Category Archives: NIDS-CRAM

“Vaccine war effort needed” (My FM article on vaccines and learning losses)

SA is in flux: we’re waiting for what we know we need, even as we gird ourselves for disappointment. We’re waiting for an uptick in the economy; waiting for jobs; waiting for the ANC to sort out who is suspending who — but most of all, we’re waiting for vaccines.

The latest results of our National Income Dynamics Study — Coronavirus Rapid Mobile Survey (Nids-Cram), released this week, show that in February and March this year, the vast majority of South Africans (71%) said they would take the vaccine if they could. The problem is, there is none available.

By May 4, SA had vaccinated only 353,000 people. This is less than half those vaccinated in Kenya (853,000) or Ghana (850,000), and lower than in poorer countries like Senegal (417,000) or Zimbabwe (452,000). This picture is even more sobering if you consider the population size. Only 0.6% of SA has been vaccinated — less than Iraq (0.8%), Somalia (0.8%), Afghanistan (1%), and Libya (1.2%), and also less than the vaccination rate in 140 other countries.

Why is this? SA has the resources. It has the expertise. It has the health infrastructure. Instead, it would seem, there was a failure to strategically plan, and to hedge bets. Given the uncertainty around new vaccines, many countries sourced multiple types in the hope that at least one would work. SA came late to that party, then put all the eggs in the AstraZeneca basket — which proved less effective against the local variant. So here we are, back to square one.

Fingers crossed, May could be a turning point. Health minister Zweli Mkhize says SA will get 6-million Pfizer-BioNTech vaccines and 1-million Johnson & Johnson vaccines this month. And President Cyril Ramaphosa says the government has bought vaccines to cover more than 40-million people. All these vaccines, we are told, will arrive at some point in 2021. However, Ramaphosa hasn’t given specifics. So when those vaccines actually arrive, and how quickly they’re administered, remains to be seen. All while a third wave of Covid threatens to break.

Vaccine hesitancy

While SA has been preoccupied with supply problems (how to get more vaccines), it will, like other countries, soon confront a demand problem: how do we get people to take the jabs we do have? Today, the US has vaccinated about 150-million people (45% of its population), but the average number getting a first or single dose has fallen by nearly 50% since April 13.

That was the day that US health officials announced they would temporarily stop the rollout of the Johnson & Johnson (J&J) vaccine, because a tiny proportion of people getting the vaccine had developed blood clots.

This was a huge failure of judgment by the US — and by SA, which slavishly followed that approach. The US had other vaccines to offer, while SA simply paused its entire rollout without any other alternative. Among 7-million US adults vaccinated with the J&J jab, six people (0.00009%) developed blood clots. One died. Oxford researchers have shown that you are 8-10 times more likely to get a blood clot if you get Covid than from the vaccine, and 3,000-times more likely to get a blood clot from birth control pills (a 0.3% chance).

While regulators said they pressed pause due to “an abundance of caution”, it was a failure of judgment on multiple levels. SA (unlike the US) had no other vaccine at the time. The US stopped J&J, but continued with Pfizer and Moderna — but SA stopped rolling out the only vaccine it had. Apart from the fact that the mortality risk from Covid is orders of magnitude greater than the infinitesimal risk of blood clots, it means South Africans will have died unnecessarily due to that pause. But there is another more insidious cost: the increase in vaccine hesitancy, since people are now more wary of the vaccine.

Few genuinely understand that you are as likely to get struck by lightning (one chance in a million) as you are to get a blood clot from a vaccine. It’s not going to happen — but thousands of people who were on the fence may now opt against vaccination. The latest Nids-Cram (wave 4) results, released this week, shed light on whether these communication blunders are likely to have an impact on SA’s rollout. While the survey showed that 71% of South Africans are willing to get a vaccine (higher than many countries), the flip side is that nearly a third were vaccine hesitant. The three main reasons for hesitancy were: concern about side effects (31%); lack of belief in effectiveness (21%); or general lack of trust in vaccines (18%). To combat vaccine hesitancy, we need to know not only why people are hesitant, but also who they are.

This new data shows that those most at risk of Covid (the elderly and those with chronic conditions) are more willing to get the jab. By contrast, those least at risk — people aged between 18 and 25 — were less willing, with only 63% saying they would have a vaccination. This isn’t entirely surprising. As research has revealed elsewhere, those who trust social media as an information source (predominantly young people) were significantly more likely to be vaccine hesitant. One unexpected finding from the survey results was that a respondent’s home language was also a significant predictor of vaccine hesitancy, with 42% of Afrikaans home-language respondents being vaccine hesitant. This is higher than the national average of 29% and far higher than in people belonging to seven of the 11 language groups.

Though Nids-Cram is not provincially representative, in light of the predominance of Afrikaans in the Western Cape and Northern Cape, it accords with the finding that people from these provinces had higher vaccine hesitancy rates of 42% and 41%. More research is needed to understand this finding. But it is a key insight because vaccines are being rolled out provincially and the media that reaches them is predominantly segmented by language.

To what extent have the communication blunders affected these figures? It must be said that already in the Nids-Cram data in February and March, high rates of hesitancy were observed among certain groups — even before the temporary pause of the J&J rollout. However, this past weekend Gauteng premier David Makhura revealed that the J&J suspension did seem to be affecting vaccine registrations in his province. In the past three weeks, of the 1.3-million Gauteng residents older than 60, only 235,000 (18%) had registered to get a vaccine.

It shows there is no room for fuzzy messaging around the efficacy and safety of the jab, if we want a successful roll-out. But the bungle around the J&J vaccine points to what I believe is a bigger underlying problem: politicians are slavishly following the recommendations made by medical experts and trying to minimise deaths, rather than weighing up all sources of harm.  Mkhize’s Ministerial Advisory Committee (MAC) is currently made up of 51 doctors and medical academics, but not a single social scientist. Perhaps if there were people from the social sciences (like communications experts, economists and sociologists), the J&J debacle wouldn’t have happened.

Of course, it is a welcome change that the president and his health minister are listening to medical experts — a notable change from the Mbeki or Zuma eras, when Aids denialism was rampant — but we mustn’t fall off the horse on the other side. Medical experts are trained to measure medical risks, and make judgment calls about the efficacy of trials and rates of transmission. But a vaccinologist will be the first to admit he or she knows little of the non-medical risks like increasing unemployment, rising hunger, and growing learning losses. Measuring the social and economic costs of a nationwide lockdown isn’t part of a vaccinologist’s expertise. Instead, it is the politicians’ job to make the call as to what the right course of action is, when it comes to lockdowns, or opening schools.

Take schooling. Medical experts say the social distancing guideline to prevent the spread of Covid should be 1m-2m. Education officials reply that classrooms were not designed to have such large spaces between children — so if we need that distancing, we need “rotational timetables”, where only 50% of children can attend school on any one day. Last year, SA’s National Coronavirus Command Council accepted the experts’ distancing advice for schools without question, leading to rotational timetables in almost all no-fee schools, which make up more than 70% of the country’s schools. But how does one measure the costs of 5-million children not attending school on any one day for an entire year, or two?

Do the hypothesised benefits of limiting the spread of Covid justify these long-term costs to children? That’s not a decision for the medical experts, but for politicians — who are elected to use their judgment about what is in their population’s best interests, by weighing up the costs and benefits. Let’s consider these nonmedical costs.

Learning losses and school feeding

The rotational timetables that have been implemented in no-fee schools have created two major problems. The first is a loss of school days and learning; and the second is the loss of school meals, since poorer children generally don’t get meals on days they don’t go to school. The phased re-opening of public schools and implementation of rotation timetables means that in 2020, primary school learners lost 60% of a possible 198 school days.

For the first time since the pandemic started, we now also have data on learning outcomes for children affected by the pandemic. This makes it possible to estimate the true educational costs of lost schooling. In a paper published this week, Debra Shepherd and her co-authors examine these learning losses. This research was possible because the department of basic education, together with independent researchers, collected new data from two studies of 130 no-fee primary schools in Mpumalanga, and 57 no-fee primary schools in the Eastern Cape.

By comparing learning gains in 2020 against 2019, researchers estimated the impact of Covid and rotational timetables in no-fee schools in grade 2 and grade 4. The results confirm the worst fears: primary school children in these no-fee schools learnt 50%-75% less in 2020 than normal. Put differently, grade 4 learners in 2020 learnt a quarter of what their peers learnt in 2019.

This is all the more disturbing since education is a cumulative process, where subsequent learning depends on prior learning. Using that same data, we can compare the learning trajectories of children who were in grade 1 in 2019 and see how they fare in grade 2 in 2020. The graph shows how the learning trajectory of those children affected by school closures and rotational timetables flattened in 2020. The impact is likely to be felt for years to come, with some suggesting we will be able to get back to pre-pandemic learning outcomes only by 2030. 

And schools are about more than learning. In 2019 it was estimated that 9-million learners benefited from free school meals. The Nids-Cram survey asked respondents with children at school if their child had received a school meal in the previous seven days. For the dates that schools were open in February and March this year, less than half (43%) said their child had had a meal in the previous seven days. This suggests the feeding programme still hasn’t recovered — it is well below the pre-pandemic level of 65% in 2018 — and the main reason is the rotational timetable. Given the extraordinarily high costs that children are paying, educationally and nutritionally, because of rotational timetables, it is unsurprising that most parents and caregivers support the full re-opening of schools. In November 2020, Nids-Cram respondents with children in their households were asked: “Do you think children should be able to attend school every day?” In all, 58% answered yes. Given all the evidence, it’s unclear why SA still practises rotational timetables.

Risks to learners and teachers

At the start of the pandemic, when there was still so much uncertainty, closing schools was a rational and justified response. We didn’t know if children caught and spread the virus like adults, or if they were at severe risk from Covid.We know now. The risks to children of getting ill or dying from Covid are exceedingly low. To date, 194 children aged between five and 19 have died of Covid in SA — 0.4% of the total 51,527 deaths. For perspective, Stats SA estimates that of those aged between five and 19, about 12,870 die of “regular” causes in a given year. The issue, of course, is that it’s not only children who are at risk if schools increase transmission — there are also teachers and parents to consider.

Again, we have more evidence now than we had last year. In January, the National Institute for Communicable Diseases (NICD) released a report revealing “no consistent changes in incidence trends, associated with the timing of opening or closing of schools”.

But that’s for the general population — what about teachers specifically? In a report released this week, professor Martin Gustafsson analysed the department of basic education’s national teacher payroll database (Persal) for 2020, to calculate the number of excess teacher deaths from Covid compared to 2019. This is an incredibly accurate source of information on teacher mortality. When teachers die, they are removed from the payroll database. The analysis showed that these “excess deaths” map almost perfectly onto the first and second “waves” of the pandemic (see graph above), indicating they are almost certainly related to Covid. (The slight difference between the red and black lines is due to the delay in reporting national deaths since payroll data is less delayed.) Critically, however, this study reveals that there is no discernible relationship between teacher deaths and when schools are open.

Of the 401,327 teachers on the payroll, 1,678 are estimated to have died from Covid between the end of March 2020 and the end of February 2021. While tragic, it reveals that most “excess teacher deaths” occurred when schools were closed. We don’t see substantial excess deaths among teachers between September and November 2020 — when all grades were attending school. The SA Medical Research Council estimates that SA’s total excess deaths up to January 23 was 125,744. So, excess teacher deaths make up 1.3% of total excess deaths, with the other 98.7% coming from other fields of work and the unemployed. The analysis also shows that teachers at secondary schools are not at higher risk of Covid transmission than teachers at primary schools. This supports the claim that schools are not the main cause of Covid infection among teachers.

Vaccinate like our lives depend on it

According to Mkhize, SA will enter phase 2 of the vaccination strategy on May 17. The plan is to have 40-million people aged 18 years and older vaccinated by February 2022 — all using Johnson & Johnson and Pfizer-BioNTech vaccines.

To reach that goal, SA needs to administer 188,000 doses a day, every day, for the next 287 days. Yet in the past three months we administered only 353,000 shots. Granted, these were part of the Sisonke trial of health-care workers. But if you do the maths regarding the envisioned rollout rate, this would make SA the world leader in vaccine administration — faster than Chile, the UK or Israel, the three fastest countries to date.

The world leader, Chile, managed “only” 117,000 a day for 132 days. So SA — which now ranks 140th in the world in administering jabs — will have to vaccinate faster than the fastest countries in the world. Most experts I speak to know this is not possible, which is why the thinking has shifted from herd immunity to epidemic control. Covid, like the flu, will be with us for the foreseeable future, with top-up shots to protect against new variants.

The strategy will centre on vaccinating (and re-vaccinating) the elderly and those at high risk. This is still a mammoth task akin to the roll-out of antiretrovirals at the peak of the HIV/Aids epidemic. The government needs to vaccinate like our lives depend on it. But we also need to accept that we are entering a new normal where schools are fully open, and children and teachers wear masks. If we continue to deny children 50% of their education, we are moving closer to the reality of writing off a generation of children, the lost “Covid kids”.

The human and financial costs associated with lockdowns, and an uncontrolled pandemic, are thousands of times higher than any conceivable costs of getting and distributing vaccines. This is why every other country has thrown everything they have at this.

Less than a decade ago, SA went from the country with the highest uncontrolled spread of HIV in the world, to the country with the largest antiretroviral programme. It was thanks to a system-wide urgency, and partnerships between the government, the private sector and donors. And it was only possible because it was treated as a war effort, prioritised above all else.

This is what SA needs to do again.

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This article was first published in the Financial Mail on the 12th of May 2021.

For the full NIDS-CRAM Wave 4 Synthesis Report see here. For the full list of papers see here:

NIDS-CRAM Wave 4 Synthesis Report

Today we launched Wave 4 of our National Income Dynamics Study Coronavirus Rapid Mobile Survey (NIDS-CRAM). Only one more to go! (Phew!) I presented what I think are the 13 main findings from the 11 Working Papers at the launch, I’ve summarised them below. These are a little better summarised in our Synthesis Report which I would encourage everyone to read (it’s only nine pages). To download the full papers on which the Synthesis Report is based (or to get the questionnaires, do-files or panel user manual) go to the NIDS-CRAM Website, and if you want to download the data head to DataFirst.

Key findings from Wave 4:

(1) VACCINES: 71% of South Africans say that they would get vaccinated if a COVID-19 vaccine were available

(2) VACCINES: Vaccine hesitancy is highest among youth, those who trust social media, Afrikaans-HL respondents, and those in WC+NC. 

(3) SCHOOL MEALS: Less than half (43%)of respondents with kids reported that their child had received a school meal in Feb/March 2021 while schools were open (pre-pandemic it was 65%)

(4) LEARNING LOSSES: Children in no-fee schools have learnt 50-75% less in 2020 compared to what they normally learn 

(5) LEARNING TRAJECTORIES: Due to school closures and rotational timetables (only 50% of kids can attend on any one day) we’re seeing the flattening of learning trajectories

(6) TEACHER MORTALITY: Tragically, teacher mortality went up in 2020, but analysis of teacher payroll data shows that excess deaths from COVID follow SA trends NOT school opening/closing. 

(7) TEACHER MORTALITY: Teachers at secondary schools are not at higher risk of COVID-19 transmission compared to those at primary schools. 

(8) HUNGER: Weekly child hunger has declined from 16% in Nov/Dec 2020 to 14% in Feb/March 2021, although it is still nearly double pre-pandemic levels (8%)

(9) HUNGER: NIDS-CRAM has been administered four times in the last year. Two thirds of respondents (67%) said that in at least one of these waves their household had run out of money to buy food in the last month.

(10 HUNGER: One third of respondents (32%) in households with children in them said that in at least one of these four waves, a child had gone hungry in the past week in their household 

(11) EMPLOYMENT: Between Oct’20 and Jan’21 the % of employed adults in the NIDS-CRAM cross-sectional sample declined from 55% to 53% 

(12) EMPLOYMENT: Between October 2020 & January 2021 1/5th of those who were employed lost their jobs and 1/5th of those who weren’t employed found work. 

(13) ECD: Temporary ECD programme closure remains the primary reason (26%) for non-attendance at ECD programmes, and attendance in 2021 (19%) is still well below pre-pandemic levels (38%)

More than two million jobs returned when lockdown eased in 2020 – but hunger persists (my DM op-ed on NIDS-CRAM W3)

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.

Jobs bounce back, but hunger persists (my FM op-ed on NIDS-CRAM Wave 3)

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.

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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/