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Living Conditions Are Steadily Improving

When it comes to ‘people-centred’ development … there has been so much knowledge, so much policy, so much agreement on what needs to be done, and so little to show for it.4

– Benjamin Bradlow, Clifford Shearing and Joel Bolnick

In the 2014 election, the ANC campaigned on a short, powerful message: ‘we have a good story to tell’. It was a devilishly effective slogan, perfectly framing the myth of slow but steady progress since 1994. It conveyed the mistaken idea that life was improving for all South Africans; things weren’t perfect, but they were getting better each day. If we were patient, sooner or later we’d reap the abundant benefits of democracy. Sadly, this just isn’t true. This chapter attacks the long-held assumption that living standards have improved dramatically since apartheid. It argues that South Africa made unacceptably slow gains in the first decade of democracy, and that in the second it regressed. I do this by first examining economic indicators like poverty, inequality, and unemployment. Since 1994, these indicators have all worsened. I then turn to service delivery, focusing on housing, water and sanitation, and electricity, and show that there has been inadequate progress in these fields. While there are potential objections to these arguments, to my mind too much use has been made of meaningless definitions of ‘progress’ that don’t focus on tangible change.

The economy

There’s no way to sugar-coat it: since 1994, inequality, unemployment and poverty have been on the rampage. Let’s begin with inequality. South Africa is now the most unequal economy in the world. In 1994, South Africa and Brazil vied for this ignominious honour. Their Gini coefficients5 – a measure of income inequality – were both around 0.60 (1.0 indicates one person owns all the wealth). In the following twenty years, Brazil managed to lower its coefficient to 0.52, while South Africa’s grew to between 0.63 and 0.69.6 Today, the share of total income owned by the top 1% is higher than it was in the late colonial era.7

If income inequality is worrying, wealth inequality is downright grotesque. Recent investigations into South Africa’s tax system illustrate the malaise. Whereas the top 10% of income-earners make 50–60% of all income, the top 10% of wealth-earners own 90–95% of all wealth.8 Even the so-called middle class owns very little wealth: although they earn 30–35% of all income, they only own 5–10% of all wealth. As economist Anna Orthofer explains: ‘while there may be a growing middle class with regards to income, there is no middle class with regard to wealth: the middle 40% of the wealth distribution is almost as asset-poor as the bottom 50%.’9 In other words, the poorest 10% of South Africans have no detectable wealth whatsoever. Put simply, wealth inequality in South Africa dwarfs income inequality, which is already the world’s worst:

Although the top income shares are very high in their own right, they pale in comparison with the top wealth shares. Compared to income, wealth is much more concentrated in the hands of the few. Whereas the Gini coefficient is 0.69, the wealth Gini coefficient is 0.9 to 0.95 – again the most abject in the world.10

This leads Piketty to lament:

Now that we are 25 years after the fall of apartheid, we are all puzzled by the fact that inequality is not only still very high in South Africa, but has been rising and, in some way, income inequality is even higher today than 20 years ago, which is extremely puzzling for all of us.11

Like income disparity, wealth disparity assumes racial dimensions. The radically disproportionate share of South African wealth is still in a small group of mostly white hands. Wealth disparities among the white population are also significantly lower. On the other hand, wealth disparities inside black and coloured communities are high, given that few have seen tremendous wealth while the clear majority languish in landlessness and poverty. Incredibly, 80% of the black population owns no measurable portion of South African wealth.12

Compounding this is the unemployment crisis. In the first quarter of 2016, narrow unemployment13 was 26.7%, the highest since the system of collection started in 2008.14 This record only lasted until the third quarter of 2016, when unemployment reached 27.1%.15 That record was broken again in the first quarter of 2017 – Stats SA’s latest quarterly labour force survey shows that unemployment had reached 27.7%, the highest on record since 2003. Indeed, in the decade since 2006, unemployment actually rose, remaining at the stubbornly high rate of 25% for five years. This missed government’s own targets by a mile. The so-called New Growth Path (NGP), one of three competing economic policy blueprints for South Africa’s economy, promised to initiate 6–7% annual growth by 2020.16 In the process, it vowed to create five million jobs and reduce narrow unemployment to only 15%.

The National Development Plan (NDP), launched a year later, set similarly lofty targets. This time, the annual growth target was 5% leading to 2030, with the creation of 5–6 million jobs.17 Miraculously, these jobs would come from different places compared to the NGP. Whereas the NGP saw jobs coming from infrastructure and large industry, the NDP focused on small businesses serving the domestic market. Despite this, South Africa’s unemployment situation has declined since the announcement of both plans, and remains worse than it was in 1994: ‘unemployment, using the expanded definition, has actually risen from 31.5% recorded in 1994 to almost 36% in 2014’.18 Worse still, youth unemployment is at the eye-watering level of nearly 65%.19 The same is true for poverty. In a report issued by Stats SA in 2015, a rebasing of poverty levels contradicted earlier, optimistic census data. Poverty is measured in three incremental bands: first, the ‘food poverty level’ measures people’s ability to buy the equivalent of the minimum caloric intake necessary to sustain human life; second, the lower-bound poverty level is when a person splits income between food and minimal non-food expenses. Finally, the upper bound assumes that people don’t sacrifice any food expenditure to meet their basic needs. All levels of poverty are negative and mean that people are unable to sustain minimally decent lives.

In 2011, government celebrated ‘decreasing’ extreme poverty to ‘only’ 20.2%. After Stats SA reviewed the cost of living, South Africans were startled to learn that the already devastating figures were underestimated. Instead of 20%, it emerged the figure was closer to 21.7%.20 To put this in perspective, that’s a million more living below the breadline than initially thought. Clearly, people need more than just food, which is why the measure is called ‘extreme poverty’. But the story worsened when the upper-bound poverty line was also underestimated: instead of being at 45% in 2011, it was over half the population at 53.7%.21 This is a staggering figure: more than half the South African population lives in poverty, two decades after ‘freedom’. That’s about 27 million people.

What about economic growth? Under Zuma, it was tepid for the first term; anaemic in the second. But government is neither willing to admit failure, nor change course. Instead, it argues that ‘global forces’ have blunted South Africa’s growth prospects. This is totally disingenuous. First, the South African government announced its economic plans well after the 2008 global economic meltdown. It knew full well the global economic climate when it made glossy promises in the elections of 2009 and 2014, and it has known these conditions ever since. Second, other economies more directly affected by the global economic crisis – not least the United States – have grown faster and reduced unemployment quicker than South Africa. Developing economies in Africa and elsewhere have recovered and prospered while South Africa has lagged.22 There have certainly been global headwinds since 2008, but the overwhelming blame for South Africa’s economic morass lies squarely at the door of our own government.

Government also argues that economic progress needs more time. Again, this is disingenuous. In the 21 years between 1994 and 2015, South Africa’s real GDP per capita increased by a relatively modest 31%, from $4 520 to $5 917. Let’s compare what other countries have achieved in similar periods. In 21 years, Malaysia expanded GDP per capita by 119% between 1965 and 1986. Singapore did it by 324% in the same period. Since 1984, Vietnam has expanded GPD per capita by 166%. Namibia’s economy between 1990 and 2011 outpaces South Africa’s, with GDP per capita growth of 53%.23 There are many other examples. So, the notion that South Africa could not have moved any faster is clearly unfounded. It’s time we looked facts soberly in the face: whether it’s unemployment, poverty, inequality or economic growth, South Africa has drastically underperformed since 1994. In the next section, we examine South Africa’s record at delivering basic services, especially to its poorest people.

Service delivery

In 2014, then Minister of Human Settlements, Lindiwe Sisulu, admitted that ‘the delivery of houses has dropped drastically across all provinces, some reaching lows of a 30% drop in delivery’.24 She continued, ‘this, we have been informed, is due to a number of what my officials call “blockages in the pipeline”, whatever that means’.25 Sisulu was reflecting on a particularly bad year, but the story was all too familiar. For the entirety of the Zuma era, government has consistently failed to meet its own housing targets. According to the Studies in Poverty and Inequality Institute, government has targeted 200 000 houses per year since 2010.26 But, every year, it has failed to meet its expectations by about 100 000 houses. More puzzling is the attendant problem of underspending, another phenomenon that accelerated under Zuma. In the 2009–10 and 2010–11 fiscal years, underspending by the Department of Human Settlements was in the order of 13%, already alarming considering the dire need for housing in South Africa. But in the following two years, underspending shot up to 34% of the proposed budget, or approximately R5bn.27

Moreover, government has failed to reduce the percentage of people living in informal dwellings, which remained roughly constant between 2004 and 2012.28 The problem goes deeper than this: government’s housing failures have reinforced apartheid spatial planning. Today, housing policy is based on a rigid distinction between shacks (informal dwellings) and ‘formal houses’. Government’s policy mantra is therefore to ‘build houses and eradicate shacks’. But this creates a perverse incentive to evict shack-dwellers. Moreover, formal houses are just new townships on the outskirts of cities, which residents don’t own. Instead, as in colonial times, citizens in desperate need of housing are only allowed to occupy government houses, unable to convert them into assets:

For more than a decade, the state has turned informal settlements into illegal built environments. It has then tried to address these informalities and illegalities by governing them through institutional arrangements that blame poor people for the failures of the state, punishing them through evictions and relocations to newly constructed slums and still sub-standard housing stock.29

Another crucial pillar of service delivery is sanitation, also a disappointment since 1994. Over the last 23 years, access to an improved water source has only increased by 10%, from 83.4% to 93.2%.30 This is below Botswana and Brazil, who have reached the high 90s. The reason for South Africa’s inability to reach adequate water access is a systemic inability to focus on the excluded sectors of the economy. Apartheid geography – strengthened by ANC policies – has made excluded areas hard to service. As a result, the public health crises hit the poor hardest. Whereas we would have expected a steady increase in life expectancy since the end of apartheid, systemic failure to deliver services and the HIV/AIDS crisis led to a dramatic fall between 1994 and 2014: life expectancy went from 61 to 57 in the first decade of democracy.31 Again these figures were below comparator countries, like Botswana and Brazil, by significant margins.

The same is true of water rights. Since 1994, the government has done too little to overturn old water rights laws, which trace their origin to the 1913 and 1936 land acts. These acts allocated water rights like land rights: white farms had them, but people in the former homelands didn’t. After the Water Act of 1998, little was done to interrupt these relations, largely because of heavy lobbying from financial and agricultural interests.32 As a result, water use can’t be collateralised as an asset by at least twenty million South Africans. By contrast, commercial agricultural ventures are able to capitalise on the private ownership of water rights.33 As such, many black South Africans, especially those gendered as women, don’t own or control their access to water. Moreover, poor water governance led to water restrictions in 2016 in major South African cities. Government claimed restrictions were due to drought, but this is not entirely accurate. While drought exacerbated the crisis, consultants have warned for years that water infrastructure has received shocking levels of attention and chronic levels of underinvestment.34 As water consultant Wiero Vogelzang recently told Reuters: ‘Many water and waste water treatment works, pipelines, pump stations and reticulation pipe networks are in dire need of rehabilitation if not past their “sell by” date.’35

Electrification is another so-called ‘major success’ since 1994. But challenges since 2008 also show stagnation in this area. Unable to improve and maintain critical infrastructure, the country has faced rolling blackouts in four years of the last eight. As a result, the economy has taken a pounding: economist Peter Montalto likened the effects of load shedding over this period to the loss of a major industry.36 In a study of the economic effects of load shedding, Chris Yelland estimates that one month of Stage 1 load shedding costs the South African economy about R20bn. Stages 2 and 3 respectively cost R40bn and R80bn per month. All this could have been avoided. In 1998, the Department of Minerals and Energy warned generating capacity would reach its limit unless ‘timely steps were taken to ensure that demand does not exceed available supply capacity’.37

In April 2016, then Eskom CEO, Brian Molefe, announced to great fanfare that load shedding was ‘a thing of the past’. But this hid the 5% fall in electricity demand in 2016, giving Eskom breathing room to perform much-needed maintenance. The break in load shedding was also because of load curtailment, where large industries reduce their energy load to ease the electricity burden.

In fairness, one of South Africa’s major successes since 1994 is hardly ever touted: a dramatic improvement in our renewable energy production. In perhaps government’s most successful project in the Zuma era, the REI4P programme has succeeded in increasing the amount of use that South Africa gets from renewable energy. Launched in 2011, REI4P is on track to provide approximately 17.8GW of electrical power by 2030. To put this in perspective, the current number of MW gained from renewable sources is currently 6.9MW, and current coal production is about 40MW. This shows what could be done if South Africa lived up to its promise.

Despite all this evidence, figures on poor service delivery don’t paint the full picture. First, they don’t tell us how services are distributed across different segments of the population. To say that 80% of people have access to sanitation may still mean that 50% of very poor people don’t. We simply don’t have rich enough data on how the poorest – and most needy – segments of the population are experiencing services. What we do know is that they are experiencing worse delivery than average, which is already dire. Second, the statistics don’t tell us about the state of maintenance. Government may well have installed a pipe; that doesn’t guarantee it works. Current figures also don’t reflect the response of government to ad hoc problems, nor do they expose the high cost of many basic services: even where services are available, they may be unaffordable.38 Furthermore, some service delivery is the product of the ingenuity of citizens. Across the country, people have dug their own boreholes, connected themselves illegally to the grid, and paved their own makeshift roads. Bradlow highlights this in the case of housing: ‘the creativity behind the construction of shacks and, in some cases, provision of basic services, has been entirely informal and, in the absence of effective formal interventions from the state, markedly resourceful.’39 These acts of citizen-led innovation are often erroneously claimed as government victories in statistical publications.

This is compounded by the abject state of municipal finances. In November 2015, the South African Auditor General (AG) – Kimi Makwetu – released a report showing the ‘improvement’ of municipal financial management. ‘Improved’ performance meant that only 131 of South Africa’s government departments at all levels received a clean audit. Outside Gauteng and the Western Cape, who received 83% and 54% of clean audits respectively, the next ‘best’ performer was the Free State which only achieved a dismal 32% of clean audits.40 Irregular expenditure in the South African government persists at the unacceptably high figure of R25bn – or enough to fund free tuition for every student at South Africa’s universities with much room to spare. Optimism faded when, in 2016, irregular expenditure shot up by 40% to R46bn.41

This is indicative of a broader trend. In 2011–2012 the Eastern Cape showed a regression in public financial administration. The data made for shocking reading. More than 70% of the provincial budget was disclaimed or qualified. This led the AG to suggest that ‘the 2011–12 outcomes once again show that, despite a number of interventions by the AG, auditees are not addressing the root causes when attending to audit findings but are rather addressing symptoms at a reporting level to achieve a better audit outcome for that year’.42 In the five years between 2010 and 2015, unauthorised expenditure tripled to R15bn.43 In 2009, only eight municipalities received clean audits.44 This led to more unheeded statements of alarm from the AG, summed up by a resigned refrain: ‘bad service delivery is due to bad management.’45 In 2012, only thirteen of South Africa’s 278 municipalities and only six municipal-owned entities received clean audits in the same year. No metros achieved this feat, leading the AG to lament, ‘we are seeing the impact of the lack of skills, the slow response of leadership to owning key controls, as well as the absence of managing poor performance and the risks that municipalities continue to face … at the moment these risks are beyond tolerable levels’.46

In 2011, the AG also revealed rampant financial mismanagement in the then Department of Water Affairs. That year, its Director-General and Financial Officer resigned after allegations of financial foul play totalling R1bn. In a review of the department’s finances, the AG complained he could find ‘no system of control over fruitless and wasteful expenditure on which I could rely’.47 An independent analysis of the Department’s finances showed that they had underestimated assets by a whopping R11bn. Worse still, the Water Trading Entity received a disclaimer, the worst possible audit outcome. Five years on, the story was unchanged: in 2016, the Department incurred 1.7bn in irregular expenditure, drawing the condemnation of AG and MPs across the political spectrum.48

It’s little wonder, then, that South Africans deprived of basic services for so long have resorted to protest. Today, South Africa has one of the highest incidences of protest in the world. The majority relate to local service delivery issues. At first, the ANC suggested protests were the result of ANC successes. For instance, in the 2014 State of the Nation address it was said that, ‘the protests are not simply the result of “failures” of government but also of the success in delivering basic services … success is also the breeding ground of rising expectations’.49 President Zuma also said a few years later, in 2016, ‘some of the protests are because people are impatient … they get agitated by the very delivery that they see’.50 But in a study of service delivery protests between 2004 and 2009, Peter Alexander, the South African research chair in social change, found that ‘protests about services and complaints about unemployment are a direct response to the ANC’s failure to advance economic policies benefitting most of the population’.51 In this study, housing was identified as the most important issue, accounting for 17% of protests. The two next most frequently raised issues were sanitation and electricity, both of which accounted for 10% of protests.52

Surely, then, we have reason to doubt the claim that basic services are on the ‘right track’. They are stagnating and reversing at totally unacceptable levels, given how long government has had to fix the problems it inherited. It’s time to lift our heads from the sand and see the living conditions of most South Africans for what they are.

Conclusion

Some may object that there has been ‘progress’, even if slow. But this is a very strange definition of progress. I could not put my response more clearly than Malcolm X: ‘if you stick a knife nine inches into my back and pull it out three inches, that is not progress. Even if you pull it all the way out, that is not progress. Progress is healing the wound, and America hasn’t even begun to pull out the knife.’53 If you took a test and got 10%, then took it again and got 11% you would technically have made ‘progress’, but you would still have failed. Walking two steps to the moon is ‘progress’. My claim here is that in many cases South Africa has gone backwards, while in others, the ‘progress’ is so utterly insufficient that it does not deserve the name.

All we need to do is look around us. In my everyday life, I have experienced the decline first-hand, whether visiting my family in townships or rural areas. Beyond the slogans, who can say they have seen progress with their own eyes? Who can point to material changes in people’s lives that are sustainable and secure? It’s comfortable to cite figures on ‘electrification’, but even before load shedding, power cuts were regular in South Africa’s forgotten corners. There is a gap between data and life that remains too wide in South Africa. Somewhere beyond the surveys and the reports are South Africans who live in abject poverty, forgotten by government, the media, and even those who purport to report on them.

One could highlight several other issues, like chronic failures in basic education, or the stagnancy in the primary healthcare system. One could speak about the state’s mismanagement of certain public owned companies, or the high crime rate. But the case is already made. South Africa is not progressing steadily. Any suggestion that it is, is a ploy to lull the population into a false sense of security, a stupor from which we allow the powerful to abuse the institutions we entrust to them. If we continue to set apartheid as the benchmark for success, we will always be in a condition of ‘progress’, even if people are suffering intolerably. Dissatisfaction at the local level shows citizens are waking up. Two decades on, we can’t keep re-rewarding the ANC for the same achievements while people’s lives don’t improve – not least because of what the ANC stated in the Reconstruction and Development Plan, which was intended to be the foundation of its future economic and social policies:

No political democracy can survive and flourish if the mass of our people remain in poverty, without land, without tangible prospects for a better life. Attacking poverty and deprivation must therefore be the first priority of a democratic government.54