S African economy boost up but poverty persists

Published on Wednesday 16th July 2008

South Africa: Economic inequalities remain in South Africa after the fall of apartheid although fewer people are still caught in grinding poverty, a government report said on Thursday.

The Presidency's Development Indicators 2008 report said the standard of living for a large number of people had improved between 2000 and 2007, with incomes improving across all sectors.

"This improvement in the people's lives could be attributed to economic growth and expanding employment as well as government's poverty alleviation initiatives," it said.

Economic growth in Africa's economic powerhouse has averaged 5 percent in the past four years, mainly driven by consumer demand.

The report however said the fruits of economic expansion were not enjoyed by all South Africans, and that inequality had become more pronounced.

"While the income of all sectors has improved, that of the richer segment of society seems to have improved at a faster rate," it said.

The powerful COSATU labour federation, an ally of the ruling ANC, has embarked on a drive to pressure the government into loosening fiscal and monetary policies to ease the plight of workers it says have not benefited from the country's economic boom.

The ANC's leftist allies helped elect Jacob Zuma to the leadership of the party last December, defeating President Thabo Mbeki, who has been accused of implementing pro-business policies at the expense of the poor.

The Development Indicators report showed that as of March 2008, 12.4 million people, out of a population of 48.5 million received social grants, and 3.1 percent of gross domestic product was spent on social assistance.

The report also showed that economic growth had a marginal positive impact on employment.

Official data shows that unemployment fell to 23.0 percent at the end of September 2007, from 25.5 percent in March last year. The government aims to cut joblessness to about 14 percent by 2014.

High unemployment has been blamed for the country's high levels of crime.