Using a constructed data series and another data series based on the All Media and
Products surveys (AMPS), this paper explores trends in poverty and income distribution
over the post-transition period. To steer clear of an unduly optimistic conclusion,
assumptions are chosen that would tend to show the least decline in poverty. Whilst there
were no strong trends in poverty for the period 1995 to 2000, both data series show a
considerable decline in poverty after 2000, particularly in the period 2002-2004. Poverty
dominance testing shows that this decline is independent of the poverty line chosen or
whether the poverty headcount, the poverty ratio or the poverty severity ratio are used as
measure. We find likely explanations for this strong and robust decline in poverty in the
massive expansion of the social grant system as well as possibly in improved job creation in
recent years. Whilst the collective income of the poor (using our definition of poverty) was
only R27 billion in 2000, the grants (in constant 2000 Rand values) have expanded by R22
billion since. Even if the grants were not well targeted at the poor (and in the past they have
been), a large proportion of this spending must have reached the poor, thus leaving little
doubt that poverty must have declined substantially. However, there are limits to the
expansion of the grant system as a meaNS of poverty alleviation, pointing to the importance
of economic growth with job creation for sustaining the decline in poverty
The data also shows that there is substantial progress in economic terms amongst some
Black, who have managed to join the middle class. This expansion was most rapid at the
upper end of the income spectrum – Blacks constituted about half the growth of this segment
of the consumer market in the period 1995-2004.
