SA faces the persistent triple challenges of unemployment, inequality and poverty which need multiple solutions.
There are pockets of success: not everyone among the previously disadvantaged is poor, for example, and not everyone who was poor in 1994 is still poor now.
If we can understand how people earn their living — or conversely, fail to do this — then we may be able to generate solutions.
As academics at Nelson Mandela University and University of Fort Hare, we collaborated to study how the rural poor make a living, looking at what assets they had access to.
For this research we used two data sets: the Stats SA General Household Survey (GHS) and the Programme to Support Pro-poor Policy Development (PSPPD II) University of Fort Hare (UFH) economics survey.
We looked at the income of 3,033 households in the Eastern Cape, of which 50.21% were female-headed and 49.79% male-headed.
The poor cannot take part in many lucrative activities as they need access to key livelihood resources, including land, roads and access to roads, education and health services, finances, and social resources such as trust among members of a community.
Poverty starts with lack of access to any or all of these key assets.
Our study took an asset-based community development and sustainable livelihood framework approach.
This is important as it views community assets, rather than needs, as the primary building blocks for sustainable livelihoods.
We argued that poorer households take on many low-value activities to earn their living, relying mainly on labour and odd jobs.
This is because they lack capital — equipment and funding — to get into higher-value activities like commercial-scale farming.
This is sometimes an argument for big family sizes: as the number of children increases, each family member can carry out many small-stake tasks to accumulate a reasonable income.
Unfortunately though, this is also an argument that pushes children to work, and encourages child labour.
This study found that the two sets of data supported each other, showing that households do indeed need access to various assets to sustain their livelihoods.
If they don’t have this access, they are more likely to rely on social grants or remittances, as is the case in the Eastern Cape.
The data showed that most households in this province rely on non-earned, or non-labour, income with the majority of this social grants.
Remittances — income sent by family members working elsewhere and largely derived from migrant labour — followed as the second-highest source of income.
Black African households were concentrated in this non-labour income category, with white and coloured concentrated in the earned, or salaried category.
Male-headed households and those with more access to financial capital were in a better position and had more diversified strategies linked to access to key assets.
Small rural towns with a lack of physical resources — water, electricity and roads — were the poorest.
A lack of electricity, for example, precludes access to the internet, and therefore information and communication technology.
Overall, rural women were the most vulnerable.
Female-headed households were less likely to farm due to lack of access to land and finance and hence relied more on grants and remittances.
This study helped to identify the factors that pull households out of poverty as well as those that can push them into it.
This is critical for policymakers as the economy emerges from Covid-19.
When people have access to assets such as land, they are able to farm for subsistence and possibly sell goods to make a living.
This will reduce the burden on the government and may lead to inclusive economic development.
The land question is therefore an essential component of a successful rural development strategy in SA.
Education is another major objective, including access to information and communication technology.
Even before this, however, access to basic physical services such as roads, electricity (energy) is imperative.
There also must be a focus on women to enable them to access small-scale farming initiatives and agricultural co-operatives.
After all, most households in the Eastern Cape are female-headed.
In addition, we need to revitalise and grow our rural towns to reduce migration out of the province and avoid “brain drain”.
The solutions lie in how traditional and political leadership provide access to land, and the transformation of the financial sector to better serve the poor, for example through the growing of co-operative financial institutions.
There is also a responsibility on the sector education and training authorities to drive training of the marginalised (youth and women), and for the government to expand electrification and the internet spectrum.
- THE AUTHORS: Prof Syden Mishi, Ms Zintle Sikhunyana and Dr Kin Sibanda are in the department of economics, faculty of business and economics sciences, Nelson Mandela University, Port Elizabeth. Ms Nomasomi Ngonyama is in the department of economics, faculty of management and commerce, University of Fort Hare, Alice. This report is extracted from their research “Livelihood strategies and diversification amongst the poor: Evidence from South African household surveys” which appeared in the Journal for Transdisciplinary Research in Southern Africa in May 2020.
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