Black Sash Speak Out. Ceres, South Africa. Photo Credit: Leopold Podlashuc

BOOK PROJECT

South Africa has the largest social assistance program in the world by GDP, supporting 18 million citizens, 85% of whom are Black women. Between 2012-2018, the South African Social Security Agency (SASSA) outsourced grant payment to a private corporation, Net1 Technologies (NET1). Net1 used their monopoly over biometric and financial data to segregate Black women grantees into an alternative digital banking system on highly unequal terms. Within this segregated bank, grantees were compelled to use their government grants as collateral for high-interest loans in the name of moral improvement and financial inclusion.

While cash transfers are designated for individuals – the elderly, caretakers of children, and people with disabilities – they form the only income available for households and families. This paradox drove recipients toward money lenders, and credit became the only means of caring for a household on an individual grant. When grantees accrued debts, exactly as the welfare system encouraged them to do, they were refigured not as deserving subjects of grants but underserving subjects of debt. 

​My interlocutors questioned the debts levied on their grants, asking, “who really owes what to whom?” In so doing, they repositioned themselves not as debtors but as net creditors to the nation, whose land, labor and lifeways were stolen across generations. Their redistributive demands were not just about asserting their right to a small monthly stipend which is easily paid under prevailing economic conditions, but imagining more radical forms of liberation and economic transformation.

Documentary Film

Esley Philander, Colleen Crawford Cousins, Johan Abrahams, Erin Torkelson (2018) Grant Grabs III: The Easy Pay Card. The Cutting Edge, ​South African Broadcasting Company, 27 March.

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My Writing

journal articles

Erin Torkelson (2022) ​Deserving and Undeserving Welfare State: Cash Transfers and Struggles for Hegemony in South Africa. Journal of Southern African Studies.

The South African welfare program appeared as if it might suddenly end on 1 April 2017, kicking off a significant public outcry by members of parliament, the judiciary, treasury, media, and civil society. At the time, popular explanations of this crisis contended that grants were about to stop because of corruption. Instead, I argue the welfare crisis extended and amplified the hegemonic struggle within the African National Congress (ANC) between two contradictory neoliberal tendencies, which grew out of the post-apartheid transition: a technocratic neoliberal capitalist tendency and a populist neoliberal capitalist tendency. Adherents of each tendency wielded the discourse of deservedness – common in welfare debates for centuries – against people receiving welfare, but also against the political formations vying to deliver welfare. Each claimed to be more deserving of delivering grants and therefore more deserving of holding state power. Ultimately, the 2017 grant crisis helped lead to a shift in power, shoring up South Africa’s very unequal social formation without addressing the exploitation upon which it was based. 

Erin Torkelson (2021) Sophia's Choice: Debt, Welfare and Racial Finance Capital in South Africa. Environment and Planning D: Society and Space. ​39(1).

I examine normative assumptions about cash transfers as public goods and the lived experience of cash transfers as private debts. Policy-makers and social scientists often assume cash transfers are apolitical, value-neutral monetary instruments, which improve upon inappropriate, top-down, universalizing development priorities. Instead, I show how cash transfers introduce their own universals, by imagining liberal sovereign subjects, who use credit and financial markets to manage their own financial and developmental needs. I argue that this narrative elides the deep historical and geographical production of racial difference through debt in South Africa’s Western Cape farmlands. I call this phenomenon racial financial capitalism. First, I trace how coloured people have been racialized through debt for the benefit of capital accumulation across generations. Then, I explore how the contemporary spatial realities of cash transfer distribution continue to racialize grantees as debtors and dispossess them of their social entitlements. Finally, I demonstrate how grantees draw upon transgenerational experiences of debt to demand recognition that they are, and have been, net creditors to the nation.

Erin Torkelson (2020) Collateral Damages: Cash Transfer and Debt Transfer in South Africa. ​World Development 126.

Over the past decade, two development programs — cash transfer and financial inclusion — have been bundled as part of global development discourse. Despite differences in their purported objectives, cash transfers are increasingly delivered via financial inclusion infrastructures and technologies. One under-appreciated consequence of this bundling is the transference of credit and debt to cash transfer recipients. In this paper, I explore how the South African cash transfer program has incorporated recipients into a highly coercive and monopolistic financial system predicated on proprietary technologies. The proliferation of such technologies enables cash grants to be transformed into collateral for credit and encumbered by debts to private companies. Specialized payment technologies encourage recipients to accept loans and ensure that they cannot default, making cash transfer a new site of risk-free profit. By focusing on the materiality of financial inclusion, I demonstrate how the efficacy of cash transfer programs can be undermined, when debts as well as grants are passed on to recipients. 

Named as one of the best social protection papers of 2019 by Ugo Gentilini on the World Bank Blogs.

Book Chapters

Deborah James, David Neves and Erin Torkelson (2022) Savings, Investment, Borrowing: A South African Perspective on Thrift. In Thrift and Its Paradoxes: A Household and Political Economy. Edited by Catherine Alexander and Daniel Sosna. Oxford: Berghahn.

Thrift is a central concern for most people, especially in turbulent economic times. It is both an economic and an ethical logic of frugal living, saving and avoiding waste for long-term kin care. These logics echo the ancient ideal of household self-sufficiency, contrasting with capitalism’s wasteful present-focused growth. But thrift now exceeds domestic matters straying across scales to justify public expenditure cuts. Through a wide range of ethnographic contexts this book explores how practices and moralities of thrift are intertwined with austerity, debt, welfare, and patronage across various social and temporal scales and are constantly re-negotiated at the nexus of socio-economic, religious, and kinship ideals and praxis.

Erin Torkelson, Abby May and Michael Marchant (2022) "Net1 and CPS: Welfare Profiteers." In The Unaccountables: The Powerful Politicians and Corporations who Profit from Impunity. Edited By Michael Marchant, Mamello Mosiana, Ra'eesa Pather, and Hennie van Vuuren. Cape Town, RSA: Jacana.

The Unaccountables skilfully profiles the large corporations and private individuals who are all implicated in economic crime but have never been held to account. This book will anger many, who will now be able to put names and faces to those behind some of South Africa’s biggest corruption scandals, from apartheid to state capture. Crucially, The Unaccountables focuses on 38 profiles detailing evidence of impunity and suggesting actions in each instance that could ensure accountability. Remember, South Africa is a wealthy country. The 2022 Africa Wealth Report estimates total private wealth in South Africa to be over $651 billion, more than R10 trillion. South Africa is home to more than twice as many high-net-worth individuals than any other African country. These acts of violence, for that is what they are, by powerful individuals and corporations have driven millions into poverty. 

Working Papers

Michael Marchant, Abby May, Erin Torkelson and Zen Mathe (2021) Digital Profiteers: Who Profits Next from Social Grants. Cape Town: Open Secrets.

The South African Social Security Agency (SASSA) has a poor record of protecting vulnerable grant recipients from the predatory conduct of private actors that seek to profit from access to their data. Who can forget how it failed to hold Net1 and CPS to account for their abuse of the grants process? This failure is a stark warning that the digitalisation process led by SASSA with new partners requires far greater scrutiny. Already, ‘Big Data’ global corporations like Meta (Facebook/WhatsApp) and smaller local companies are making a play for the future of this new frontier in South Africa. The findings of Open Secrets’ investigation illuminates some of the private actors involved in South Africa’s move to becoming a ‘digital welfare state’. Our investigative report focuses on how the digitalisation of state services offers opportunities for corporations to generate excessive profits from digital systems that can harm vulnerable people.

Engenas Senona, Erin Torkelson, Wanga Zembe-Mkabile (2021) Social Protection in a Time of Covid: Lessons for Basic Income Support. Cape Town: Black Sash.

During the spread of Covid-19 , the South African Government launched several new social grants to help those affected by poverty and unemployment. Their flagship grant, the Covid-19 Social Relief of Distress Grant, targeted 19 to 59 year olds with little or no income, who had been excluded by previous social assistance programs. They also introduced a Caregivers Grant for adults caring for children under 18. This report results from interviews with Black Sash partners and advice offices around the country about their experiences with these grants. The report argues that these grants were vitally necessary, but came with new technological challenges and exclusions. Our report examines how we can learn from these challenges to advocate for universal basic income in the future.

Deborah James, David Neves, and Erin Torkelson (2020) Social Grants: Challenging Reckless Lending in South Africa. Cape Town: Black Sash. 

In mid-2018, the delivery of South Africa's social grants was brought under the Post Office's remit. And yet, even though grants are now distributed by a public entity, debt continues to be implicit in the system. In this report, we argue how social grantees remain a significant market for formal and informal money-lenders. We found that creditors use government grants as collateral for credit because such payments are regular and secure incomes. We also found they charge extremely high (though legal) interest rates based on the erroneous perception that grant recipients are a "risky" market. Given these findings, we are advising the National Credit Regulator, Department of Trade and Industry, Department of Social Development, and the South African Social Security Agency on how to protect social grantees from reckless lending.

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News Paper Articles

Milford Bateman, Patrick Bond, Lena Lavinas, and Erin Torkelson (2023) Grant Distribution Failures Foil Financial Inclusion. Independent Online. 23 September.

The Postbank ‘glitch’ in early September was devastating to 600,000 social grant recipients, and although the problem was solved last week, according to the state-owned bank, advocacy NGO Black Sash reported ongoing crises

Erin Torkelson, Abby May and Michael Marchant for Open Secrets (2023) Net1 and CPS: Welfare Profiteers. Daily Maverick, 25 May.

The most cynical corporations seek to rip off the poor. Few have been as effective as Net1 and Cash Payment Services (CPS). While they have rebranded, they have not paid back their illicit profits owed to millions of South Africans

Milford Bateman, Patrick Bond, Lena Lavinas, and Erin Torkelson (2023) Incoming World Bank President Ajay Banga's Predatory Finance Background Threatens Even More Prolific Bank Poverty-Creation. Z Net. 13 April.

Should the incoming World Bank president, Ajay Banga, be allowed to take office without a full investigation into his predatory-financing history, especially as a visionary leader of MasterCard committed to ‘financial inclusion’? 

Patrick Bond, Milford Bateman, Lena Lavinas, and Erin Torkelson (2023) Incoming World Bank President Ajay Banga Promotes Predatory Financial Inclusion. Committee for the Abolition of Illegitimate Debt. 12 April.

A great deal can be learned from the past decade’s experiences, beginning in South Africa where he authorized a partnership with a partially World Bank-owned data services firm, Net1.
Translated in French & Spanish & Portuguese 

Theresa Edlemann, Engenas Senona, Erin Torkelson, Wanga Zembe (2021) The Covid-19 Grant should be R585 so all People in South Africa can Afford to Eat. GroundUp, ​27 July.

Black Sash launches a report into the implementation and impact of the Covid-19 social grant. The report recommends that the Covid-19 grant becomes a permanent Basic Income Support (BIS) for those aged between 18 and 59 who have little to no income - and that this support is linked to the food poverty line. 

Erin Torkelson, Deborah James, and David Neves (2020) Legal but Reckless: Lending to Social Grant Recipients. GroundUp, 29 October.

It’s not just loan sharks or mashonisas who are charging exploitative interest rates to poor people. Beneficiaries of social grants have become a lucrative market for formal lenders too, and this is slipping past the regulatory authorities, write Erin Torkelson, Deborah James, and David Neves.

Erin Torkelson with GroundUp Staff (2017) Social Grants: Has Belamant Answered His Critics? GroundUp, 9 May.

Net1 CEO Serge Belamant has hit back at critics of the company’s management of its contract with the SA Social Security Agency (SASSA), accusing them of conspiracy theories and political agendas. He has referred investors in his company to a 37-page auditors’ report which according to Net1, “sets the record straight”. But does it?

Erin Torkelson (2017) The World Bank’s Role in SA’s Social Grant Payment System. GroundUp, 23 March.

As the main South African investor in Cash Paymaster Services’ parent company, Allan Gray has been under the spotlight over the social grants payment controversy. As a result, a bigger investor, the World Bank, has not received much attention, writes Erin Torkelson

Erin Torkelson (2017) Sophia’s Choice: Farm Worker has to Decide which Child to Feed. GroundUp, 15 March.

When loan repayments left Sophia*destitute, she had to beg a little money from her cousin and make a terrible choice. Either she could feed herself and her 6-month-old baby, or she could feed her 8 and 13-year-old daughters. She chose the latter. When she stopped eating, she also stopped producing milk. Her baby’s weight dropped by 1/3 in three weeks. Erin Torkelson tells Sophia’s story.

Erin Torkelson (2017) Deductions from Social Grants: How it All Works. GroundUp, 3 March.

As the SA Social Security Agency prepares to negotiate a new social grants payment contract with Cash Paymaster Services, Erin Torkelson unpacks the way CPS parent company Net1 is using the payment system to benefit its subsidiary companies.