Third of South Africans have no income

A third of South African adults have no cash flow income, relying on cash transfers from friends and family alongside social grants to survive every month. 

This was revealed in a report from the Bureau of Market Research (BMR), which indicated that the majority of South Africans are experiencing significant financial difficulties. 

The BMR’s Professor Carel van Aardt told Newzroom Afrika that over 50% of the population is below the poverty line due to the country’s economic stagnation. 

The poverty rate in South Africa has been steadily increasing over the past two decades, resulting in higher levels of social and political instability. 

This exacerbates income inequality in South Africa, which is already the highest in the world. Furthermore, a high poverty rate means the country’s population is highly vulnerable to economic shocks. 

The BMR’s report showed that 73% of South Africans earn less than R6,000 monthly, while over 30% have zero income. 

Thus, nearly a third of the country relies on social grants or support from friends and family who are also experiencing financial hardship. 

Over 18 million people currently rely on government social grants, which Van Aardt pointed out as financially unsustainable for the government. 

Increasing financial pressure has resulted in significant changes to the spending habits of South Africans, with many shifting expenditure away from luxury goods and entertainment to basic foodstuffs. 

This has been exaggerated by elevated food inflation, which has resulted in food taking up a more significant portion of South African household budgets. 

Van Aardt said financial hardship also forced many South Africans to find alternative income sources through ‘survival entrepreneurship’ in the country’s informal economy. At the same time, a small proportion turns to criminal activity. 

The country’s high unemployment rate is the primary driver of income inequality and financial vulnerability. 

Van Aardt estimated the country lost two million jobs during the Covid-19 pandemic and subsequent lockdowns. 

While many of these jobs have been recovered, most are lower paying than pre-pandemic and less stable. 

Despite this, incomes have grown in South Africa over the last two years, with a significant increase of 8.7% in 2022. 

However, most of this came from investment growth and not compensation growth which disproportionately benefits the wealthy, further exacerbating inequality. 

Lower-income groups have seen their compensation stagnate, along with social grant payments.