South Africa spends almost R700 billion per year on child poverty reduction – report

Challenges faced by children in South Africa are not foreign to many ears. These challenges include child poverty, which is not just a moral issue, but also a thorn on taxpayers.

The South African government, collectively with non-government organisations (NGOs) and the private sector spend almost R700 billion per year tackling child poverty.

The figure was revealed by the Nelson Mandela Children’s Fund report. Apart from the economic impact of child poverty, the report compiled in partnership with Deloitte includes other challenges such as child health and nutrition, education, and child safety.

It is revealed that children living in poverty experience violence more than those who are not in poverty. This is due to socio-economic aspects such as unemployment, substance abuse, and parentless households.  

Billions spent per year

According to the report, direct spending by government for child poverty reduction is R656 billion, which is at least 9.8% of the country’s gross domestic product (GDP).

“Child poverty spending is unpacked by apportioning the national budget spending on the poverty alleviation categories of community development; social cohesion and safer communities; health; basic education; and social protection,” reads the report.

When it comes to the private sector, an estimated R831 million is spent through corporate social investment (CSI) projects. Deloitte sampled 20 publicly traded companies and analysed their CSI report to arrive at the estimation.

The report notes that although the private sector’s spending is lower than government spending, the sector employs the largest part of the population which relies on personal income tax as the largest source of tax revenue.

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NGO’s spending

The report estimates that NGOs spend between R2 billion and R21 billion on attempts to reduce child poverty. The spending was done through different child poverty-related programmes and initiatives.

“This estimate was calculated by extrapolating from the publicly available information of the largest donors who earmark funding for child poverty alleviation.”

The report also includes the estimation of loss of potential earnings or indirect economic impact of child poverty, which is around R1.3 trillion or 17.8% of the South African GDP.

Children not living in poverty

Through results of the National Income Dynamics Study (NIDS) database, which is a government-commissioned longitudinal study launched in 2008 to track population changes over time, Deloitte was able to contrast the income trajectory for children living in poverty with that of children not living in poverty.

“South Africa is one of the most unequal countries worldwide, with the highest Gini coefficient, which is a measurement of income inequality for a specific country, with 20% of the population earning over 68% of income.”

Estimations might be higher

Dr Linda Ncube-Nkomo, CEO of the Nelson Mandela Children’s Fund said the numbers included in the report are an estimation based on information that is in the public domain, therefore, the cost might be higher than what they found.

She added the stakeholders are not getting results of the investments being made into reducing child poverty, therefore more can be done.

“The frameworks (including section 28 of the Constitution) that government has put in place to protect children, are consistently undermined in homes, schools and communities. The cost of violence against children is estimated to be between 2.3 and 6% of the GDP.”

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Money spent on basic education

The report outlines that in 2023/2024, the social wage spent on basic education was R291 billion and constituted 44% of the total spend on child poverty alleviation programmes.

The budget is used for various purposes, such as water and sanitation, facilities, infrastructure, feeding schemes and compensation of employees.

“In 2023, South Africa had 24 871 schools that accommodated 13 439 683 learners and employed 450 993 educators.”

Most children in South Africa attend schools that are declared no-fee schools, which receive a large share of the education budget from the Government.

Child grants

The report details that the Department of Social Development is the main government agency that funds social protection for children in the country.

This includes money given to the child’s main caregiver, also known as a child grant, a grant given to a foster parent and a child under 18 years old who needs and gets permanent home care because of a serious mental or physical disability.

“Children-specific grants constituted 14% of the child poverty expenditure to the tune of R89 billion.”

Violence on Children

The report details that 42% of children experience some form of violence.

“More often than not, violence may begin before a child is born through intimate partner violence while a mother is pregnant, then spanning across childhood through sexual abuse, physical abuse, emotional abuse, corporal punishment and neglect as depicted in the diagram below.”

In 2016, Save the Children South Africa reported that Child Violence cost South Africa 6% of GDP at the time, that is, R238.58 billion Save the Children (2016)34.

“The estimate, as it stands, can be either over or underestimated, according to VAC-related studies these estimates are dependent on sampling size, varying definitions of VAC, and a variety of measurement scales making it difficult for comparative analysis.”

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