An investigation into the economic sustainability of Kwakwatsi / Tshediso Joseph Sekhampu

• Main Author: Sekhampu, Tshediso Joseph
• Language: en
• Published: North West University 2014
• Online Access: http://hdl.handle.net/10394/12776

The study on which this thesis is based, investigated the economic sustainability of Kwakwatsi. Kwakwatsi is a former black township in the Free State Province of South Africa. The economic sustainability of the township was determined by the income generating activities in the area, household income derived from various sources, projects proposed by the LED strategy, and the impact these may have on poverty and unemployment in the area. The premise is that in a sustainable economy, poverty and unemployment is reduced over time. To measure the sustainability of the township, data relating to the status quo in terms of poverty and unemployment was captured at a point in 2009. The study employed household indicators to map an economic profile of the area. Poverty and unemployment are defined and then measured for the township. The HSL which is defined as an estimate of the theoretical income needed by an individual household to maintain a defined minimum level of health and decency in the shortterm was used as a measure of poverty in the area. The survey results showed that 72.9% of all sampled households are poor and on average have an income shortage of 56% to the poverty line. The average monetary shortfall per household is calculated at R1158. The average monthly income for a poor household is R688. Of all sampled households, 45% depend on the state's old-age pension grant as their main source of income. The analysis of the sources of income of the poor showed that government grants constitute 79% of household income, with the state old pension grant alone contributing 40% to household income for a poor family. The unemployment rate of the poor is 86.9% compared to 79% for the whole sample population. The expenditure patterns of the residents show that 34.4% of household income goes to buying food. A considerable number of people in the area fail to have a decent standard of living due to a lack of employment opportunities. Unemployment is the primary cause of poverty in Kwakwatsi. In the absence of any intervention, the poverty rate for Kwakwatsi is estimated to continue to increase from 72.9% in 2009 to 82.6% by 2020. An investigation into the economic sustainability of Kwakwatsi The average annual increase of poverty and unemployment between the years 2010 to 2020 is estimated at 0.89% and 0.34%, respectively. The unemployment rate for Kwakwatsi is estimated to increase from 72.9% in 2009 to 85.44% in 2020. The impact of the local production of basic household items was determined using the poverty impact model. The adoption of an import substitution initiative by producing goods for local consumption can help in reducing poverty and unemployment for the area, thus improving the economic sustainability of the area. If projects focusing on the poor unemployed who are currently looking for employment are created at a minimum monthly income of R500 per person for each poor unemployed person, the poverty rate could be reduced from 72.9% to 52.9% in Kwakwatsi. === Ph.D. Economics, North-West University, Vaal Triangle Campus, 2010