Page 42 - Risk Report 2024

IRMSA
42 RISK REPORT 2024/25

8.4 Social Security

Increasing poverty in SA is characterised by economic exclusion, lower education levels,
and vulnerable households.

Economic policies aimed at redistribution in the social security net have resulted in SA having the highest share
of GDP devoted to social security of any sub-Saharan country, yet poverty levels remain high. For a quarter (23.5%)
of SA households, grants are the primary source of income (increased to 28 million beneficiaries or 44% of the
population, including SRD grants at ~R260bn annually). This situation creates extreme risk of social upheaval if
not alleviated urgently.

This risk is mainly driven by the following:
• Emerging evidence-based international consensus is that effective social security promotes growth and
development. Although in SA, this has reduced aggregate poverty, improved school attendance, and reduced
levels of stunting in children, the social security system remains fragmented, poorly coordinated, inadequate,
and poorly managed. Reforms, whilst it will not be without challenges, must result in greater inclusivity and
accommodation of inter alia informal and atypical workers.
• Despite this, poverty and inequality remain high due to unequal resource distribution, poor educational
outcomes, and insufficient entry-level jobs. Related social and fiscal costs are immeasurable and threaten
the sustainability of the system.
• Unemployment remains a pressing economic, social, and policy challenge. Unemployment increased to
7.9m (32.1%) in March 2024, driven by a growthless economy, structural mismatches in the labour market,
and automation. This may lead to increased crime, deteriorating health, and social unrest. Less rigid labour
practices and constant reskilling of workers are needed. Equally, the social compact between Government,
private sector, and civil society to ignite the economy should be re-established and focus on the youth
specifically, who are more significantly impacted by high unemployment rates.

GABRIELLE HUSSAIN GHADILE MASHIBINI ALIZE LE ROUX ANITA SAMAAD
Business Manager: Acting Chief Risk Officer Senior Researcher CRM Prof
Group Operations & Free State Provincial Institute for Security Chief Risk Officer
Sustainability Treasury Studies Department of Social
Johannesburg Stock Development
Exchange