income grant

South Africa’s unemployment rate is one of the highest in the world. Image: Pixabay

Ramaphosa hints at income grant as elections draw closer

Ramaphosa says talks on basic income grants should continue as South Africa grapples with a 31.9% unemployment rate.

income grant

South Africa’s unemployment rate is one of the highest in the world. Image: Pixabay

President Cyril Ramaphosa has again said that there is a “strong case” for introducing a basic income grant despite South Africa’s “fiscal constraints.”

Ramaphosa spoke in his capacity as president of the ANC during the party’s annual strategy meeting on Monday. This lekgotla sets out the party’s governance priorities for the year.

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Discussions should continue

Finance Minister Enoch Godongwana will table South Africa’s annual budget on February 21, just months before the ANC heads into what many believe to be the toughest election since the ANC came 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.

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“There is, therefore, a strong case for a permanent form of a targeted income-support grant for the unemployed within our fiscal constraints,” he added.

“Discussions should continue among us about what we have termed a basic income grant.”

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Income grant “staved off poverty”

Ramaphosa noted that a short-term allowance, introduced during the Covid-19 pandemic and seen as a potential precursor to a basic income grant, kept over 2 million people from poverty.

During his mid-term budget last November, Godongwana announced the extension of this R350 monthly payout to March 2025, but emphasised the need for a comprehensive overhaul of the social-support system.

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The National Treasury has attempted to terminate the unfunded grant, but has had to reintroduce it on multiple occasions due to several domestic shocks, like the 2021 civil unrest that cost the economy R50 billion.

Head of Budget Office Edgar Sishi told a central bank conference last year that Treasury had battled to sell spending cuts to government.

“When those things happen, political leaders find it very difficult; they feel constrained in withdrawing the support,” he said.