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Makino, Kumiko  (2004) Social Security Policy Reform in Post-Apartheid
South Africa A Focus on the Basic Income Grant
Centre for Civil Society Research  Report 11: 1-38.

Despite the end of apartheid, severe poverty and huge socio-economic inequality still remain in South Africa. South Africa’s Gini coefficient is one of the highest in the world (0.59 in 2001 [UNDP, 2001]). 21.6 million South Africans in the bottom two quintiles spend on average only R144 (approx. US$18.5) per person per month, while the average consumption in the top quintile is R2,409 [Haarmann, 2001, 24-28]. Reflecting the apartheid past, poverty is concentrated among blacks, particularly Africans; 61% of Africans and 38% of coloureds are poor, compared with 5 % of Indians and 1% of whites [May, 1998, executive summary]. Poverty eradication is claimed to be the top priority for the Government, and social security is one of the key policy areas in this context.

While the coverage of social insurance is fairly limited due to high unemployment and large informal sector, non-contributory social grants, especially the old age grant, cover millions of people and are widely acknowledged to have contributed to poverty alleviation [Ardington and Lund, 1995; Case and Deaton, 1996]. Historically, the old age grant was first introduced in 1928 for whites and coloureds only, but in 1944 it was extended to all races. The benefit levels were highly discriminatory, however; the amount of the grant for whites was 7.5 times higher than that for Africans in 1965 [Smith Committee, 1995, annexure D2.6]. The racial gap gradually narrowed after 1965, and the benefit levels became equal among all races in 1993, the year before the first non-racial elections in South Africa. By then, typical old age grant recipients had become African women living in rural areas, where the poverty was concentrated.

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