest half of the population lived in a household that received a grant, compared with less than 40% for the wealthiest quarter.

The way forward

What is clear from the above is that the labour market alone will not solve SA’s problems. Even as SA moves towards pre-pandemic levels of employment, hunger persists and may deteriorate even further. And future lockdowns may mean that we lose many of the jobs we have only just regained. We don’t yet know.

For a moment, however, let’s assume we are en route to our pre-pandemic levels of employment. In the last quarter of 2019, Stats SA reports that about 16-million people were employed, but at least 10-million South Africans who wanted to work couldn’t find jobs. What happens to them, and to their dependants?

Some would argue that they simply need more and better education and training — the idea that if you “teach a man to fish, you feed him for a lifetime”. Yet the evidence seems to suggest this is magical thinking. About a third of the unemployed, for example, have already passed matric.

In Give a Man a Fish, professor James Ferguson argues persuasively that we need to think differently about government grants and the reasons people are entitled to them: “Teaching a man to fish in these times, then, may be just a good way of creating an unemployed fisherman, or, at best, a marginal hanger-on in an already oversaturated competitive field. It is not obvious that being trained for a nonexistent job would benefit the man in any way, and it is certainly nonsense to suppose that he would, by virtue of that training, be fed for a lifetime … The ‘teach a man to fish’ slogan seems to come from a world where the labour of poor people was needed by the apparatuses of production and where the central problem was creating enough trained and willing workers to meet labour needs. That is not the world we live in today.”

This is not to say that employment and education are not critical, and part of the solution — they are. Or that we should divert attention away from public employment schemes and meaningful educational reform — we shouldn’t. The argument is simply that neither will create 10-million more jobs.

In that context, if we want people to have a modicum of basic dignity, we need to keep giving grants — not out of charity, but out of a recognition that everyone has a basic right to dignity and life.

As Russian thinker Peter Kropotkin argued more than 100 years ago: “We must recognise, and loudly proclaim, that everyone, whatever his grade in the old society, whether strong or weak, capable or incapable, has, before everything, the right to live, and that society is bound to share among all, without exception, the means of existence it has at its disposal.”

A little closer to home, the Freedom Charter goes a step further: “The people shall share in the country’s wealth.” In other words, purely by virtue of their personhood, all people deserve some minimum level of income to stave off the worst forms of deprivation. The demand for a basic income grant starts from the self-evident truth that all people deserve basic dignity and respect.

So where does the money come from? The solution lies in three parts, all of which speak to economic growth either directly or indirectly:

• The government must get serious about corruption and prosecute corrupt officials irrespective of their political standing;
• It must get serious about recruiting competent people into the public service and firing incompetent employees; and
• It must reprioritise expenditure in favour of social services and away from vanity projects such as SAA. If these fail, then the only alternative is to raise taxes — an increasingly precarious option.

Dealing with corruption and an incapable state are the two most promising (and immediate) routes to increased economic growth, which is arguably the binding constraint to almost everything else. On state capacity, the problem is most easily seen right at the top.

Ramaphosa is the master of announcements and beginnings. To every problem there is a new solution; the graveyard of old solutions and half-implemented projects is vast and growing. Why is it that we are perpetually told about new government initiatives rather than the progress of old ones? The reason is simple: the state lacks the capacity to implement its own plans.

For too long, politics has trumped competence in the recruitment of bureaucrats — a failing related to cadre deployment rather than affirmative action.

There are thousands of highly competent black professionals working in the private sector who would be willing to work in the public service if it were open to bold reforms and competence-based recruitment. Yet the state is unable to implement the necessary changes to make the public sector a viable and attractive option for them. That would be too threatening to existing cadres, and so it never happens.

This is costly at any time, but is doubly so during a pandemic. As economist Mariana Mazzucato has argued in Mission Economy: A Moonshot Guide to Changing Capitalism: “In crises, government intervention is only effective if the state has the corresponding capability to act … Without this, they cannot even devise robust terms of reference for the companies they bring in.”

The reason the government needs to get serious about corruption and state capacity is that if it doesn’t, then neither the economy nor the tax base will grow. But there is another reason — government debt is no longer an option.

This time last year, the National Treasury made it abundantly clear that we were in the midst of a debt crisis and that within two years “interest payments will exceed health spending”. Nearly a seventh of all government expenditure (15%) went to paying off the interest on our national debt — and that was before the pandemic and before the stimulus spending.

In light of this one has to ask: why does the government own an airline? We are repeatedly told that SAA must be bailed out. Where does this R10bn come from? Cuts to provincial allocations that fund hospitals, HIV care, school infrastructure, textbooks and policing. These bailouts of state-owned enterprises are immoral, irrational and indefensible.

One other way to raise the funds we need is to phase out our current system of generous corporate welfare — something the Treasury is already strongly considering. For example, hidden on page 122 of Annexure B of the 2020 Budget Review we learn that “one dominant taxpayer claimed almost R10bn in each of the 2017 and 2018 tax years, raising concerns about the equity of the corporate tax system”.

That’s a pretty big rebate.

In the absence of restructuring expenditure and decreasing corporate welfare, one option is to raise taxes or introduce new ones, like a wealth tax. But here, too, we are stuck between a rock and a hard place. As it stands, 95% of personal income and company income tax is raised from the richest 5% of the population.

It’s too early to know what the 2020 tax year will look like, or how much haemorrhaging there has been, but even the 2019/2020 data — released two months ago by the SA Revenue Service (Sars) — is instructive. It shows that of the R360bn raised in personal income tax in 2019, 98% (R351bn) came from the richest 2.7-million people. To be in that group, you needed to earn at least R200,000 a year.

This is not something peculiar to 2019. Similar figures for Sars’s reliance on the richest 3-million people are found in 2018 (97%), 2017 (96%) and 2016 (95%).

Given that there were about 60-million people in SA in 2019, we can say that more than 95% of personal income is raised from the richest 5% of the population.

And what about companies? For the past four years, 95% of company income tax (CIT) has come from the biggest 5% of companies. To be specific, Sars usually collects about R200bn in CIT a year, and though there are more than 800,000 companies in SA submitting returns, the biggest 37,000 (5%) account for 95% of CIT paid.

Thanks to Sars’s diligent breakdown, we can also see that over the past four years the biggest 400 companies accounted for half (55%) of all CIT.

What it means?

People who own large, profitable, tax-paying companies are earning more than R200,000 a year, so it’s safe to conclude that the people owning companies that pay company tax are the same people who are paying personal income tax (with the exception of foreign-owned companies paying taxes here). In that case, of the R1.35-trillion that the government raised in taxes in 2019, half (55%) came from the richest 5% of South Africans. The four sources of state revenue are personal income tax (39%), CIT (16%), VAT (25%) and “other” taxes, such as the fuel levy and customs duties (20%).

So what has this got to do with raising taxes? It means that the lion’s share of government revenue is precariously dependent on the richest 3-million South Africans. While much talk in SA focuses on emigration and tax avoidance, we shouldn’t forget that willingness to pay taxes is also a function of perceived legitimacy and what the taxes are used for.

If a defensible basic income grant were announced to stave off the worst forms of deprivation, taxes would need to go up to pay for it. Last year, former Goldman Sachs CEO Colin Coleman presented a well-thought-out plan to fund such a grant of R500 a month. Yet if the government moves in this direction without first getting tough on corruption, we will start seeing money going underground or overseas. More people will feel morally justified in hiding their income and wealth.

The latest Nids-Cram results are both encouraging and sobering — encouraging because they paint a picture of a resilient labour market and dynamic job-seekers; and sobering because they show that hunger can persist even as employment increases.

While this is the first solid evidence of SA turning the economic corner in the pandemic, it is also clear that the government needs to reintroduce top-ups to the CSG to stave off hunger and deprivation, especially for children. To fund this, and a basic income grant, it will need to tackle corruption, give up on vanity projects such as SAA, and reprioritise spending towards the poor.

The pandemic has given us an opportunity to reflect on the society we have created and to envision a different one, where all people have basic dignity and respect, and where we are led by competent, ethical public servants.

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This article was first published by the Financial Mail on the 17th of Feb 2021 and is available here.

All papers from the study and the data are freely available at  https://cramsurvey.org/