Aid Economy Financial Inclusion Government Social South Africa

South Africa to introduce universal income grant – minister

South Africa will introduce a universal basic income grant, the Minister of Social Development Lindiwe Zulu said on Monday, unexpectedly reviving a two-decades-old plan with the aim of supporting millions of unemployed.

The country already has one of the continent’s most generous social security nets, but the COVID-19 pandemic has added to the need both to protect its fragile economy and its high number of unemployed.

Zulu did not give details of how the grant would be funded or its size, but told a virtual press briefing it would be paid “post-October”.

Before the COVID-19 pandemic, the government had planned to spend ZAR 309.5B (US$18.51B) on social security payments this year.

The pandemic prompted President Cyril Ramaphosa to announce in late March a temporary top-up of those grants by up to 300 rand, including a 350 rand unemployment grant, lasting six months.

A universal grant had seemed unlikely, given soaring public debt and following an emergency budget that proposed sticking to ZAR 230B in spending cuts.

The treasury did not immediately respond to telephone calls and emails from Reuters seeking comment.

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The universal grant will target around 33 million people between the ages of 18 and 59. South Africa’s poverty line, including non-food expenses, calculated by Statistics South Africa, is around ZAR 1,270 (US$76.04). That would put the annual cost at roughly ZAR 42B, calculations by Reuters found.

Isobel Frye, director of the South African-based Studies in Poverty and Inequality Institute and a Minimum Wage Commissioner, said the universal grant had been discussed by government over the last 10 months, but the treasury had been reluctant to fund it.

“It was unexpected but incredibly welcome. It suggests there’s been a lot of reflection about the inadequacy of the ZAR 350 COVID grant,” Frye said.

Source: Reuters

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