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Release peace: the magazine

Release peace: the magazine

Analysis & Background Stories on International Affairs

The Basic Income Grant Debate in South Africa

Article by: Jordan Mc Lean

Campaigning for Income Support

Wherever you live, it is likely you have heard of COVID-19 income support payments throughout 2020 and 2021, but what if you heard that these grant programs are here to stay? That is exactly what South African civil society is demanding.

Undesirably holding the spot as the most unequal society in the world, based on the GINI coefficient, South Africa’s socio-economic challenges are multifaceted. In the past, the liberation government deployed social grants to vulnerable parts of the population, but has been hesitant to assist working-age adults who cannot find employment in a sluggish economic environment. The Basic Income Grant debate has been reinvigorated by South Africa’s youth and greater civil society who argue that basic income is not a utopian ideal, but a practical solution to tackle issues of widespread poverty and inequality.

A History of Social Grants in South Africa

Although South Africa’s democracy was not established until the end of apartheid in 1994, the country is no amateur when it comes to realising social justice. According to Harvard Law scholar Cass Sunstein, the South African Constitution is regarded as one of the most progressive in the world, and enshrines the ideals of freedom, tolerance and equality for all citizens. The ruling African National Congress (ANC) has long recognised the inequalities it would inherit, mostly along racial lines. The ANC strengthened the country’s social grant system that, as per the national statistics department, now reaches one in three South Africans. The government has historically responded to the socio-economic vulnerability through non-contributory social grants. For example, evaluations of the Child Support Grant in South Africa attest to the government’s understanding of intersectional issues confronting mothers and children in their formative years. The grant is recognized for its gender responsiveness and clear targeting of food insecurity, poor education, and high unemployment rates among young mothers. The Child Support Grant has led to higher rates of school attendance and higher nutrition levels among young children, while alleviating some of the economic burdens of child-bearing.

Persisting Problems

Despite such government-led initiatives to address inequality and poverty, these problems persist while slow economic growth has stunted job creation and reinforced people’s dependence on what little the state can provide. The right to social assistance is enshrined in Section 27(C) of the constitution and yet the largest portion of people without the means to take care of their basic needs -the unemployed- have received minimal state support.

The Basic Income Grant Proposal

In order to assess the potential impact of a Basic Income Grant on poverty and unemployment one can look at the support measures during the COVID-19 pandemic as a reference: The COVID-19 Social Relief from Distress Grant (COVID-19 SRD Grant). In that programme, just over 60 per cent of applicants were under the age of 34 while 90 per cent used the grant to purchase basic food items. A long-term formalisation of this grant could consequently help address issues of food poverty and remediate some of the economic effects of unemployment on the above age group. In addition, South Africa has already made major gains in granting access to education and basic services to marginalised groups and instituted affirmative action policies to encourage the economic participation of the country’s Black population.

Stepping Stones

The current Basic Income Grant debate, as articulated by the Minister for Social Development Lindiwe Zulu, is that the COVID-19 SRD grant should be used as a ‘stepping stone’ to the Basic Income Grant. Further, where the constitution enshrines each individual’s right to social assistance, it states that the achievement of all its ideals should be progressive, meaning that it is unlikely a universal Basic Income Grant would be implemented in South Africa soon, but that we can expect income support for the unemployed population soon. The Department of Social Development states that the aim of the current social security reform process is for all social grants in South Africa to eventually converge into a universal basic income. The Basic Income Grant would likely be targeted and unconditional, but with limited eligibility for those aged 18-59.

The Future of the Debate

The temporary income support provided by the COVID-19 SRD grant is set to end in March 2023. Recently, President Cyril Ramaphosa promised that the administration would consider possibilities for a Basic Income Grant. However, the message of the administration is marked with hesitancy. The proposed cost of the Basic Income Grant, set at the level of the COVID-19 SRD grant of 350 rands monthly (US$20), would be R139 billion per year, rising to R232 billion (roughly US$13 billion) if raised to the country’s food poverty line, which rests at R585 (US$33). To hedge the development of an already strained economy on a major expansion of social spending makes ministers and businesses understandably cautious. Meanwhile, proponents argue that more progressive taxation could realise this goal with the moral and financial buy-in of the wealthy minority.

Looking Ahead

The evolution of the South African Basic Income Grant debate is already providing useful information for supporters and opponents of basic income projects in other countries. South Africa’s social protection system is regarded as one of the most expansive in the developing world. March 2023 and the final decision on the Basic Income Grant, will test the strength of the South African government and can serve as an insightful case for other countries who wish to adopt or resist calls to implement similar systems.

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