Finance minister Enoch Godongwana says that the government will present further interventions on South Africa’s social safety net in the February 2022 national budget.
Presenting his Medium Term Budget Policy Statement (MTBPS) on Thursday (11 November), Godongwana noted that the R350 social relief of distress (SRD) grant is coming to an end in March 2022. The grant was initially introduced to assist South Africans impacted by the Covid-19 lockdown and was reinstated after riots took place in parts of the country in July.
To date, Godongwana said the grant had benefitted approximately 9.5 million South Africans. This is over and above the existing social security grants.
“Today, 27.8 million South Africans are social grant recipients. This accounts for about 46% of our population. At the same time, the number of people working has declined, further underlining the critical flaws in our economy,” he said.
“Our total spending on the social wage is also very high. This amount has grown from R860 billion in 2018/19 to R1.1 trillion in 2021/22.”
Overall, the South African government is acknowledged as having one of the most comprehensive and expansive social security systems globally, and there are ongoing discussions about the social safety net, he said.
“Details on our interventions with regards to the social security net will be provided in the February 2022 Budget. Let me, however, reiterate that a permanent solution in responding to these challenges is to achieve high and sustained levels of economic growth.”
The government has faced increased calls to replace the R350 social distress grant with a form of basic income grant (BIG).
Data published by the World Bank in September shows that a third of South Africans are beneficiaries of a social grant directly, which rises to close to two-thirds when those who benefit indirectly are included.
The World Bank recommends the basic income grant take the form of a “jobseekers’ grant, targeted at the unemployed. It said that a job-seekers grant, set at R350 a month, could cost R16.2 billion a year.
“The dilemma of the future of South Africa’s social assistance system rests in the opposing pull of these two forces: The limited political appetite for cost-saving reforms and the need to consolidate expenditures,” the World Bank said. “Feasible options for broader reform hence need to balance political will and the need to contain costs.”
Earlier this week, South African Federation of Trade Unions (Saftu) general secretary Zwelinzima Vavi called for the introduction of a R1,500 monthly grant aimed at South Africans over the age of 18 without work.
“People are starving and without food. To end this, the state should look to progressively introduce an unconditional universal basic income grant. We need a basic income grant now for those between the age of 18-59 for those who are without a stable income.”