tag:theconversation.com,2011:/id/topics/sassa-35934/articlesSASSA – The Conversation2021-10-05T15:18:22Ztag:theconversation.com,2011:article/1681212021-10-05T15:18:22Z2021-10-05T15:18:22ZSouth Africa needs to up its game when it comes to financial inclusion for women<figure><img src="https://images.theconversation.com/files/423877/original/file-20210929-16-15q32kr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
A woman running her stall on Vilakazi Street, Orlando West. Soweto, Johannesburg.</span> <span class="attribution"><span class="source">Hoberman Collection/Universal Images Group via Getty Images</span></span></figcaption></figure><p>The financial gap between men and women is a <a href="https://globalfindex.worldbank.org/">global problem</a>. It’s a problem because excluding women financially prevents them from participating and contributing to society’s social and economic activities. This is bad for women, and for society.</p>
<p>In South Africa, the government has put in place different measures to address gender equality. But policies on financial inclusion have always been generalised and not gender specific. <a href="https://www.worldbank.org/en/topic/financialinclusion/overview">Financial exclusion</a> is when people don’t have access to – or can’t afford – financial services. Financial inclusion means being able to access credit and manage or mitigate risks with products that satisfy an individual’s basic needs. </p>
<p>In the case of women entrepreneurs, financial inclusion involves being able to save and invest, and having products that help them manage their businesses sustainably. </p>
<p>The focus of my doctoral <a href="https://repository.up.ac.za/handle/2263/78103">research</a> was to analyse conditions that explain financial inclusion among women-owned businesses. </p>
<p>My findings show that South African women are financially included in terms of bank account ownership. But they are not financially included in, and don’t make use of a range of, other financial products or services.</p>
<p>I also found that there’s a huge gender gap in terms of policies and interventions that would help women entrepreneurs. Government policies haven’t been designed to address the particular situations faced by women running a business.</p>
<h2>Financial inclusion and women</h2>
<p>My study involved 30 women entrepreneurs in South Africa’s economic hub Gauteng, as well as five policy makers.</p>
<p>My findings align with <a href="https://www.mfw4a.org/publication/gender-and-financial-inclusion-analysis-financial-inclusion-women-sadc-region">earlier research</a> that shows that South African women are more financially included than those in other countries in the Southern African Development Community.</p>
<p>This has been attributed to the fact that South Africa has an extensive programme of distributing grants. Over <a href="https://www.groundup.org.za/article/everything-you-need-know-about-social-grants_820/">18 million are paid out every month</a> by the South African grant agency <a href="https://www.gov.za/services/social-benefits/social-relief-distress">SASSA</a>. Most are paid into bank accounts and recipients use a Mastercard to cash out money at ATMs and to swipe at shops.</p>
<p>But having a bank account doesn’t equate <a href="https://www.researchgate.net/profile/Ashenafi-Fanta/publication/305875551_Gender_and_Financial_Inclusion_Analysis_of_financial_inclusion_of_women_in_the_SADC_region/links/57a4457908aee07544b1b816/Gender-and-Financial-Inclusion-Analysis-of-financial-inclusion-of-women-in-the-SADC-region.pdf">to using it</a>. Research has shown that 28% have active bank accounts – defined as those with a monthly deposit and where transactions occur monthly. A higher proportion transacted on their accounts only twice a month or had dormant accounts. </p>
<p>Most of the female entrepreneurs in my research said they struggled to access financial services and had to partner with a man before being heard by financial stakeholders. Most of the women also attested to the fact that they remained restricted to the household’s financial responsibilities. They also said they had limited exposure to the benefits of financial institutions and the products they had to offer. </p>
<p>Other constraints that surfaced in my study were:</p>
<ul>
<li><p>Lack of information</p></li>
<li><p>Issues such as race, class and family values that prevented women from taking responsibility for finances</p></li>
<li><p>Related themes such as discrimination, insufficient networks and lack of collaboration, a lack of skills and illiteracy.</p></li>
</ul>
<p>Participants also pointed to the fact that they tended to be declared insolvent by financial institutions as they have a higher tendency to be in debt and their businesses going into liquidation than their male counterparts. </p>
<h2>What’s in place</h2>
<p>Different institutions are working on financial inclusion in South Africa. </p>
<p>The first is National Treasury. The Financial Sector Conduct Authority also has <a href="https://www.fsca.co.za/Documents/FSCA%20Financial%20Inclusion%20Strategy.pdf">a mandate</a> for financial inclusion.</p>
<p>The Financial Sector Charter was another initiative implemented by the government and financial service providers to transform the sector by increasing the use – and access to – financial services. Part of this has been an ongoing commitment to <a href="https://journals.co.za/doi/abs/10.1016/j.rdf.2015.04.001">financial literacy efforts</a>. </p>
<p>But none of the interventions pursued so far have decisively dealt with the issue of financial inclusion for women. </p>
<h2>What needs to be done</h2>
<p>The critical answer that stood out from the study is that the government should facilitate and have straightforward programmes aimed at women. This initiative would enable the government to add policies that empower women financially and motivate equal access to financial services for women. </p>
<p>Women should also be helped to become economically empowered and self-sustainable through financial literacy on opportunities accessible for them.</p>
<p>Secondly, there should be sufficient financial aids available for female entrepreneurs. The list includes credit systems, access to loans, financial grants and other financial products. </p>
<p>There should also be equal access to financial services, mentoring and support systems. </p>
<p>Lastly, the government should provide more programmes for monitoring and facilitating women entrepreneurs to help them sustain their businesses. This could be achieved by government departments collaborating with the different networks to ensure constant monitoring and evaluation on the gender mainstreaming programs. </p>
<p>A number of developing countries, particularly India, Brazil, Philippines and Malaysia, have signed gender budgeting programs that track how budgets respond to gender equality and women’s rights requirements. <a href="https://www.afi-global.org/sites/default/files/publications/2018-06/National%20Financial%20Inclusion%20Strategies.pdf">The results have been</a> higher rates of financial inclusion and women becoming active participants in the economic sector. </p>
<p>Gender budgeting leads to financial inclusion because it promotes gender equality in fiscal policy making and administration . </p>
<p>This should be replicated in South Africa.</p>
<p>India has also adopted a range of financial inclusion initiatives. <a href="https://www.researchgate.net/profile/Parul-Agarwal-11/publication/314823121_Financial_Inclusion_in_India_-_a_Review_of_Initiatives_and_Achievements/links/59e2b312aca2724cbfe01abb/Financial-Inclusion-in-India-a-Review-of-Initiatives-and-Achievements.pdf">The Indian government</a> has initiated schemes such as “No-frills Account”. It also created a system to help people access loans and credits. This was implemented to ensure credit applications comply with basic requirements before credit is issued to people.</p>
<p>It has also been pro-active in terms of technology, encouraging mobile banking and branch-less banking. In addition, <a href="https://www.researchgate.net/profile/Parul-Agarwal-11/publication/314823121_Financial_Inclusion_in_India_-_a_Review_of_Initiatives_and_Achievements/links/59e2b312aca2724cbfe01abb/Financial-Inclusion-in-India-a-Review-of-Initiatives-and-Achievements.pdf">financial education</a> is a big part of what’s being done. This is designed to help people understand financial services products.</p>
<p>The success of these strategies has led to greater inclusive development for the women entrepreneurs. As a result, accessibility to finance has boosted the long-term macroeconomic performance for Indian women. Particularly, in low-income areas the initiative <a href="https://www.researchgate.net/profile/Parul-Agarwal-11/publication/314823121_Financial_Inclusion_in_India_-_a_Review_of_Initiatives_and_Achievements/links/59e2b312aca2724cbfe01abb/Financial-Inclusion-in-India-a-Review-of-Initiatives-and-Achievements.pdf">brought benefits</a> associated with greater gender equality and social cohesion in communities.</p>
<p>Similar initiatives could ensure better financial inclusion opportunities for South African women entrepreneurs.</p><img src="https://counter.theconversation.com/content/168121/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tinuade Adekunbi Ojo works as a research fellow for the Department of Politics and International Relations, University of Johannesburg. She is also affiliated with the African Association of Political Science (AAPS). She is a recipient of the Global Stature Award at the University of Johannesburg. </span></em></p>South Africa has a huge gender gap in terms of policies and interventions that would help women entrepreneurs.Tinuade Adekunbi Ojo, Post-Doctoral Research Fellow, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/947452018-05-14T14:47:44Z2018-05-14T14:47:44ZWhy some young women struggle to get the child support grant in South Africa<figure><img src="https://images.theconversation.com/files/214479/original/file-20180412-570-39mqrg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The expansion of the South African welfare system of social grants, in the form of a range of unconditional cash transfers, is one of the success stories of the African National Congress (ANC) government since it was first elected in 1994. </p>
<p>Recent research has suggested that social grants – which include the child support grant, a state pension grant and a disability grant – are critical for household survival in South Africa. One <a href="https://theconversation.com/why-social-grants-matter-in-south-africa-they-support-33-of-the-nation-73087">study</a> estimated that a third of South Africans rely on grants for survival. </p>
<p>Social grants do more than enable the poorest households to survive. The benefits are broad. For instance, <a href="http://opensaldru.uct.ac.za/handle/11090/46">research</a> has shown that children in households receiving the child support grant have better growth and nutrition levels. They are also less likely to engage in <a href="https://www.sciencedirect.com/science/article/pii/S2214109X13701153">risky sexual behaviour</a>. </p>
<p>In addition, social grants have been viewed as a way for the state to “recognise” people historically overlooked by the South African government. Beneficiaries <a href="https://www.tandfonline.com/doi/abs/10.1080/00220388.2012.658371">view</a> the receipt of social grants as a way of connecting with the state.</p>
<p>Yet there are problems with the system. While there has been a rapid expansion of access to social grants, not everyone who should receive grants does; for instance, only <a href="https://bmcinthealthhumrights.biomedcentral.com/articles/10.1186/1472-698X-12-24">an estimated 65%-70%</a> of eligible recipients receive the child support grant.</p>
<p>My colleagues and I wanted to understand young women’s experiences of accessing the child support grant, and what their challenges have been. Our <a href="https://www.tandfonline.com/doi/abs/10.1080/17441692.2018.1449231">research</a> showed that a complex set of relationships between women seeking access to grants, and the systems and processes established to facilitate this, meant it was hard for women to access the grant.</p>
<h2>From pillar to post</h2>
<p>We interviewed 30 young women aged between 18 and 25, from two urban informal settlements in Durban, South Africa. All were eligible to receive the child support grant, but 10 were not, despite having tried. The other 20 described a range of experiences when it came to accessing the grant. </p>
<p>Almost all described the distance and the cost of travelling to the South African Social Security Agency offices to apply for the grant as a major barrier. </p>
<p>One respondent, Nonjabulo (not her real name), said: </p>
<blockquote>
<p>There were problems because we didn’t have money to go to SASSA all the time. My mother is not working and getting transport money was a problem at times. </p>
</blockquote>
<p>Another set of barriers many women reported was a lack of access to vital registration documents: their own identity books, their child’s birth certificate, or their child’s “road to health” card - a document provided by the Department of Health and recording a child’s health information, such as dates for vaccination and growth charts.</p>
<p>Many women described being passed from pillar to post as they tried to get replacement identity documents or a full unabridged birth certificate for their child. As they told their stories, it was evident that this was not a once-off experience. For many it was an ongoing struggle which had started in their mothers’ generation and then continued for them today. </p>
<h2>Shamed and humiliated</h2>
<p>Worryingly, many women described being treated poorly by the agency’s officials when they went to apply for the child social grant. A number reported that officials shamed and humiliated them, asking questions such as “Why did they get pregnant at such an age?” and “Where is your boyfriend?”</p>
<p>These questions not only caused great pain to the women: they were completely unnecessary for the application to receive a child support grant. </p>
<p>The young women felt forced to sit silently and let the officials continue to abuse them because they wanted to receive the child support grant and felt if they objected to the questions and talked back, it would put their grant application in jeopardy. </p>
<p>Families played a mixed role in supporting access to the child support grant for these women. Some relatives were supportive, for instance providing information on the application process or going with the woman to apply. This made the overall process much more bearable. Other women reported a lack of support, saying their boyfriends and relatives were unwilling to contribute to travel costs or otherwise support them.</p>
<h2>Solutions</h2>
<p>The research suggests that a number of important strategies need to be put in place to increase access to the child social grant among young women, who are often those who struggle most to access the grant. There needs to be support for women to receive all forms of vital registration documents. The processes to do this need to be simplified. </p>
<p>There also need to be strategies to reduce the distance applicants have to travel to the agency’s offices. This may include opening offices closer to where the poorest in South Africa live, or shifting existing offices to these areas.</p>
<p>And the agency’s officials need to be trained about interacting with those applying for the child support grant. Treating women who have a right to access the grant in ways that continue to oppress and marginalise them is unacceptable. Such behaviour must be rooted out.</p><img src="https://counter.theconversation.com/content/94745/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Gibbs receives funding from the UK Department for International Development (DfID) programme, What Works to Prevent Violence Against Women and Girls? Global Programme, managed by the South African Medical Research Council. This work was partially funded by the Swedish International Development Agency (SIDA). </span></em></p>Many young South African mothers who deserve to get the child support grant are excluded.Andrew Gibbs, Senior specialist scientist: Gender and Health Research Unit, Medical Research Council, South African Medical Research CouncilLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/784142017-06-06T14:53:37Z2017-06-06T14:53:37ZHow South Africa can fix the fact that one in four of its children go hungry<figure><img src="https://images.theconversation.com/files/172430/original/file-20170606-3677-iy7w6h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Reuters/Siphiwe Sibeko</span></span></figcaption></figure><p>The <a href="http://dhsprogram.com/pubs/pdf/PR84/PR84.pdf">most recent data</a> shows that 27.4% of South African children under the age of five are too short for their age or suffer from stunting. </p>
<p>Children are stunted when they don’t grow at an adequate rate. The <a href="http://www.who.int/childgrowth/en/">World Health Organisation</a> has height standards for various age cohorts and defines stunting as a “height for age” value which is less than two notches below the norm.</p>
<p>Stunting is a measure of chronic hunger and is a long-term indicator of under-nutrition. The survey shows that one in four children go hungry. It reflects the cumulative effects of poor socioeconomic, environmental, health and nutritional conditions.</p>
<p>Nutritional status is important for children both as they develop in their mother’s womb and during the first two years of their life. This is known as the “unique window of opportunity” for their later development. If deprived in this time the damage from this lack of growth is irreversible. </p>
<p>South Africa’s 2016 <a href="http://dhsprogram.com/pubs/pdf/PR84/PR84.pdf">Demographic and Health Survey</a> shows that stunting remains a national concern. At 27.4%, the stunting rate has remained the same since the last survey done in 2003. These are the highest recorded levels in the country.</p>
<p>In the intervening 13 years it was assumed that stunting was on the decline. This was based on other nutrition surveys which showed a drop in the rate. But the demographic survey suggests this is not the case. It shows that child hunger is not improving and may in fact be on the rise again.</p>
<p>We believe that there are two main reasons for the rise in stunting: poverty and malnutrition, which includes the fact that few mothers breastfeed their babies for six months as <a href="http://www.who.int/nutrition/topics/exclusive_breastfeeding/en/">recommended</a> by the World Health Organisation as well the fact that the food they eat offers little nutrition. </p>
<p>Unless these two issues are tackled, South Africa’s stunting rates will continue to rise.</p>
<h2>The problem of poverty</h2>
<p>The demographic health survey confirms the connection between poverty and hunger. Children are stunted because their families do not have enough money to buy them enough healthy food. According to the study, 36% of children in the poorest 20% of households are stunted, compared to 13% of children in the richest 20% of households. </p>
<p>It’s no coincidence that country’s <a href="http://www.statssa.gov.za/?p=9561">unemployment rate is 27%</a>. Unemployed adults cannot feed their hungry children.</p>
<p>To address the issue of poverty and hunger, the South African government introduced a social grant system – which included a child support grant – in 1996. </p>
<p>The grants have had a <a href="https://www.unicef.org/evaldatabase/index_69960.html">positive impact</a> on the lives of poor people. Most poor people spend their additional income on basic needs, starting with food. </p>
<p>The child support grant reaches 12 million children. But the monthly payout of R380 per child is not sufficient to meet nutritional needs. </p>
<p>Research by the <a href="http://foodsecurity.ac.za/working-papers">Centre of Excellence in Food Security</a> has found that grants are put to number of different “uses”, including food, groceries, clothing, education and transport. There are also many “users” including unemployed family members, who do not receive any social assistance from the state. </p>
<p>For the child support grant to have a greater impact on the health of young children, policies that target resources to other members of the household will need to be considered. These include universal grants such as the long proposed <a href="https://theconversation.com/basic-income-for-all-could-lift-millions-out-of-poverty-and-change-how-we-think-about-inequality-53030">Basic Income Grant</a>, or family grants such as Brazil’s <a href="http://www.worldbank.org/en/news/opinion/2013/11/04/bolsa-familia-Brazil-quiet-revolution">Bolsa Familia</a>. </p>
<h2>Malnutrition</h2>
<p>There are other drivers of malnutrition. One is poor childcare practices, such as not breastfeeding infants exclusively for the first six months. </p>
<p>Until recently South Africa had one of the world’s lowest rates of exclusive breastfeeding. The demographic health survey reported that this figure has risen from fourfold, from 8% in 2003 to 32% in 2016. This is extremely encouraging. </p>
<p>But the fact that the nutrition status of children hasn’t improved suggests that other factors are driving South Africa’s malnutrition rates.</p>
<p>Other options may be poor sanitation in dense settlements which result in frequent diarrhoea, or simply not getting sufficient nourishing food both during pregnancy and after being born. </p>
<p>The country can help improve the nutritional quality of food. It produces sufficient food and has adequate scientific knowledge to produce, process and distribute safe and healthy food. </p>
<p>Options already introduced in South Africa include <a href="http://www.foodfacts.org.za/Articles/FoodFortification.asp">food fortification</a> by adding vitamins and minerals, and dietary supplements. Food fortification improves the nutritional quality of the food supply and provides a public health benefit with minimal risk to health.</p>
<p>About 90% of wheat flour and 70% of maize meal on the market is fortified with vitamin A, thiamine, riboflavin, niacin, pyridoxine, folic acid, iron and zinc. </p>
<p>In addition, children can also get a Vitamin A <a href="http://www.adsa.org.za/Portals/14/Documents/DOH/Vit%20A%20policy%20guidelines%20OF%20S%20A%20-%20recent_1.pdf">supplement syrup</a> at the clinic every six months until they are five-years-old.</p>
<p>But the effect of these interventions isn’t being fully realised because many of these programmes have been <a href="http://www.up.ac.za/media/shared/661/ZP_Resources/fsp-research-paper-sa-case-study-22-august-2016.zp96264.pdf">poorly designed and implemented</a>.</p>
<h2>Getting the basics right</h2>
<p>Ultimately children living in poor households need to be supported by adults with jobs. They need caregivers who are not trying to stretch a comparatively small grant over the multiple needs of their families. And they need environments in which food can be safely prepared and consumed.</p>
<p>Bringing food to the mouths of children in South Africa requires action by all parts of society: its elected representatives, employers and food activists.</p>
<p>A convergence of science and policy is what is really needed, along with better cohesion, and better coordination at all levels of government.</p>
<p>The fact that one in every four children in South Africa go hungry should indeed be of national concern. The reality is that if nothing is done about it, it will only get worse.</p><img src="https://counter.theconversation.com/content/78414/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Julian May receives funding from the South African National Research Foundation and the World Bank</span></em></p><p class="fine-print"><em><span>Stephen Devereux receives funding from the National Research Foundation of South Africa and the Newton Fund through the British Council.</span></em></p>Tackling the challenge of stunting in South Africa needs a convergence of science and policy along with better coordination at all levels of government.Julian May, Director DST-NRF Centre of Excellence in Food Security, University of the Western CapeStephen Devereux, Research Fellow, Institute of Development Studies, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/775052017-05-17T19:26:20Z2017-05-17T19:26:20ZKids on social grants are less likely to be obese. They also go to school earlier<figure><img src="https://images.theconversation.com/files/169129/original/file-20170512-3652-3q45ld.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Enrolling children in in pre-school is essential for their development.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/cusd/8208379556/">Flickr</a></span></figcaption></figure><p>Children whose parents or caregivers receive South Africa’s child support grant are less likely to be overweight or suffer from obesity. They’re also more likely to attend pre-school than those whose households don’t get a grant. </p>
<p>These are the key findings from our study, which looked at how children who received the child support grant fared with those who didn’t receive the grant. The study focused on children aged five to 14 years old.</p>
<p>Health, education and an adequate standard of living is central to <a href="https://www.unicef.org/crc/files/Rights_overview.pdf">a child’s development</a>, enabling them to become productive members of society in later years of life.</p>
<p>South Africa’s child support grant is the country’s <a href="https://www.unicef.org/southafrica/SAF_resources_csg2012book.pdf">most successful</a> poverty alleviating intervention. Almost <a href="http://www.childrencount.org.za/indicator.php?id=2&indicator=10">12 million children</a> live with caregivers who receive R380 a month to meet basic needs. These include access to health care, education and an adequate standard of living.</p>
<p>South Africa’s social security system is one of the most advanced and wide reaching in the developing world, similar in range and impact to Brazil’s cash transfer programme. </p>
<p>A large body of evidence has shown the positive effects of South Africa’s social grants. To determine them, our study looked at two measures among children whose caregivers received the grant: their health in the form of their Body Mass Index (BMI), and their enrolment in education. BMI is the measure of body fat based on weight in relation to height. It can be used as an indicator of obesity – <a href="https://www.gems.gov.za/default.aspx?jHVyCDsvs4U4gesx1Tp6ww==">a growing problem</a> in many parts of the world, including South Africa. </p>
<p>We found that children whose caregivers received the grant were more likely to have a normal BMI than those who didn’t and therefore less likely to be overweight or obese. And their caregivers were more likely to enrol them in pre-primary schools than those not receiving the grant.</p>
<p>This adds to the body of knowledge showing that the grant <a href="http://www.ci.org.za/depts/ci/pubs/pdf/general/gauge2016/Child_Gauge_2016-children_count_income_poverty_unemployment.pdf">enables</a> caregivers to make healthier food choices and provides them with the means to send their children to school earlier. </p>
<h2>Disadvantaged children</h2>
<p>Early enrolment in education and obesity are both big challenges in South Africa. </p>
<p><a href="https://theconversation.com/in-south-africa-childhood-hunger-and-obesity-live-side-by-side-43805">Obesity</a> is not only the manifestation of overeating. It can also be caused by eating food that has poor nutritional value and is high in fats and sugar. </p>
<p>Overweight children have a <a href="https://theconversation.com/in-south-africa-childhood-hunger-and-obesity-live-side-by-side-43805">greater risk</a> of developing lifestyle diseases such as type 2 diabetes, hypertension and cardiovascular disease later in life. In South Africa childhood obesity is increasing. More than a quarter of children between the ages of two and 14 years are obese. In our study, 9% of children who received the child support grant were obese compared to 12% who did not. </p>
<p>At the same time, <a href="http://www.dailymaverick.co.za/article/2016-05-17-suffer-the-children-sas-inequality-strikes-hardest-where-it-hurts-the-most/">63% of children</a> younger than 18 live below the poverty line. And <a href="https://theconversation.com/why-child-malnutrition-is-still-a-problem-in-south-africa-22-years-into-democracy-60224">close to 30%</a> of children younger than three are stunted. Stunting is a result of under-nutrition, which in turn hampers the way a child’s brain develops.</p>
<p>Research shows that children living in poverty and who are stunted <a href="http://www.thelancet.com/journals/langlo/article/PIIS2214-109X(16)30266-2/fulltext">go to school later</a>. Our findings show that children whose caregivers received the child support grant were more likely to enrol in early childhood development programmes. </p>
<p>It also found that the impact of the grant on child health and education was evident despite household circumstances such as income poverty and limited access to basic services. </p>
<p>We analysed data collected as part of the <a href="http://www.nids.uct.ac.za/">National Income Dynamics Survey</a>. a government funded study that’s repeated every two to three years. </p>
<p>The findings showed that in addition to the child support grant, other factors also influenced children’s development. For example, basic services such as water and electricity were also linked to the early educational enrolment and better child health. This confirms previous <a href="http://www.hsrc.ac.za/en/departments/education-and-skills-development/timsssa">research</a>. </p>
<p>Our findings are also in line with studies in Latin America about the benefit of the <a href="https://theconversation.com/what-brazil-can-teach-the-world-about-tackling-child-malnutrition-64652">Brazilian Bolsa Familia</a> – a conditional cash transfer programme that requires families to comply with certain health and education conditions before getting the grant. </p>
<h2>Added services are a must</h2>
<p>The South African government has highlighted the importance of access to quality early stimulation, education and care for all children. Our research shows that this is becoming a reality for children who receive the child support grant, with likely positive long-term benefits.</p>
<p>On top of this there’s growing evidence that grants reduce poverty and inequality. This is because they enable money to be spent on higher quality food and school related expenses. This means that children stay in school.</p>
<p>Our study also confirms <a href="https://theconversation.com/what-brazil-can-teach-the-world-about-tackling-child-malnutrition-64652">global evidence</a> that social grants need to be accompanied by basic services to ensure that all children are given the opportunity to develop optimally.</p><img src="https://counter.theconversation.com/content/77505/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Child support grants are an income resource that enables caregivers to make healthier food choices and provide the means to send their children to school earlier.Jenita Chiba, Researcher, University of JohannesburgJacqueline Moodley, Researcher, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/747762017-03-22T14:29:22Z2017-03-22T14:29:22ZSouth Africa’s social grants: busting the myth about financial inclusion<figure><img src="https://images.theconversation.com/files/161982/original/image-20170322-31203-ifd2h9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Financial inclusion has been touted as one of the solutions to addressing poverty in South Africa.</span> <span class="attribution"><span class="source">REUTERS/Siphiwe Sibeko</span></span></figcaption></figure><p>“Financial inclusion” has hit the headlines in South Africa in the wake of <a href="https://theconversation.com/south-africas-grants-debacle-about-political-trickery-not-separation-of-powers-74657">a scandal over the distribution of social grants</a>. Mounting evidence suggests the controversial company at the centre of the storm, Cash Paymaster Services (CPS) and its ancillary firms, targeting grantees to <a href="https://www.dailymaverick.co.za/opinionista/2017-03-07-sassa-saga-how-cps-cross-sells-microloans-insurance-and-services-to-poor-grant-recipients/">“cross sell” other financial products</a>. </p>
<p>The company has consistently denied acting illegally and one of its key investors, Allan Gray, <a href="https://www.allangray.co.za/latest-insights/companies/clarifying-our-position-on-net1/">asserts</a> that no wrongdoing has been formally proven. Significantly, both have invoked the idea that CPS is delivering “financial inclusion” – a term that’s come in for a fair amount of abuse over the past few decades.</p>
<p>“Financial inclusion” <a href="http://www.worldbank.org/en/topic/financialinclusion">typically encompasses</a> providing formal financial services – such as banking, loans and insurance – to poor people who have traditionally lacked access to them. The virtues of financial inclusion have long been an article of faith among policymakers. </p>
<p>But in a country like South Africa which has a relatively poor record of consumer and data protection, and a tradition of <a href="https://mg.co.za/article/2015-07-31-00-mashonisa-debt-systems-slow-erosion">“cowboy capitalism”</a>, it can easily entail little more than “capture”. There’s a great deal of evidence that poor people’s earnings and bank accounts are viewed as fair game for plunder by rapacious commercial interests.</p>
<p>Wages and salaries <a href="https://theconversation.com/obligations-repayments-and-regulations-the-debt-conundrum-in-the-global-south-50162">have been treated in this way</a> for a long time. But the payment of grants directly into bank accounts opens up <a href="http://amabhungane.co.za/article/2017-03-16-serge-belamant-sassa-and-the-war-chest-of-poor-people">new frontiers</a> for exploitation through a range of improper deductions. This include payments for funeral policies, micro-loans, mobile phone airtime and prepaid electricity, to name a few. This ability to “cross sell” to social grant recipients has arguably been the real prize for corporate interests such as CPS. </p>
<h2>Financial inclusion in practice</h2>
<p>Providing access to appropriate and cost effective savings and credit instruments is a laudable developmental objective. But, in South Africa as elsewhere, it’s the actual practice that frequently proves problematic. </p>
<p>The way in which CPS has used its grant distribution contract to extend its ancillary financial offerings is a case in point.</p>
<p>CPS maintains it has acted legally, and indeed an earlier consumer tribunal hearing <a href="http://www.fin24.com/Tech/Companies/Net1-cleared-of-non-compliance-20150508">cleared it of wrongdoing</a>. But increasingly evidence suggests that various subsidiaries of its parent company have used their position to peddle a range of financial products to grant recipients. These practices are enabled by the CPS’s proprietorial grip on the data of 11 million social grant recipients, and its privileged access to the secure monthly flows of welfare payments into grantees’ accounts. The profits from these sales <a href="https://www.dailymaverick.co.za/opinionista/2017-03-12-net1-peeling-away-the-layers/#.WM_a8o4lGRs">exceed</a> the fee CPS receives from the government to distribute the grants.</p>
<p>Even where some of their practices may not have been technically illegal, they remain ethically problematic.</p>
<h2>Financial expropriation and the poor</h2>
<p>Increasingly, “financial inclusion” is a cosy-sounding term masking what economics professor Costas Lapavitsas calls <a href="https://www.soas.ac.uk/staff/staff31299.php">“financial expropriation”</a>. He describes this as the extraction of value, not from employees or productive processes, but from the realm of circulation and redistribution. Individuals and households increasingly serve as a source of profit for the financial system, quite independently of their status or role as “workers”. </p>
<p>CPS’s behaviour is one of many instances of “financial expropriation” in South Africa. In a prelude to the current crisis, two of South Africa’s largest insurers (Sanlam and Lion of Africa) sought to <a href="https://www.bloomberg.com/news/articles/2016-05-02/welfare-kids-funeral-cover-pits-insurers-against-south-africa">directly deduct funeral premiums</a> from social grants paid to minor children. When the state imposed a moratorium on the deductions, corporate interests lodged an appeal in the Constitutional Court, but the state ultimately prevailed. </p>
<h2>Financial service regulation blues</h2>
<p>Excesses and abuses in this space are difficult to regulate, and attempts to do so have often been ineffectual or make matters worse. For example, South Africa liberalised its credit market in the 1990s, lifting the interest rate caps on small loans. The result was that poor people were drawn into formalised credit relations, and the <a href="http://www.journals.uchicago.edu/doi/pdfplus/10.1086/676123">micro-loan industry</a> mushroomed.</p>
<p>Within a decade there was evidence of soaring indebtedness and reckless credit extension. Between the early 1990s and the end of the first decade of the 2000s, <a href="http://www.tradingeconomics.com/south-africa/households-debt-to-income">debt-to-income ratio in the country rose to 86.4%</a>. </p>
<p>These concerns, among others, led to new legislation and the 2007 implementation of the <a href="http://www.justice.gov.za/mc/vnbp/act2005-034.pdf">National Credit Act (NCA)</a>. The act reduced interest rates, but the credit industry soon responded by disguising costs (and profits) in various ancillary charges and costs. One of these, <a href="http://city-press.news24.com/Business/Inside-the-dubious-world-of-credit-insurance-20150816">the frequently mis-sold credit life insurance</a> has, a decade later, been subject to <a href="http://www.sanews.gov.za/south-africa/credit-life-insurance-regulations-published">tighter regulation</a>. </p>
<p>But financial services regulators – caught in an endless cat-and-mouse game with powerful commercial interests intent on profiting from the poor at any price – have often proved ineffectual. </p>
<p>In a recent case, a coalition of public interest lawyers, philanthropic interests and private sector debt counsellors – not regulators – challenged abuses. The case involved contesting the abuse of “garnishee orders” to collect debts directly from bank accounts. The case resulted in a <a href="http://www.groundup.org.za/article/constitutional-court-ends-shady-practice-creditors/">Constitutional Court judgment</a> in which some of the worst practices illegitimately used by creditors for extracting payment were outlawed. </p>
<p>Similarly, the CPS case was brought to the Constitutional Court by not-for-profit organisations, against the state. The court gave CPS another 12 months to <a href="https://www.blacksash.org.za/index.php/media-and-publications/media-statements/1524-black-sash-press-release-the-constitutional-court-judgement-allpay-and-others-vs-sassa-cash-paymaster-services">run the disbursement of social grants</a>. But it will do so under strict surveillance aimed at curbing earlier dodgy practices. </p>
<p>This is an outcome which promises to temper the worst excesses perpetuated on social grant recipients. But powerful vested commercial interests, patchy regulation and enforcement, and uncritical enthusiasm for “financial inclusion”, suggests they may well not be the last.</p><img src="https://counter.theconversation.com/content/74776/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Neves works at a university-based research institute that receives support from a wide range of development and policy research funders. Recent funders have including the European Union, Economic and Social Research Council (ESRC), Department of Science and Technology (DST) and National Research Foundation (NRF).</span></em></p><p class="fine-print"><em><span>Deborah James receives funding from the ESRC.</span></em></p>Entities at the centre of the storm engulfing South Africa’s social grants distribution system have claimed to be champions of financial inclusion. The claim in itself is scandalous.David Neves, Senior Researcher: Institute of Poverty Land and Agrarian Studies, University of the Western CapeDeborah James, Professor of Anthropology, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/746572017-03-15T16:34:42Z2017-03-15T16:34:42ZSouth Africa’s grants debacle: about political trickery, not separation of powers<figure><img src="https://images.theconversation.com/files/160974/original/image-20170315-5344-1xwtpap.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa's Social Development Minister Bathabile Dlamini with President Jacob Zuma.</span> <span class="attribution"><span class="source">GCIS</span></span></figcaption></figure><p>The social <a href="https://theconversation.com/social-grants-crisis-tests-the-powers-of-south-africas-constitutional-court-74630">grants debacle</a> in South Africa throws up a number of questions about the country’s state of politics, governance, leadership and democracy. </p>
<p>A fundamental question pertains to an undertaking made to the country’s Constitutional Court by the South African Social Security Agency (Sassa) that it would take over the distribution of social grants from Cash Paymaster Services <a href="http://www.net1.com/business-structure/transactional-solutions-cluster/cash-paymaster-services-(cps)/">(CPS)</a>, the private company it had contracted to do the job. This followed the court’s ruling that CPS contract was invalid because procurement processes had been <a href="https://www.dailymaverick.co.za/opinionista/2017-03-07-new-sassas-cps-contract-might-be-illegal-heres-what-the-concourt-can-do-to-fix-the-mess/#.WMlK2lV97IV">flouted</a>. Conscious of the catastrophic implications of the declaration, especially on the lives of 17 million recipients, the court <a href="http://www.politicsweb.co.za/documents/sassa-must-rerun-social-grants-tender--concourt">suspended the invalidity</a>. </p>
<p>Sassa, an agency of the Department of Social Development, is charged with the administration of grants. It originally told the court that it would take over the grant payments. It later admitted that <a href="http://ewn.co.za/2017/03/07/sassa-underestimated-work-required-in-grant-payment-takeover">it was not able to do so</a> and would appoint a third party. The political responsibility for the department lies with Social Development Minister Bathabile Dlamini.</p>
<p>Three years ago Sassa indicated that it would have worked out an alternative arrangement within the time frame set by the court. But it is still not ready to take over the distribution of social grants. Ironically, as things stand, for the poor to get their grants in April the only option is CPS. </p>
<p>This begs a number of questions: was Sassa’s undertaking just a bureaucratic machination, with the connivance of the country’s executive authority, to enervate the court’s structural interdict? Wasn’t all this orchestrated to undermine the judiciary and the constitution by trumping justifications for what is sheer incompetence on the part of the Department of Social Development and Sassa? Their argument is that the judiciary cannot appropriate an oversight function over the executive action as this is the purview of parliament. The principle of the separation of powers is invoked to supposedly enhance this argument.</p>
<p>At face value, these narratives look plausible. Lurking beneath, however, is trickery to justify the executive’s truncation of the supremacy of the constitution. This is scary because the poor are caught in a contestation for state power and the country faces the risk of being pushed to a tipping point.</p>
<p>But the bottom line is that judicial intervention – in whatever way necessary to ensure that democracy achieves its substantive ends – becomes a duty in a situation where the political administrative accountability arrangements are weakened and good governance is endangered. </p>
<p>It’s a pity political leaders often don’t seem to understand this. To most politicians, judicial intervention is interference, irrespective of the context and exigency of the situation. The Sassa debacle lays bare this argument which has become a constant refrain of politicians, particularly those wanting to run away from accountability.</p>
<h2>The state’s woefully inadequate response</h2>
<p>The government’s pathetic response to the crisis – from President Jacob Zuma to the minister herself – tells its own story. In a nutshell it has been: if there is a guarantee that grants will be paid in April, what’s all the fuss about?</p>
<p>This is an unfortunate take on the debacle. Writ large in this is the challenge of political illiteracy of those running the state. They see nothing and hear nothing, yet from this vacuity decisions are taken that have pernicious consequences. German poet Bertolt Brecht <a href="https://za.pinterest.com/pin/4433299603597056">warns</a>:</p>
<blockquote>
<p>the worst illiterate is the political illiterate.</p>
</blockquote>
<p>The nation’s angst should have prompted the president to act decisively. In other words, why is the minister of social development still in office? Zuma’s answer to this question was casual. He advised people to <a href="http://www.dailysun.co.za/News/National/watch-cool-down-mzansi-zuma-20170310">“cool down”</a> because the grants would be paid. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/160976/original/image-20170315-5332-urgevc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/160976/original/image-20170315-5332-urgevc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/160976/original/image-20170315-5332-urgevc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/160976/original/image-20170315-5332-urgevc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/160976/original/image-20170315-5332-urgevc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/160976/original/image-20170315-5332-urgevc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/160976/original/image-20170315-5332-urgevc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">People queue to register for government grants in Cape Town, South Africa.</span>
<span class="attribution"><span class="source">EPA/Nic Bothma</span></span>
</figcaption>
</figure>
<p>But this is where the challenge is. The president does not seem to understand that what’s at issue is the failure of state institutions and their leaders to implement a court decision. This puts the supremacy of the constitution at stake. This is what makes the Sassa debacle as much about the distribution of social grants as it is about the constitution.</p>
<h2>Nagging questions of governance</h2>
<p>The debacle also raises a question about whether or not Zuma’s cabinet is in sync. This is because it has pitted ministers against one another, in particular the Minister of Finance Pravin Gordhan and Dlamini.</p>
<p>Gordhan has <a href="http://ewn.co.za/2017/03/14/gordhan-explains-reasons-why-sassa-contact-with-cps-is-unlawful">consistently argued</a> that procurement processes should be followed and respected – precisely the order of the Constitutional Court. But it appears that the crisis has been choreographed to counter this. It has also been used to achieve other nefarious political ends: for example to put the backs of the crusaders of good governance – the court and the National Treasury – against the wall. It also appears that there’s been an attempt to pit the Treasury against the poor in a bid to perpetuate the narrative that it is counter-revolutionary and anti-development. </p>
<p>Behind this lies the contestation for control of state resources. </p>
<h2>Building state capacity</h2>
<p>Beyond the political machinations lies the question: why, in the first place, did Sassa place the distribution of social grants in the hands of a private service provider which did not contribute to building the capacity of the state for this function?</p>
<p>Constitutional law expert Pierre De Vos makes this important point: Sassa privatised a <a href="https://www.dailymaverick.co.za/opinionista/2017-02-21-sassas-mysterious-tardiness/#.WMT36t068ds.email">constitutional duty</a>. </p>
<p>This is at odds with the very concept of empowering and building state capacity. </p>
<p>A number of countries have done this <a href="http://www.canberra.edu.au/researchrepository/file/54918953-a021-0010-af56-e58a766921dc/1/full_text.pdf">through agencification</a> which is considered an alternative to privatisation and a way of optimising public administration while at the same time defending the state from being hollowed out by private interests. It involves the creation of autonomous government agencies that aren’t restricted by the bureaucracy of ministries. Agencification brings “direct accountability and decision-making as close possible to the service delivery point” and enables flexibility in “administrative and <a href="http://www.psc.gov.za/documents/2012/Agencification%20Report.pdf">operational arrangements”</a>. It differs from arrangements where public services are placed in the private hands. </p>
<p>Isn’t this where the focus should be, as South Africa grapples with the Sassa debacle? </p>
<p>Sassa is institutionalised as state agency. But its core business is performed by a private entity while administratively it appears entangled in the political and administrative dictates of the department of social development, fully within the grip of the minister. This sullies its essence as state agency. It conjures up scary images of what Sassa really is: a conduit to siphon state money in the name of those on the margins of society, to “enrich the rich” and <a href="http://www.thethinker.co.za/resources/68%20friedman.pdf">“damn the poor?”</a>.</p><img src="https://counter.theconversation.com/content/74657/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mashupye Herbert Maserumule receivedfunding from National Research Foundation(NRF) for his postgraduate studies. He is affiliated with South African Association of Public Administration and Management(SAAPAM) and is the Chief Editor of the Journal of Public Administration.</span></em></p>South Africa’s social grants fiasco begs the question: was it orchestrated to undermine the judiciary and the constitution and hide sheer incompetence on the part of government?Mashupye Herbert Maserumule, Professor of Public Affairs, Tshwane University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/746302017-03-15T11:14:10Z2017-03-15T11:14:10ZSocial grants crisis tests the powers of South Africa’s Constitutional Court<figure><img src="https://images.theconversation.com/files/160902/original/image-20170315-5321-qm337c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People queue to register for government grants in Cape Town, South Africa.
</span> <span class="attribution"><span class="source">EPA/Nic Bothma</span></span></figcaption></figure><p><em>South Africa’s Constitutional Court is once again being asked to deal with a highly politically charged matter that affects the government of the country. The last time was over the question of President Jacob Zuma’s failure to repay state money spent on his personal homestead at <a href="https://theconversation.com/important-lessons-for-africa-as-strong-institutions-win-out-over-a-strong-man-57182">Nkandla</a>. This time the government’s Minister for Social Development, Bathabile Dlamini, is at the centre of a storm over the payment of 17 million social grants. The contract to do this was given to an independent contractor whose contract expires on March 31. The court ruled in 2013 that the contract was illegal because of tender irregularities and ordered the minister in <a href="http://www.politicsweb.co.za/documents/sassa-must-rerun-social-grants-tender--concourt">2014</a> to make alternative arrangements. She failed to do so and instead has sought to renew the contract. Politics and Society Editor Thabo Leshilo asked Constitutional court expert Pierre de Vos to explain.</em></p>
<p><strong>Why is this case before the constitutional court?</strong></p>
<p>The case is before the Constitutional Court because civil society organisations – the <a href="https://www.blacksash.org.za/index.php/sash-in-action/oversight-of-grant-payment-system">Black Sash</a> and <a href="https://www.dailymaverick.co.za/article/2017-03-07-freedom-under-law-asks-concourt-to-make-new-sassacps-contract-details-public/#.WMj1PVWGPIU">Freedom under Law</a> among them – approached the court to ask it to intervene in the matter to ensure, first, that grants will be paid after April 1st.</p>
<p>Second, they want to make sure that Cash Paymaster Services <a href="http://www.net1.com/business-structure/transactional-solutions-cluster/cash-paymaster-services-(cps)/">(CPS)</a>, the private company contracted to pay out social grants on behalf of the government’s <a href="http://www.dsd.gov.za/">Department of Social Development</a>, will not abuse its position to exploit grant recipients. Specifically, they want the company not to use the information it has about social grants recipients to push all kinds of financial products on them. These products include funeral policies and micro loans. </p>
<p>Third, the civil society organisations want to get the <a href="http://www.constitutionalcourt.org.za/site/thecourt/role.htm">Constitutional Court</a> to oversee the grants payment process to ensure that the South African Social Security Agency <a href="http://www.sassa.gov.za/">(Sassa)</a> and CPS don’t enter into a new contract with terms that will allow CPS to make exorbitant profits. Sassa administers the application, approval and payment of social grants in the country.</p>
<p>As the original contract was declared invalid by the Constitutional Court <a href="https://www.dailymaverick.co.za/opinionista/2017-03-07-new-sassas-cps-contract-might-be-illegal-heres-what-the-concourt-can-do-to-fix-the-mess/#.WMkVS1WGPIU">in 2013</a>, because of an <a href="http://www.heraldlive.co.za/news/2017/03/14/gordhan-says-cps-contract-illegal/">unlawful tender process</a>, and because entering into a new contract with CPS would almost certainly be unlawful because the requisite tender procedures were not followed, it’s important for the Court to validate the new contract to legalise the process. If it fails to do that the grants might still be paid on 1 April, but not in a legally valid manner.</p>
<p><strong>What big legal issues are at stake?</strong></p>
<p>The first issue is: what powers does the Constitutional Court have to fix a situation where the only way to deliver social grants – which the state is obliged to do because of a constitutional obligation – would be through a process that, without court validation, would be unlawful and invalid. </p>
<p>The second legal question is: what are the legal obligations of a private company (CPS) to deliver state grants. The court has already ruled that CPS is an organ of state for the purposes of paying social grants, which means it cannot walk away from the contract like a private party because it is fulfilling much the same function as a government department. This is because it’s delivering social grants to give effect to a <a href="http://www.saflii.org/za/cases/ZACC/2014/12.html">constitutional right</a>. This means that the court may order it to continue delivering grants if it remains the only body capable of doing it – even if CPS doesn’t want to continue and doesn’t make a profit.</p>
<p><strong>What powers does the Constitutional Court have if it’s ignored?</strong></p>
<p>The Constitutional Court depends on other branches of government to implement its orders. </p>
<p>But it can do the following: </p>
<ul>
<li><p>It can issue cost orders against a litigant. In this case, for example, it could order the Minister for Social Development Minister Bathabile Dlamini to pay the cost of the court case from her personal funds. This would be quite extreme but the court could make the case that she had ignored its instructions. </p></li>
<li><p>In the most extreme case it could find a person in contempt of court and can then have them jailed for being in contempt. </p></li>
</ul>
<p>But ultimately the power of the court lies in the hands of citizens who can decide to punish those in power who ignore court orders and flout the law by voting for another party and electing a new government.</p>
<p><strong>What’s the significance of the stand-off?</strong></p>
<p>The stand-off affects the lives of millions of people. More than 17 million grants are disbursed to <a href="https://africacheck.org/factsheets/separating-myth-from-reality-a-guide-to-social-grants-in-south-africa/">adults and children in the country</a>. It is therefore imperative that the crisis is resolved in a way that does not threaten their livelihoods. </p>
<p>But it is also significant because it is testing the power of the court when confronted with political delinquency. Courts are reluctant to challenge the political branches of the state head on. But, in certain circumstances, like the present, the Constitutional Court stands to lose more by trying to avoid a confrontation. Instead, it stands to gain more credibility and legitimacy if it manages to confront the impunity of Sassa and the Minister of Social Development, and if it ultimately manages to ensure that grants are paid in a legally valid way.</p><img src="https://counter.theconversation.com/content/74630/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Pierre de Vos receives funding from National Research Foundation - funds granted automatically as an NRF rated researcher. </span></em></p>South Africa’s Constitutional Court is in a fix. The only way to deliver social grants that support millions would be through a process that’s without validation, would be unlawful and invalid.Pierre de Vos, Claude Leon Foundation Chair in Constitutional Governance, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/743762017-03-13T15:42:14Z2017-03-13T15:42:14ZSouth Africa’s social grants system: there’s more than just money at stake<figure><img src="https://images.theconversation.com/files/160453/original/image-20170313-19247-ibs1fu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The social grants disbursed to millions of South Africans helps entire households.</span> <span class="attribution"><span class="source">Reuters/Philimon Bulawayo</span></span></figcaption></figure><p>In South Africa social grants address key social determinants of health such as food insecurity, access to health services, income and early childhood development. About <a href="https://africacheck.org/factsheets/separating-myth-from-reality-a-guide-to-social-grants-in-south-africa/">17 million South Africans</a> receive social grants every month. Of these, about 12 million are children in receipt of the child support grant. </p>
<p>For many households, the child support grant and the old age grant are the only forms of predictable income that they rely on. </p>
<p>While many in the medical profession – as well as beneficiaries - have long bemoaned the inadequacy of the child support grant to meet even the most basic needs of its beneficiaries, such as <a href="http://foodsecurity.ac.za/Media/Default/Publications/Final_Devereux%20%20Waidler%202017%20-%20Social%20grants%20and%20food%20security%20in%20SA%2025-Jan-17.pdf">adequate nutrition</a>, there has never been any doubt that it’s indispensable to millions of households across the country.</p>
<p>The South African government has allocated R151.6-billion to social grants in its 2017/2018 budget. There are four main grants that are disbursed under the system: an old age grant for pensioners over the age of 60 of US$ 120 (R1600) and for those over 75 a grant of US$ 122 (R1620); a disability and care dependency grant of US$ 120 (R1600); a foster care grant of US$ 69 (R920), and child support grant of US$ 28 (R380) a month for children under the age of 18.</p>
<p>The importance of South Africa’s grants system is worth revisiting in the wake of a crisis unfolding over their disbursement. The country’s Constitutional Court ruled 3 years ago that the contract of the current service provider Cash Paymaster Systems was illegal – and the Department of Social Development which the South African Social Security Agency falls under, needed to find a new service provider. It has failed to do so, placing the disbursements of the grants in jeopardy. </p>
<p>The child support grant and the old age pensioner’s grant make up by far the biggest allocation. Should they not be disbursed, many households will lose the only source of income they have. The impact on households would be profound. </p>
<h2>Why the grants matter</h2>
<p><a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4536939/">Evidence</a> shows that the child support grant <a href="http://foodsecurity.ac.za/Media/Default/Publications/Final_Devereux%20%20Waidler%202017%20-%20Social%20grants%20and%20food%20security%20in%20SA%2025-Jan-17.pdf">not only supports children</a> within a household. In most instances, it has to help everyone in the household. </p>
<p>Mothers and caregivers use it to buy food, pay for school fees and other school related costs as well as health care. This includes transport to clinics or hospital, and for purchasing medication. </p>
<p><a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4536939/">Research</a> also shows that it <a href="http://www.childwatch.uio.no/publications/research-reports/gender-dynamics.html">enhance women’s agency</a>, allowing them to mitigate financial crises and access reciprocal exchange networks for informal credit and swapping of food. </p>
<p>The importance of the child support grant becomes ever more salient when one listens to the stories of those who – though they are eligible – are not in receipt of the grant. </p>
<p>Anecdotal evidence in my research has shown that children who don’t receive the grant experience extended periods of hunger, have difficulties accessing health care services especially in remote areas where facilities are far, and have problems meeting school-related expenses.</p>
<p>The old age grant is about four times the amount of the child support grant. Despite the fact that the beneficiaries are the elderly, the grant is used to care for entire households, essentially bearing the burden and closing the gap created by high rates of unemployment in the country. </p>
<p>It’s also associated with <a href="http://economics.mit.edu/files/732">improved nutritional outcomes</a> for children in poor households. </p>
<p>Taken together, these two grants are doing the work of government in South Africa: providing for those who have been left out in the cold.</p>
<h2>Catastrophic consequences</h2>
<p>Any threat to the distribution of the grants would have catastrophic consequences for individuals and households across South Africa. Households will lose the only source of income they have. Children and adults alike will go without food. Some children who live in remote rural areas far from health facilities will miss important immunisation visits at the clinics.</p>
<p>The most vulnerable people in society and those who need the help of the government most face the biggest risk to any threat to their disbursement.</p><img src="https://counter.theconversation.com/content/74376/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Wanga Zembe-Mkabile has received funding from the National Research Foundation, the National Department of Health and the Centre of Excellence for Food Security. She is also a member of the People's Health Movement and a board director at the Southern African Social Policy Research Institute NPC.</span></em></p>Should South Africa’s social grants not be disbursed, many households will lose the only source of income they have.Wanga Zembe-Mkabile, Specialist Scientist, South African Medical Research CouncilLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/743252017-03-10T08:52:27Z2017-03-10T08:52:27ZSouth Africa’s grant scandal exposes myths about how the state should run things<figure><img src="https://images.theconversation.com/files/160286/original/image-20170310-3696-12kel8h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africans waiting in line to register for social grants.</span> <span class="attribution"><span class="source">EPA/Nic Bothma</span></span></figcaption></figure><p>The social grants <a href="https://theconversation.com/the-real-risks-behind-south-africas-social-grant-payment-crisis-73224">scandal</a> rocking South Africa has been greeted with understandable shock. It’s also challenged two popular ideas about how government should operate. </p>
<p>The first is that public-private partnerships <a href="http://www.ppp.gov.za/Pages/whatisppp.aspx">(PPP)</a> are efficient. The second is that national government is better at running things than provincial government (the equivalent of states or counties).</p>
<p>Both are so widely supported that they seem obviously true – but in the wake of the social grants’ saga their truth now seems far less obvious. Both are implicated in an unfolding scandal which threatens to disturb payment of social grants to about 17 million South Africans who depend on them.</p>
<p>The idea that PPPs are efficient needs another look. The principle behind them is well known. Because the government lacks the capacity to perform some of its functions, it needs the expertise of private, for-profit, companies who have the ability to do what it can’t, presumably because they wouldn’t be in business if they didn’t. </p>
<p>The second truism under a cloud is the view that, if you want something in government done, you must take it away from the provinces that are wasteful and incompetent. It’s firmly believed across the spectrum: even critics of national government often assume that, if there’s any chance people will be effectively served, it rests with the centre, not the provinces.</p>
<p>The unfolding social grant crisis has come to prove that these widely held assumptions could be misplaced.</p>
<h2>Public Private Partnerships</h2>
<p>At first glance the PPP model sounds like a classic ‘win-win’: government gets the expertise it needs while the private provider expands its business. Citizens also win because they get the service they need. What, besides ideology, could possibly prompt anyone to object? </p>
<p>Court <a href="http://www.heraldlive.co.za/news/2017/03/08/constitutional-court-wants-answers-sassa-department-payment-grants/">proceedings</a> confirm that the PPP between the government and <a href="http://www.net1.com/business-structure/transactional-solutions-cluster/cash-paymaster-services-(cps)/">Cash Paymaster Services</a>, the company contracted to distribute the grants, may have worked for both parties – but not for millions of grant beneficiaries. The private partner received more than its fee for distributing each grant. It also used its position to <a href="https://theconversation.com/the-real-risks-behind-south-africas-social-grant-payment-crisis-73224">market services</a> provided by a network of subsidiary companies: funeral policies, microloans, smart cards, airtime and insurance. </p>
<p>It’s also <a href="http://probonomatters.co.za/who-is-responsible-for-the-sassas-epic-social-grant-distribution-disaster/">claimed</a> that grant recipients are bombarded with sms messages selling these products. If they bite, the money is deducted from their grants. The company denies this but confirms that it uses its position to sell services. </p>
<p>Using PPPs to market products to a captive audience who may well believe that what they are being asked to buy has official sanction is not what the advocates of PPPs have in mind. The social development department and the South African Social Security Agency (<a href="http://www.sassa.gov.za/">SASSA</a>) did nothing to ensure that the poor and vulnerable were protected and so it’s not clear in what way this was a partnership. It seems more like a takeover by the private provider.</p>
<h2>The public interest</h2>
<p>This doesn’t mean that all PPPs should be tarred with the same brush: there clearly are cases in which government can increase its capacity by working with private providers. </p>
<p>But it does show that PPPs are not a guaranteed cure for government incapacity: unless government has the capacity to ensure that these arrangements serve the public, they are not partnerships, but surrenders to private interests. </p>
<p>Without the necessary controls, PPPs may do more to help the government and businesses than to serve citizens: since much corruption in this country stems from collusion between public and private actors at citizens’ expense, corruption could be seen as a particular popular type of PPP. </p>
<p>The capacity which governments need to ensure that PPPs are in the public interest is the ability to assess citizens’ needs and to ensure that the agreement will meet them. This requires an understanding of what citizens want and the will and ability to negotiate terms which will give it to them. Social Development and SASSA seemed to lack either the will or the ability to do either.</p>
<p>This should challenge the simplistic idea that, to do its job, government need simply call in private providers. PPPs will not achieve their stated purpose if they are buck-passing exercises: the government is still responsible for the service and it’s failing the public unless it can ensure that its private partner really is meeting the needs of citizens.</p>
<h2>The role of provinces</h2>
<p>Before SASSA was formed, social grants were distributed by provinces. In the Eastern Cape in particular, grants weren’t paid efficiently and the courts were forced to intervene. It was widely assumed that this showed the dangers of assigning grants to provinces – a single national distribution agency would, it was assumed, solve the problem.</p>
<p>SASSA was created in 2005. Twelve years later, it still lacks the capacity to distribute grants itself or to negotiate terms with the private provider which protects beneficiaries. While grant distribution seems more efficient, beneficiaries are now subject to commercial pressures they did not face when provinces distributed grants. The shift hasn’t been the magic bullet the country was promised.</p>
<p>There was, to be fair, one good reason for changing the provinces’ mandate to distribute grants. The amount to be paid and who was eligible for grants was fixed by national government – the provinces had no say. But provinces don’t levy taxes and so they receive a fixed sum from which they must fund all their obligations. Grants were a large and growing expense and, whenever they were raised, provinces had less to spend on their other needs. A system in which a government entity must provide a service but has no control over what it costs is unfair and unworkable.</p>
<p>But this problem need not have been solved by creating a single grants agency: provinces could have been given separate funding for grants so that other budget items were not affected. </p>
<p>The problems in the provinces are not an illusion – the bad press is often justified. But the SASSA case shows that they are not necessarily solved by taking provinces out of the equation.</p>
<p>Incompetence, patronage and indifference are not a provincial monopoly: which sphere of government provides a service may be less important than whether citizens have the muscle to ensure that it works for them. There’s no reason why this should be easier at a national than a provincial level (it is easier for organised interest groups to influence government at national level, but that doesn’t make citizens any more powerful). </p>
<p>Centralising government functions creates the illusion of greater effectiveness because it makes it easier to issue orders from the top. But it gives no guarantee of greater effectiveness: the orders may be no more reasonable and they may be ignored.</p>
<p>Fixing government is about increasing citizen power and ensuring that officials and politicians are more accountable. It’s not about shifting services to national level in the forlorn hope that officials will push buttons and all good things will follow. </p>
<p>In both cases, the ‘obvious’ needs another look. Bringing in private providers and excluding provinces are not automatic gateways to better government. The social grants scandal shows that improvement requires creative thinking, not relying on truisms which are less true than they seem.</p><img src="https://counter.theconversation.com/content/74325/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Steven Friedman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>South Africa’s social grant scandal seems to back up highly regarded views on public governance that Public Private Partnerships aren’t naturally efficient.Steven Friedman, Professor of Political Studies, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/730872017-02-16T09:23:30Z2017-02-16T09:23:30ZWhy social grants matter in South Africa: they support 33% of the nation<figure><img src="https://images.theconversation.com/files/156969/original/image-20170215-27421-g4c06m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Thousands wait in line outside the social services office in Cape Town to register for grants.</span> <span class="attribution"><span class="source">EPA/Nic Bothma</span></span></figcaption></figure><p><em>The South African government’s failure to fix a <a href="http://www.news24.com/Archives/City-Press/AllPay-wins-against-Net1-20150429">corrupted</a> R10 billion social grant payment contract has caused a crisis that <a href="https://www.dailymaverick.co.za/article/2016-11-14-sassa-social-grants-distribution-doomsday-and-behind-the-scenes-move-to-save-17-million-grants/#.WKRhXG997IU">threatens</a> to disturb monthly payments to millions of vulnerable households. The Conversation Africa’s business and economy editor Sibonelo Radebe asked Jannie Rossouw to explain what’s at stake.</em></p>
<p><strong>What would be the impact if social grants weren’t paid?</strong></p>
<p>It would have a severe impact on poor and vulnerable households. In the 2017/18 fiscal year there will be some <a href="https://www.dailymaverick.co.za/article/2017-01-27-groundup-sassa-grants-contractor-may-have-to-pay-back-the-money/#.WKVakm997IU">17 million</a> grant beneficiaries, 11 million of them younger than 18. </p>
<p>But it’s important to note that the number of dependants exceeds the number of social grant beneficiaries by a considerable margin. In most cases grants, <a href="http://www.sassa.gov.za/index.php/social-grants">which include</a> pensions, disability payments and child support grants, support entire households. These households will be destitute if they do not receive grant payments in a timely fashion. They will not be able to buy food as households receiving grants typically don’t have savings. To survive they have to spend whatever they receive. </p>
<p>This is why both the Minister of Social Development, Bathabile Dlamini, and her department have been highly irresponsible for leaving the distribution problem in limbo for so long. This even after they were <a href="http://www.news24.com/Archives/City-Press/AllPay-wins-against-Net1-20150429">instructed</a> by the Constitutional Court to make alternative arrangements. It leaves the impression that the minister and her department want to force the country into a crisis, leaving no option but to get approval to continue using the current service provider.</p>
<p>Neither the minister nor the department have shown any urgency to bring this matter to a speedy resolution. It’s also disconcerting that the minister seems to live in denial. She’s failed to admit that there’s a pending crisis of national proportions.</p>
<p>The minister should take political responsibility for this crisis. If she refuses to accept responsibility, it raises the question of whether the ministry she runs is needed at all or can be merged with another ministry, as its largest single responsibility is oversight of the legal administration and payment of social grants.</p>
<p>It is also disconcerting that others in leadership positions in the government have remained quiet. In any other country the head of state would have stepped in to try and defuse the looming crisis. But it seems that expecting any action from President Jacob Zuma in a crisis – except if he stands to gain personally – is too big an ask.</p>
<p><strong>Why are social grants so important in South Africa?</strong></p>
<p>They’re very important because of extent of poverty, the consequent number of recipients, and the amount paid out. Total expenditure on grants in the 2017/18 financial year will amount to more than <a href="http://www.treasury.gov.za/documents/national%20budget/2016/speech/speech.pdf">R150 billion</a>. </p>
<p>Grant money is not only used to support beneficiaries. It’s also used to provide broader support. Based on <a href="http://www.ajol.info/index.php/na/login?source=%2Findex.php%2Fna%2Farticle%2Fview%2F142070%2F131811&loginMessage=payment.loginRequired.forArticle">research I conducted</a> more than one-third of South Africans depend – directly and indirectly – on grant payments. Any disruption of grant payments will therefore have a massively detrimental impact on a large number of poor households. </p>
<p>In addition, the economies of small towns and villages would be hit hard because they are heavily dependent on grant payments being used to buy goods and services in local shops. One knock on effect would be that shop owners’ income streams would be affected and they wouldn’t be able to pay employees’ salaries.</p>
<p><strong>What impact have social grants had on poverty alleviation in South Africa?</strong></p>
<p>Grant payments redistribute income to poor households and have contributed to a <a href="http://sds.ukzn.ac.za/files/WP%2058%20web.pdf">reduction in poverty</a> in South Africa. </p>
<p>The social grant net is the government’s biggest poverty alleviation and redistribution intervention. There are others, such as government housing provision and free water allocation. But payments in grants outstrip these by a large margin.</p>
<p><strong>What are the weaknesses in the system?</strong></p>
<p>The main weakness is the fact that the grant system was expanded during a period of rapid economic growth. In 2002 South Africa only had some <a href="http://www.plaas.org.za/sites/default/files/publications-pdf/Woolard_McEwen.pdf">4,2 million</a> beneficiaries of social grants.</p>
<p>This grew rapidly to about 17 million beneficiaries as the grants were expanded to include older children.</p>
<p>Because South Africa was going through a period of rapid economic growth at that time it could easily afford new spending initiatives and projects.</p>
<p>But since 2008 the country has suffered a period of low economic growth. And there isn’t any expectation that the situation is likely to improve in the foreseeable future. As a result the system has become unaffordable.</p>
<p>An additional concern is that the Minister of Social Development has suggested there may be an extension of child support grants. This is simply <a href="http://city-press.news24.com/Business/Are-we-heading-for-a-fiscal-cliff-20151011">unaffordable</a> and will push South Africa closer to the fiscal cliff – the point at which its spending outstrips its revenues and it can’t meet its debt obligations.</p><img src="https://counter.theconversation.com/content/73087/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jannie Rossouw is an NRF-rated researcher and receives research funding from the NRF. </span></em></p>The unfolding social grant payment crisis in South Africa threatens the livelihoods of a third of the country’s population.Jannie Rossouw, Head of School of Economic & Business Sciences, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.