South African President Cyril Ramaphosa again hinted at introducing a basic income grant, saying that there is a \u201cstrong case\u201d for it despite the nation\u2019s \u201cfiscal constraints.\u201d<\/p>\n\n\n\n
Ramaphosa spoke in his capacity as president of the ruling African National Congress during the party\u2019s annual strategy meeting on Monday (29 January).<\/p>\n\n\n\n
Finance Minister Enoch Godongwana will table the nation\u2019s annual budget on 21 February, just months before the ANC heads into its toughest election since coming into power in 1994.<\/p>\n\n\n\n
\u201cThe 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,\u201d Ramaphosa said at the lekgotla, which sets out the party\u2019s governance priorities for the year.<\/p>\n\n\n\n
South Africa\u2019s unemployment rate of 31.9% is one of the highest in the world.<\/p>\n\n\n\n
\u201cThere is, therefore, a strong case for a permanent form of a targeted income-support grant for the unemployed within our fiscal constraints,\u201d he said. \u201cDiscussions should continue among us about what we have termed a basic income grant.\u201d<\/p>\n\n\n\n
Ramaphosa said that a temporary stipend introduced during the Covid-19 pandemic \u2013 and touted as a possible precursor to a basic income grant \u2013 had staved off poverty for more than 2 million people.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
The Treasury\u2019s 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.<\/p>\n\n\n\n
\u201cWhen those things happen, political leaders find it very difficult; they feel constrained in withdrawing the support,\u201d Sishi said.<\/p>\n\n\n\n