Ramaphosa promises Basic Income Grant for South Africa is coming

 ·25 Feb 2024

The ANC has again promised to introduce a permanent Basic Income Grant (BIG); however, the party has not committed to any timeline.

The proposal was again put forward by President Cyril Ramaphosa at the party’s manifesto launch on 24 February.

Ramaphosa echoed his State of the Nation Address (SONA) earlier in the month by again laying out that the ruling party would “progressively implement a basic income support grant by extending and improving the value and coverage of the Social Relief of Distress (SRD) grant for the unemployed.”

He told a packed Moses Mabhida stadium this weekend that these plans would “prevent vulnerability and destitution as a result of the loss of income through social insurance for workers.”

Ramaphosa and the ANC have long been advocating for a permanent targeted income-support grant for the unemployed, citing the lack of support for millions of working-age adults without employment prospects.

According to analysts, the R350 SRD is the most likely target for conversion into the BIG as it is one of the only sources of financial support for millions of South Africans who are unable to find employment. South Africa’s unemployment rate of 32.1% is one of the highest in the world.

At the 2024 budget on 21 February, Finance Minister Enoch Godongwana provisionally allocated funding for the SRD through to March 2027, despite it only officially being extended to March 2025 – adding fuel to the speculation that the grant will eventually be converted to a permanent BIG.

The finance minister remained coy about how the actual conversion to a BIG would happen, however.

The SRD grant has been allocated R33.6 billion in 2024/25 with provisional allocations of R35.2 billion and R36.8 billion for the 2025/26 and 2026/27 financial years, respectively.

At the State of the Nation Address on 9 February, the president noted that 60% of the national budget is spent on social wages. The president has often said that the SRD grant now supports 9 million unemployed people monthly, while fact-checkers say the real number of recipients is closer to 7.7 million.

Ramaphosa has also shrugged off the critique that the grants have been establishing a “dependent society” – saying that it rather serves to protect the unemployed from the threat of poverty.

According to Treasury projections, the number of people receiving grants is expected to increase from 27.78 million in 2023/24 to 28.31 million this year.

National Treasury’s estimate of individuals and taxable income for 2023/24 illustrates a problem, however. It shows South Africa has 7.1 million individual taxpayers, down from 7.4 million a year ago.

So, while social grant recipients are rapidly increasing, South Africa’s registered taxpayers are declining.

South Africa now has four times as many grant recipients as individual income taxpayers.

Read: ‘Basic Income Grant’ to stick around until 2027

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