Strong case for permanent income grant despite South Africa’s money problems, says Ramaphosa
South African President Cyril Ramaphosa again hinted at introducing a basic income grant, saying that there is a “strong case” for it despite the nation’s “fiscal constraints.”
Ramaphosa spoke in his capacity as president of the ruling African National Congress during the party’s annual strategy meeting on Monday (29 January).
Finance Minister Enoch Godongwana will table the nation’s annual budget on 21 February, just months before the ANC heads into its toughest election since coming into power in 1994.
“The challenge remains that millions of working-age adults in our country remain unemployed without any form of support and little prospect of gaining employment until economic growth picks up,” Ramaphosa said at the lekgotla, which sets out the party’s governance priorities for the year.
South Africa’s unemployment rate of 31.9% is one of the highest in the world.
“There is, therefore, a strong case for a permanent form of a targeted income-support grant for the unemployed within our fiscal constraints,” he said. “Discussions should continue among us about what we have termed a basic income grant.”
Ramaphosa said that a temporary stipend introduced during the Covid-19 pandemic – and touted as a possible precursor to a basic income grant – had staved off poverty for more than 2 million people.
Godongwana announced the extension of the R350 monthly payout to March 2025 during his mid-term budget in November but warned that a comprehensive overhaul of the social support system was necessary.
The National Treasury has tried numerous times to shut down the unfunded grant but has repeatedly had to re-introduce it following a series of domestic shocks, including civil unrest in 2021 that led to 50 billion rand in losses to the economy.
The Treasury’s head of budget office, Edgar Sishi, told a central bank conference last year that the institution had battled to sell spending cuts to the government.
“When those things happen, political leaders find it very difficult; they feel constrained in withdrawing the support,” Sishi said.
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