South Africans can’t live on grants alone, need sustainability

With unemployment at an all time high and South Africa’s high level of poverty, government’s initiative to introduce a new form of income support grant is one of the key risks to the country’s Treasury this year.

And experts are not convinced the ANC has what it takes to fulfil its objectives with the basic income grant following its January 8th statement on Saturday.

South Africa’s unemployment rate rose to 34.9% in the third quarter of 2021, up from 34.4% in the previous period. It was the highest jobless rate since equivalent data began in 2008, according to Statistics SA’s Quarterly Labour Force Survey.

There are questions about government’s long-term strategy and the affordability of the grant.

According to political analyst Dr Ralph Mathekga, this was something which had been spoken about before.

“The question should be, will this be affordable?” he said.

There were too many types of these interventions, he said, adding: “They should remain temporary but end up being permanent.”

When asked whether he thought the ANC would carry this through, Mathekga said the financial stance of the economy was in question.

“With the debt growing, where the money will come from is the challenge,” he said.

According to political economy analyst Daniel Silke, there was a need for a very broad safety net. Silke said South Africans cannot just live on grants.

“There is a wide amount of social income grants. We need to move away from income grants to economic growth and afford real opportunities to job creations for South Africans,” he said.

South Africa is dealing with the smallest number of taxpayers in the world, contributing to the largest amounts.

“It is not sustainable if it will rely upon the hard-pressed taxpayers in South Africa. It is only sustainable if you can grow your economy and direct your revenue that way,” Silke said.

Following the party’s annual event to celebrate its establishment in 1912, President Cyril Ramaphosa said there was a need for a basic income grant.

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The R350 Covid social relief of distress grant is due to end in March.

“We support government’s decision to continue to implement public employment programmes to support unemployed working-age adults and will support its work in consultation with organised labour and other social partners in developing these programmes,” he said.

However, it was argued that South Africa could not afford this. Treasury said last year it was costing about R40 billion a month to extend the grant to March.

Last month, a team of experts appointed by the department of social development, the International Labour Organisation and the United Nations-backed Joint Sustainable Development Goals Fund had recommended the Covid grant be institutionalised and inclusive of the programme for an extended basic income system.

– lungas@citizen.co.za