ABSTRACT
There is a growing pool of evidence showing that cash transfers can promote livelihood activities. Yet there has been limited empirical studies that explore how financial support influences beneficiaries’ decision-making in the construction and operation of livelihood activities in an urban context. This study presents findings from qualitative research conducted in a poor urban community in South Africa. Structuration theory provides an analytical tool to understand how cash transfers enable decision-making of beneficiaries in livelihood activities. The study finds that beneficiaries make different types of initial and ongoing decisions to improve their socio-economic condition. Among the contributions of this paper is that it counters the cynicism that is usually attached to cash transfers. The study’s implications include the incorporation of both social and economic goals in the design of social protection policies as well as the need for greater recognition of the role of the informal economy in eradicating poverty.
1. Introduction
There is a growing body of evidence-based studies on the impact of cash transfers on livelihood activities locally and globally (e.g. Fisher et al., Citation2017; Nnaeme et al., Citation2020). South African cash transfer programme is reaching almost 40% of the citizens. The programme constitutionally guarantees the right to social assistance for those who are unable to meet their needs. Without such expansive cash transfers poverty would be significantly higher (Schiel et al., Citation2016). Poverty levels declined due to increase in cash transfers distribution and better economic performance from 2006 until 2011; but rose again in 2015 and continue to do so. For instance, more than one out of every two South Africans were poor in 2015 with the poverty headcount increasing from 53.2% to 55.5% in 2011. The rise translated into over 30.4 million South Africans living in poverty in 2015 (Stats SA, Citation2017:14).
In spite of the positive benefits of cash transfer programmes, the insufficiency of the value of these transfers in meeting the basic needs of beneficiaries, points to their limitations in poverty reduction worsened by economic downturn (World Bank, Citation2015). Cash transfer programmes account for 10% of the consumption needs of the people in poverty in low-income countries. The cash support represents 21% and 37% of the consumption needs of the beneficiaries in lower-middle and upper-middle income countries, respectively (World Bank, Citation2015:2–3). South Africa, as an upper-middle income country with high unemployment and poverty rates, the insufficiency gave rise to beneficiaries’ involvement in diverse livelihoods to which they deploy their resources, capabilities, and assets in making a living in the informal sector (Stats SA, Citation2018).
While a number of studies have paid attention to livelihood activities of beneficiaries (Fisher et al., Citation2017) in rural areas, there has been limited empirical studies that explore how the financial support influences beneficiaries’ decision-making in the construction and operation of livelihood activities in urban context. For instance, the receipt of the Child Grant Programme (CGP) in rural Zambia enabled beneficiaries ‘to shift livelihood strategies and convert subsistence farmers into small-scale farmers that sell some fraction of their crops in markets … and own non-farm businesses’ (Lawlor, Citation2015:iii).
Bearing in mind the insufficiency of cash transfers and structural constraints that perpetuate poverty, this study applied Giddens’s structuration framework to understanding how cash transfers influence beneficiaries’ decision-making in livelihood activities in Soweto, a settlement area in Johannesburg, South Africa. The most relevant aspect of the framework to the study was Giddens’s definition of agency as ‘the capability of [an] individual to “make a difference” to a pre-existing state of affairs or course of events’ (Giddens, Citation1984:14). Nnaeme et al. (Citation2020) interpret the definition to comprise three dimensions: motivation, decision-making, and choice of action in order to ‘make a difference’. The study is narrowed down to understanding how cash transfers affect beneficiaries’ decision-making which is important in improvement of one’s socio-economic condition. Decision-making plays a critical role in the enactment of social actors’ goal to overcome structural constraints (Garrick, Citation1999). It is a complex process that entails what to do, when, and what strategy to use in order to realise the desired goals (Bahdur, Citation2014). Livelihood-related decision-making points to ‘the capacity for social actors (for example beneficiaries of cash transfers) to reflect on their position, devise strategies and take action … ’ (Bakewell, Citation2010:1964), and implies being aware of alternative options (Giddens, Citation1984:9–15).
Partly informed by similar studies in rural areas in Zambia, Zimbabwe, Malawi, and Tanzania (Fisher et al., Citation2017), this paper aims to understand how cash transfers activate beneficiaries’ decision-making in livelihood activities in Soweto. Unlike in most previous studies that were rural-centric and of financial assistance that were temporal and of small scale, the current study is narrowed to the influence of cash transfers on beneficiaries decision-making in income activities in an urban community, were receipt of the support is almost universal and constitutionally guaranteed to all the eligible. This study is pivot on the following research question: How do cash transfer programmes influence beneficiaries decision-making in livelihoods in Soweto? In achieving the research aim and responding effectively to the research question the study purses the following research objectives:
To explore the effect of the receipt of cash transfer on beneficiaries’ decision-making in livelihood activities.
To note the dimensions and dynamics of beneficiaries’ decision-making in livelihood activities.
To identify priorities that shape beneficiaries’ decision-making in livelihood activities.
To understand the different types of financial decisions that beneficiaries make.
2. Material and method
In order to gain an in-depth understanding of how cash transfers impact on the livelihood decision-making of beneficiaries in an urban context of Soweto, a narrative research design was applied. It is a design that encourages researchers to be mindful of participants’ socio-economic contexts (Polkinghorne, Citation1995), and allows for an exploration of their lived experiences expressed through stories (Clandinin et al., Citation2017:90). It attempts to produce knowledge that is cognisant of the ‘situated, partial, contextual, and contradictory nature’ of human experiences represented in stories (Hendry, Citation2007:489). The significance of this design rests on the notion that ‘a storied narrative is the linguistic’ medium that gives both a glimpse into and maintains the complexity of decision-making (Polkinghorne, Citation1995:7). The design appreciates that human beings are not simply passive conveyors of socio-economic affairs, ‘but have certain inner capacities which can allow … decision-making’ (Garrick, Citation1999:149). The design lends itself to understanding how cash transfers influence beneficiaries’ decision-making in livelihood activities.
In attempt to realise the study objectives, individual in-depth interviews were conducted with 17 purposefully selected participants based on predetermined selection criteria: beneficiaries of cash transfer programmes, residents of Soweto, and engaged in a legitimate informal economic activity. Of the 17 participants, 10 were females and seven males. Over 2–3 interview sessions per participant were conducted until data saturation was reached. The interviews created an avenue for the co-creation of knowledge between the researcher and participants who Henning et al. (Citation2004) termed ‘spokespersons of the topic of inquiry’.
In the first session of the interview I focused on initiation and building of a trusting relationship with participants. The second session allowed for an exploration of raised issues and identification of emerging themes. The third session afforded me the opportunity to strengthen emerging themes (Henning et al., Citation2004) by probing further and checking if the content of interviews was accurately understood and consistently captured. In deepening and consolidating participants’ responses, observation technique was used during the interview sessions in an attempt to ‘ … fill gaps that are inevitably left by interviews’ (Henning et al., Citation2004:100). Data generated from observation shed light on participants’ responses as well as their facial expressions, gestures, tone, clothing, and other non-verbal indications (Polkinghorne, Citation2005:143). A total of over 45 individual interview sessions were held with the participants who were all beneficiaries of the three main types of cash transfers (Child Support Grant; Disability Grant, and Old Age Pension).
Thematic narrative analysis (TNA) techniques were used to analyse the data generated from both the interviews and observation. Atlas.ti software programme was used for systematic analysis of the data (Babbie, Citation2016). The TNA was used, especially the step-by-step procedure in ‘identifying, analysing and reporting patterns (themes) within data’ (Braun & Clarke, Citation2006:79). The data were classified into four themes in direct response to the study objectives. The limitation of TNA that I was mindful of was the techniques’ dependence on recollection of experiences and the likelihood of selective remembrance of incidents (Nnaeme et al., Citation2020). Another limitation of the study is the absence of comparative group of non-beneficiaries. Research diaries help with trustworthiness of the research process and findings.
3. Results
The patterns and themes identified in relation to the study objectives are presented using extracts from the data. The first theme demonstrated that receipt of cash transfers enabled participants’ decision-making in livelihood activities. Second theme is an appreciation of the beneficiaries’ decision-making dimensions and dynamics. In the third theme priorities that shape beneficiaries’ decision-making in livelihood activities are identified. Lastly, different types of financial decision-making of beneficiaries are presented in the fourth theme.
3.1. Cash transfers and decision-making
It emerged clearly from participants’ narratives that receipt of cash transfer was positively linked to their decision-making in livelihood activities. This finding foregrounds the understanding of participants as decisive, but did not exclude moments of self-doubt, when participants were concerned about whether a possible income-generating decision would be successful or not. For instance, Nompilo noted that self-doubt is her ‘main challenge in making decisions’. – portray participants as people who weigh up options and decide which livelihood routes best actualise desired livelihood outcomes.
Table 1. Cash transfer amounts and perceived linkage with decision-making in livelihood activities.
Table 2. Initial decision-making.
Table 3. Participants’ on-going business decisions.
All the 17 participants were found to have either decided to initiate or support an already existing livelihood activity. Eight of them, given their vulnerability and dearth of assets, had no prior income source other than state cash transfer programmes. This group of participants decided to initiate livelihood activities after becoming beneficiaries of cash transfers. As most of the participants were unemployed with no other source of income, participants took financial support as the ‘seed’ that prompted their decision to start their businesses. Jolly grasped the narratives of other participants when she said the following:
They [meaning the government] only give me the money because I am old, they never say anything about how I must spend the money, or what to do or what not to do with the money. I think for myself what I can do with the pension because the money is not enough for the whole month, it is too little. But I know that if I use the money as a seed to plan and start my own business that I will be in a position to make more money and achieve many things which I was not able to do when I was earning salary … I saw that money as a seed that can grow very well only if I use it to start my business to make more money.
indicates, Mabuso and Sphamandla were the two highest beneficiaries since their households individually received R2930 (US$208) monthly from government, while the lowest beneficiaries were Henry, Luthando and Nompilo, each receiving R410 (US$29). The table shows that despite the differences in the amounts received, participants exhibited similar patterns in the way they used the finance to impact on their decision-making in livelihood activities. However, the larger amounts of money available to beneficiaries such as Mabuso mean that they could conduct higher-yielding income activities that were not possible for participants such as Nompilo. For example, Mabuso was able to fund his building activities by using his pension which he saved in the bank. His pension allowed him to continue work even when a client defaulted on a payment, whereas a participant such as Luthando had to borrow R300 (US$21) from a mashonisaFootnote1 (money-lender) to add to the R150 (US$11) he took from his son’s monthly grant to re-start his business.
3.2. Initial and Ongoing decision-making
The study participants made two dimensions of decision-making: strategic initial and ongoing operational. The extracts in and demonstrate that participants referred to themselves as decision-makers. The Tables show that management of livelihood activities involves two dimensions of decision-making: initial decision to start and ongoing decisions concerning operations and inclusion of new income activities. Initial decisions to start livelihood activities are captured in , while on-going day-to-day operation decisions are shown in .
The way that participants described making decisions () about starting new livelihood activities related to the perception of themselves as decision-makers. For example, Henry decided, after becoming a beneficiary of Old Age Pension, that he ‘must create something [livelihood activity] for myself in order to become financially independent’. Similarly, Sphamandla said, ‘we had to create something for ourselves’. These decisions were reached considering the participants’ desire to improve their socio-economic conditions. Mandi, for instance, made an initial decision, after she became a beneficiary of Old Age Pension, ‘to use my money to build a house for rent which I must leave my children with when I pass away’.
Most participants’ initial decisions were necessitated by the socio-economic conditions in which they found themselves such as the case of Gregory who ‘made the decision of selling beer … on my own because of poverty’. This illustrates the fact that the decisions were not usually reached impulsively but involved active deliberation.
Decisions were also triggered by opportunities, such as receipt of cash transfers from the government. Patience ‘decided to start [a] laundry’ when she ‘saw the opportunity’. Most participants decided to start a new livelihood activity when they became beneficiaries of cash transfers. Nthabile said that when she ‘started getting the grantFootnote2 I then decided to start a business’. Others diversified their income activities after they became beneficiaries. Gladys related how she: ‘decided that I am starting with the selling of vegetables’ before she became a pensioner. Subsequently, receipt of pension made it feasible to become a member of stokvel through which she accessed beer directly from the brewery and built a garage where people sit and drink in her compound and included new income activities.
Participants also gave in-depth descriptions of the strategic decisions that they make on an ongoing basis. shows how these decisions involved diversifying or redirecting their livelihood activities, responding to changes in supply and demand, managing money and stock, managing relationships and seising opportunities. Concerning managing finances, Henry spoke of the decisions involved in running his business: ‘[I make] decisions about how to spend money on my own … how much to use to buy stock, how much to save in the bank’. The table also shows how participants made operational decisions alone or with others. For example, Mayo admitted that her daughter ‘ … helps me[her] in making decisions most times’.
Participants’ attentiveness to socio-economic and relational changes was important in guiding the continual adjustments to evolving realities. The adjustments included decisions on which income activities to discontinue or add to their existing livelihood portfolio. For example, whenever Nondumiso observes
an opportunity to sell something I decide to add that particular thing to the things I am selling already. But once I see that so many people are starting to sell the same thing I leave that thing for them and start something else …
Other decisions to modify livelihood configurations were in response to market opportunities or to manage risk. Gregory disengaged from selling ice-cream because ‘it was moving very slow’. He switched to selling beer because it ‘ … is faster than selling any other thing … ’ He also started selling cigarettes when he noticed that his beer customers also wanted to smoke while they drank. When Kelebogile noticed the jealousy and unwillingness of her neighbours to pay back loans she ‘decided not to lend money’ to any of them again, but to only focus on clients from other areas of the community.
3.3. Priorities guiding decision-making
The third theme identifies the priorities that shape participants’ decisions as well as the trade-offs they make. During the interviews, I identified several priorities shaping their decision-making. In their narratives they demonstrated the complexity of making decisions in contexts of disadvantage, and the trade-offs that were necessary to negotiate between conflicting priorities. In order of decreasing importance (which I determined from the frequency with which they were mentioned within and across interviews), the priorities that guided both initial and ongoing decisions were: maximisation of profit, management of competition, minimisation of stress, and job satisfaction. The judgements and trade-offs point to a quest for efficiency and effectiveness of livelihood strategies which are lucrative, less competitive and stressful, viable, and of a satisfactory nature compared to other income activities.
The first priority for participants was maximisation of profit. When they were selecting a livelihood activity, participants preferred income activities that yielded higher incomes. Kelebogile explained the reasons for choosing one of her livelihood activities as follows:
My business [money-lending] is more important to me because it brings more and fast money, not too much stress, I do them at my own time, no health issues. Money lending brings more money too quick, because if I lend someone R500 I get R750, if I give out R1 000, I get R1 500, if I give R2 000, I get R3 000 without doing too much work. It is a good business but there is a problem, I have to fight always and it is risky.
Ongoing decision-making about how to combine livelihoods also aimed to boost profits. For example, Mabuso, a pensioner who is both a builder and a plumber; said that the reason he came to the decision to ‘ … combine building and plumbing is to make more money’. This view elicited consensus among many participants such as Gladys who said that ‘ … money from one business is too little’. She felt that reliance on selling of one product was unwise. In running her already established income activities, whenever she ‘notice[s] that people want something else I add that thing, they want something else I add, I keep adding. That is how I come about selling many things’. Ongoing decisions to add income sources are because ‘the more businesses I have the better chance I will have in making more profit’, according to Jolly.
However, efforts to direct both initial and ongoing business decisions towards more financial yielding activities than others, also involved trade-offs with other important concerns such as security, health concerns and personal sacrifices. Security risks were problematic, particularly for some activities. For example, money-lenders such as Kelebogile acknowledged that the business brings ‘ … a quick money’ but ‘the only problem is that it is a risky business and I have to fight every time to get my money back … money-lending is not safe’. Given the insecurity of running a money-lending business in the community, and because she was well known, Kelebogile alternated between different places to withdraw money, as she ‘ … cannot be going to the same place always. It is not safe for me’, she said. Talking about her job as a packer of screws at a hardware store, Kelebogile spoke of her dislike for the activity, ‘I really hate the job’, because she is ‘always sick because of that job. I have to pack at least 24 boxes of screws even though I am a woman. That work is meant for men and not for ladies, it is a hard job’. Thando described how his recycling business at home was a source of pollution and health hazard to both his household and neighbours.
Management of competition was the second priority that shaped 13 participants’ decisions to drop, combine, or find new income activities, while others were not deterred by competition given high demand.
Participants displayed a common level of understanding of demand and supply principles. They acknowledged that the higher the number of suppliers, or sellers of a particular product or services, the lower the chances of making profit. Gladys, a pensioner who sells a variety of products, including beer, articulated this understanding better when she said:
I sell the things that I can make profit from not the ones that I will suffer for nothing. I only do business that is working, and not the ones that will waste my money. Any business that wastes my money I drop it and move on.
Minimisation of stress was for some participants a priority in reaching a decision. Seven participants reached decisions that minimised stress in dealing with customers. Finding that elderly customers were problematic in terms of paying off debt, some participants, such as Nompilo, made decisions to re-focus their income activities on another age group, children. According to her, ‘selling sweets and chips is not stressful at all … ’ as ‘ … the business is peaceful, children don’t give me any trouble’. Similarly, Thando chose recycling because of the relative peace it offers. For him,
I chose recycling because it is a peaceful work. I don’t have to quarrel with anybody. If I was to start selling something every day I might be having problem with people who will like to buy and not want to pay. Recycling gives me peace of mind. I don’t have to fight with anybody. I do my thing at my own time.
Apart from making money from sewing, I like to see my wonderful works in peoples’ houses and bodies. I like to see people look smart. I become proud when I see somebody wearing a cloth that I sewed, then, I say it is my work (pointing at her chest as an indication that the cloth is her product). I am happy when I see people and their houses beautiful because it is the work of my hands and brain.
3.4. Financial decision-making
The fourth theme presents different types of financial decisions of beneficiaries. Central to livelihood decision-making were decisions around the generation, allocation, and control of available financial resources. Interviews revealed detail about financial decision-making and the trade-offs involved, which are described in this section under four types of financial decisions: investment, spending, saving and borrowing.
Investment decisions were almost exclusively linked to receipt of cash transfers in the interviews conducted for this study. This is because cash transfers represented the only reliable and predictable monthly financial resource that inspired participants’ decisions to invest in income-generating assets and activities. Many participants became stokvel members after they became beneficiaries. For example, Mandi, a 70-year-old pensioner, decided to organise five other pensioners to form a stokvel, to which she contributed R1 000 (US$71) monthly from her pension, with the aim of building a three-room house for rent. The interviews revealed how cash transfers opened up options for decision-making that would otherwise not have been available to participants. Several usages of cash transfers pointed to the investment decisions of participants. For example, Kelebogile, a former unemployed mother, decided to invest in income-generating activities when she began receiving Child Support Grant (CSG) for her children. She explained:
I had nothing, I was not working. The grant money was the starting point of all these businesses and everything you see in this compound today. I borrowed R2000 (US$142) from my sister to start to hamper business, but I had to pay her gradually from the grant money. That is why I say that grant money is the money that I used to start everything.
Decisions about spending were characterised by strong self-discipline and a keen awareness of the trade-offs between spending and investment in business activities. Generally, participants were not extravagant with money but were purposeful in spending decisions to ensure the achievement of long-term goals at the expense of immediate gratification. For example, aware of seasonal fluctuations in her income, Nompilo decided only to spend on ‘what is necessary, what we need, not what we want’ in winter because her ice-cream business was dependent on weather. Kelebogile gave several examples of how spending decisions were guided by self-discipline: ‘[i]f I want a loaf of bread I cannot go and buy flowers’. Even when her monthly profit was higher than she expected she proudly asserted ‘I don’t spend more. That was why I said that I am so stingy. I am not a spender’. As did many participants, she held the view that making more money in a month does not translate into more spending. She described herself as:
… a type of person that decides on what to buy or spend my money on even before I step out of the house. If I go shopping to buy a dress, I buy a dress, I don’t care whether the shoes are half price or low price. I buy what I came there to buy and leave the shop. I prioritize my spending and discipline myself very well.
Decisions about saving supported the resolve discussed above to invest in livelihood activities and to maintain disciplined spending. Participants saw their disciplined spending decisions as a means to an end, in order to save more for investment. Other participants agreed with Henry when he said ‘ … I don’t spend more because I have made more money. When I make more money, I save more, not to spend more. I am not supposed to be spending more’. Similarly, Kelebogile expressed a similar conviction:
Better management of money is part of my qualities even before the business, but the business gave me a wider opportunity to put that quality to work. For example, if I have R5 ($0.4) now I know that R2 ($0.1) is for something and that R2.50 ($0.2) is for another thing and that I have to come back with the remaining 50 cent ($0.04) that is how I work. I don’t have to overspend. Most successful business people are not spenders, no. I know that I have to save R3 ($0.2) out of every R5 ($0.4) I make a profit in my business for example. I cannot save less than what I spend. I must save more than what I spend on a daily basis that is how I work in my business. Now that I am on my own I cannot afford to spend more money because if I do I will be failing every day.
Borrowing as a financial mechanism, on the other hand, was not positively viewed by 13 of the participants. Only five out of 13 participants had borrowed prior to becoming cash transfer beneficiaries. They did so as a last resort to provide for their children or to start a business. For Kelebogile, borrowing had been a dignified solution to feeding her children at the time. She decided to borrow to buy food because, according to her, it was safer to borrow than to beg neighbours for food as they were likely to malign her later. Four participants who continued borrowing money from mashonisas qualified their decisions for doing so. First, they borrowed to finance their income activities. Second, they planned how to realise the money before borrowing it. For example, Gregory said: ‘I only borrow when I run out of money to stock … and not to buy food, and I must have a repayment plan’.
4. Discussion
The study clearly showed through participants’ narratives that receipt of cash transfer was positively linked to decision-making in livelihood activities. Participants demonstrated that they were decision-makers who make initial and ongoing decisions shaped by priorities: profit, competition, stress management, and satisfaction. They also showed that they were frugal, self-disciplined, purposeful, and in control of financial decisions to invest, spend, save and borrow. Through prudent financial decisions, participants optimised limited financial resources by trading-off immediate wants for long-term needs. Even though participants positioned their decision-making as pivotal in conducting and operating livelihood activities, they also appreciated the critical role of cash transfers in enabling the decisions.
Interviews revealed a pattern of cash transfer inspired decision-makers in livelihood activities in Soweto, South Africa. Cash transfers functioned as financial assets and as a catalyst to participants’ decision-making. Through the lens of structuration framework (Giddens, Citation1984), cash transfers were shown to serve as enabling resources from society to those most in need, which the participants, in turn, used to catalyse decision-making in livelihood activities. In utilising the limited available resources to confront the structural constraints that perpetuate poverty, receipt of cash transfers enabled participants make decisions in livelihood in attempt to ‘make a difference to a pre-existing state of the affair’ (Giddens, Citation1984:14).
The interviews gave a picture of deliberate engagement in decision-making that is critical in the operations of livelihood activities. While initial decisions set in motion strategic livelihood routes to the realisation of goals, ongoing decisions were made to reflectively guide the daily operation of the business towards those goals. The findings point to a willingness to seise new opportunities, responsiveness to changing circumstances, and a positive cycle of reflective learning from experience (Fisher et al., Citation2017; Nnaeme et al., Citation2020). From the interviews, it emerged that cash transfers were critical to both initial and ongoing livelihood decision-making of the beneficiaries that participated in the study.
During the interviews, the researcher identified several priorities informing decision-making. The study participants through their narratives demonstrated the complexity of making decisions in contexts of disadvantage, and the trade-offs that were necessary to negotiate between conflicting priorities.
To some degree, all participants described their livelihood outcomes as having improved as a result of the influence of cash transfer on beneficiaries’ decision-making in livelihood activities. Their self-evaluations of the successes and shortfalls of their engagement in several income activities showed varying degrees of realisation of the overarching desire for improvement in their socio-economic conditions. The improvements manifested an increase in income, ability to meet personal, household and familial basic needs such as food, clothes, school uniforms and shoes, home improvement and access to services including education (for their children) and health services, and growth of their income activities (Fisher et al., Citation2017; Nnaeme et al., Citation2020). The improvement in income indicated an estimated average of over R2 000 (US$142) per month due to their livelihood activities. Another improvement in livelihood outcomes included positive psychosocial outcomes, and skills and qualities learned as a result of owning and operating income activities. The improved psychosocial outcomes were informed not only by participants’ achievements but also by their improved ability to fulfil their obligation to relatives and the community, for instance, improved participation in community police forum (CPF).
While cash transfers prompted beneficiaries’ decision-making in livelihood activities, the financial support is inadequate in shielding participants from impeding structural drivers of poverty and unemployment that necessitated receipt of the support. Other impeding realities included high poverty and unemployment within households and the community; a lack of an insufficiency of assets; crime and violence; gender-related intimidation. This study confirms previous studies that established livelihood challenges (Nnaeme, Citation2017; Keahey, Citation2018).
5. Conclusion
Redistribution through cash transfer programmes is an innovative policy instrument in South Africa and other countries in the Global South to reduce poverty and income inequality. However, their influences on beneficiaries’ decision-making in livelihood activities have emerged as an unintended policy consequence, given that the financial support was not primarily designed to lead to this outcome. There is a growing pool of evidence showing that the cash transfers impact on livelihoods, but this study’s contribution is a detailed exploration of how cash transfers activate beneficiaries’ decision-making in livelihoods. This exploratory study also identified strategic initial and operational ongoing decision dimensions, the priorities that shape the decisions as well as four types of financial decisions: investing, spending, saving, and borrowing. Facilitating and upscaling this effect of cash transfers will require deliberately designed implementable policies that promote support services and enabling environment conducive for beneficiaries involved in the informal economy. More studies are required to further understand the prevalence of this impact as well as comparison to non-beneficiaries to inform policy on how best to maximise effects of cash transfer programmes on the fight against poverty and unemployment in post COVID-19 urban areas of South Africa. Lastly, by showing that cash transfers enable decision-making in livelihoods, the study challenges critics who think that cash transfers promote passive dependence on state benevolence.
Acknowledgment
The author appreciate the support of South African National Research Foundation, Prof Jimi Adesina, Prof Leila Patel, Dr Sophie Plagerson, and Nomusa Zikalala. The author also acknowledges the supportive role of the editor and the reviewers of this paper.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Additional information
Funding
Notes
1 Mashonisa is an isiZulu word for a money-lender, who informally lends to clients usually high interest rate.
2 Social grants, or grants, is another name for cash transfers in South Africa.
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