Perceived Impact of the Global Financial Crisis on Social Grant Recipients in the Eastern Cape, South Africa

Abstract

South Africa has one of the highest rate of income inequality and the highest level of absolute poverty. Government’s primary social welfare objective is focused on poverty alleviation and halving poverty by 2015. Social assistance is one way of achieving this goal. The aim of this study was to examine the perceptions of social grants recipients on the impact of the 2007/2008 financial crisis on their households. Data were collected from 1100 social grant recipients from 37 communities using a semi-structured questionnaire. The findings show that the majority of respondents were recipients of child support grant and females constituted the bulk. Most of the respondents revealed that the grant money was meeting their household and other needs before the financial crisis. However, the capacity to meet these needs slightly dropped during and after the crisis. The crisis has continued to pose a serious challenge in meeting these household needs. It is argued that females were making more household use of their grant money than males as they are regarded as central figures in African households. The 2007/2008 financial and the 2011 Euro zone crises have contributed significantly to the continuous deterioration of socio-economic conditions of social grant recipients. The paper recommends certain actions to ease rural household dependent on social grants. DOI: 10.5901/mjss.2014.v5n2p277