Newsletter 44 – Are people in big cities getting poorer? – 23 October 2009
Many poor people are leaving the rural areas in former homelands in search of better opportunities in urban South Africa. What has been the impact of this on unemployment and poverty levels at the major urban areas?
Seven out of the 19 major urban areas in South Africa have experienced increases in poverty rates between 1996 and 2008. Poverty rates increased in Lejweleputswa (Free State Goldfields, Welkom), Mangaung (Bloemfontein), Nelson Mandela Bay (Port Elizabeth), Pietermaritzburg, Sedibeng (Vaal Triangle), Vanderbijlpark, and the West Rand. The rates decreased in the other twelve areas, which include the six metros. Global Insight Southern Africa defines people living in poverty as those living in households with income less than the poverty income. Poverty income varied according to household size and ranged from R1 174 for a household with one member to R4 254 for households with eight members or more in 2008.
The Lejweleputswa District Municipality had the largest increase in the poverty rate from 40% in 1996 to 56% in 2008. This is due to a number of factors, one of which is that while agriculture and mining are the largest sectors in the district, economic activity in these sectors has been on a declining trend. The agricultural sector has experienced negative growth due to factors such as drought, bad weather, and unfavourable market conditions.
Despite this, formal employment growth in the area increased from -3.1% in 2004 to 0.8% in 2008. GDP per capita at constant 2000 prices also increased, from R17 350 in 1996 to R17 371 in 2008. Furthermore, current annual income per capita increased from R20 602 in 2006 to R26 792 in 2008. This may be a sign that the area is becoming more formalised, and that the business and retail sectors will become dominant in the district’s economy. This will ensure more sustainable job creation, rather than the volatile nature of jobs in the mining and agricultural sectors.
The largest decrease in the poverty rate was in Rustenburg, where it dropped from 27% to 19%. GDP per capita increased from R44 127 in 1996 to R52 173 in 2008. This is despite the fact that the growth rate in formal employment decreased from 7.9% in 2004 to 5.2% in 2008.
Both Lejweleputswa and Rustenburg were the only two municipalities among the 19 which had negative economic growth rates in 2008, at -0.8% and -2.0% respectively.
While these two municipalities are not covered by the municipal outreach project, their economic conditions affect those of their neighbours. In the case of Lejweleputswa, the area has had a net decline in population size which councillors in the Motheo District Municipality say is due to the fact that people are leaving the area in search of jobs and better opportunities in Mangaung. This information is available in the South Africa Survey 2008/2009 and the supplement to the Survey entitled Local government and the poverty challenge, both of which will be published before the end of the year.
- Nthamaga Kgafela
by
nkgafela
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last modified
2009-10-23 09:20
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