Emancipation of the Masses: Lenses on Government Social Services Expenditure and Poverty Reduction in South Africa

Abstract

Poverty remains on the agenda of many developing countries. South African social expenditure is a critical element of the government's strategy to combat poverty. The chapter utilised the Principal Component Analysis and ridge regression to determine the impact of government social services spending on poverty reduction in South Africa in the face of the COVID-19 pandemic. Findings from the study showed that grants paid, employee compensation, expenditure on household and amenities, and social contributions are positively related to poverty reduction in South Africa. Expenditure on education, social protection, and social benefits is negatively related to poverty reduction. The reason being, "the middle classes, particularly in urban areas, reap most of the government's health and education spending benefits." Second, "corruption incidences in the public sector result in imperfect targeting, as poor households are not fully covered." Third, there is evidence of service delivery protests in targeted areas concerning selected government expenditure on social protection and social benefits. We suggest the following policy recommendations: first, creating public- private partnerships on community income-generating projects. Second, adopting initiatives in urban agriculture and value-added economic activities to increase household disposable income and avoid reliance on the government. Finally, increasing accountability for government programmes and government employees.