Sona 2024 promises: Will SRD be ‘improved’ to Basic Income Grant?

During his State of the Nation Address (Sona) on Thursday evening, President Cyril Ramaphosa gave South Africans the assurance that government will “extend and improve” the R350 Social Relief of Distress (SRD) grant.

“We have seen the benefits of this grant and will extend it and improve it as the next step towards income support for the unemployed,” the president revealed at the Cape Town City Hall during his sixth Sona.

The R350 SRD grant – which was introduced during the Covid-19 pandemic – is currently one of the only sources of monthly financial support for nine million people.

South Africa’s unemployment rate of 31.9% is one of the highest in the world.

Next step for SRD grant: Sona promise of extension and increase

“These grants and subsidies do much more than give people what they need to live. They are an investment in the future,” Ramaphosa further said during his last Sona before the 2024 elections.

Social assistance has been shown to increase school enrolment and attendance, lower drop-out rates, and improve the pass rate. 

Will SRD grant be converted into Basic Income Grant?

So, what are the chances of National Treasury and the Department of Social Development delivering on the president’s Sona SRD grant “promise”? And does this mean it would become the much anticipated Basic Income Grant (BIG)?

Political parties, such as the GOOD, as well as civil society organisation Studies in Poverty and Inequality Institute (Spii), have called on the government on several occasions over the years to institute a Basic Income Grant (BIG) of R1 268.

This is almost four times as much as what SRD grant recipients receive.

During the ANC January 8th statement this year, Ramaphosa hinted at instituting a Basic Income Grant.

The SRD grant makes “a strong case for a permanent form of targeted income support grant for the unemployed within our fiscal constraints”, the president said at the time.

ALSO READ: Basic Income Grant: What it’s all about

Cyril in Wonderland?

But what are the chances of government delivering on the president’s SRD grant Sona promise? And does this mean it would transform into a Basic Income Grant?

Political analyst at the University of Johannesburg, Professor Theo Venter, echoed the general sentiment among political parties about Ramaphosa’s Sona: That the president is out of touch with the reality of the daily struggles of many South Africans.

Venter told Netwerk24 that – according to his Sona – it appears that Ramaphosa wants to convert the SRD grant into a Basic Income Grant.

According to him, South Africans will have to wait and see what will transpire from Finance Minister Enoch Godongwane’s 2024 Budget Speech on 21 February.

“The president are making promises which the country cannot afford,” he added.

ALSO READ: ‘Ramaphosa just lied’: Opposition parties slam Sona speech

Black Sash weighs in on ‘unfulfilled’ Sona promises

In a media statement following Ramaphosa’s address, Black Sash highlighted the discrepancies between commitments made in previous Sona events and the actual allocation of resources to South Africans living under the poverty line by the National Treasury.

The human rights organisation said social grant beneficiaries continue to carry the burden of the failures of state institutions, such as the South African Post Office’s (Sapo) ability to pay grants, which led to a business rescue and the cession of its Sassa contract to Postbank. 

“A third of those living in South Africa receive social grants, yet the government fails to prioritise the most vulnerable to ensure that they receive the full value of the grant on time to be able to survive.

“Budget cuts appear to be at the core of this failure to efficiently and effectively administer social grants,” the statement read.

NOW READ: 150 000 Sassa grant beneficiaries not paid in January

No concrete plans

Despite the continued calls for the establishment of a Basic Income Grant, no concrete plans or details have been presented yet.

Last year, Deputy President Paul Mashatile agreed that the R350 SRD grant is not in line with inflation and will be reviewed in 2024.

In reply to a parliamentary question at the end of last year, Social Development Minister Lindiwe Zulu revealed that the following funding models are being explored for the proposed Basic Income Grant:

• An increase in taxation;
• Re-allocation of current budget allocations; or
• Borrowing.

ALSO READ: Basic Income Grant: ANC govt considering funding options, says Lindiwe Zulu

SRD grant extension

Currently, the Department of Social Development has allocated 96.4% of its R263 billion for grants; meaning R253 billion has been allocated in the 2023/2024 financial for direct cash transfer payments.

R36 billion will be used to fund the extension of the Covid-19 SRD grant until 31 March 2024.

At the time of Godongwana’s Medium-Term Budget Policy Statement (MTBPS) last year, GroundUp reported that – to keep up with inflation – the SRD grant should ideally be increased to R413.

NOW READ: Sassa SRD grant 2024: Dates, applications and possibility of an increase…

Sassa ‘glitches’ and fraud

The South African Social Security Agency’s  (Sassa) has been making headlines for its failure to make grant payments on time in September 2023, as well as in January this year, due to “system and verification glitches”.

The Citizen reported last year that the agency “lost” more than R50 million due to fraud and corruption within its ranks over the past two years. 

ALSO READ: It’s officials, our govt officials! Zulu admits workers fleeced Sassa of R50m in two years