The pensions "crisis" in the Eastern Cape Province

  • Valerie Møller Institute of Social and Economic Research, Rhodes University


In January 1998 hundreds of thousands of pensioners in the Eastern Cape Province were left destitute when a cash shortfall prevented the provincial Department of Welfare from paying out old-age pensions. The Eastern Cape has a history of problems which include backlogs in infrastructure, a lack of administrative capacity, and fraud and corruption. Pensioners were short-changed when government began the lengthy process of streamlining the South African pensions system. The communication draws on press reports covering the period 1997 and 1998, to trace the events which led to the pensions crisis and the background to these events. With the benefit of hindsight, the fiasco highlights the significance of pensions in a rural economy and strong popular reactions to the temporary withdrawal of government transfers to the elderly.


Best, L. 1998. Personal communication. Port Elizabeth Advice Office, February,

Carlisle, A. 1997. Action needed to save welfare. Daily Dispatch, October 31.

Holleman, H. 1997. Old age pensions, disability, maintenance and foster care grants: an investigation into fraud and corruption in the Eastern Cape. Unpublished. Grahamstown: The Black Sash.

Smith, R. 1998. Pension crisis or the soft-shoe shuffle. Unpublished. Grahamstown: Advice Office.

Smith, R., Walton, J., Cewu, C. & MacDonald, G. 1997. The weaving of webs. Unpublished Annual Report. Grahamstown: Advice Office.