President Cyril Ramaphosa has reaffirmed his commitment to implementing a permanent Basic Income Grant in South Africa during his 2024 State of the Nation Address. This move aims to provide long-term support for those facing unemployment and financial distress in the country.
Ramaphosa announced plans to extend and enhance the existing Social Relief of Distress (SRD) Grant as a precursor to the establishment of the Basic Income Grant. The SRD Grant, initially introduced in response to the Covid-19 pandemic, currently assists approximately 9 million unemployed individuals each month with a R350 allowance. However, the Basic Income Grant is intended to build upon and broaden this support system.
With South Africa grappling with one of the highest unemployment rates globally, at 31.9%, the SRD Grant remains a vital lifeline for millions of citizens who struggle to secure employment opportunities. Ramaphosa addressed concerns regarding fostering dependency on grants, asserting that the primary goal is to shield the unemployed from the perils of poverty rather than perpetuate reliance.
Despite the lack of specific details, Ramaphosa’s administration aims to unveil comprehensive plans for the Basic Income Grant during the upcoming 2024 Budget Speech. Minister of Social Development Lindiwe Zulu has hinted at various funding models under consideration, including potential increases in taxation, reallocation of existing budgetary resources, or borrowing.
Notably, the Department of Social Development has already allocated a significant portion of its budget towards grants, with 96.4% of the R263 billion budget earmarked for this purpose. For the 2023/2024 fiscal year, R253 billion has been allocated for direct cash transfers, with an additional R36 billion dedicated to extending the Covid-19 SRD Grant until March 31, 2024.
As the government navigates the complexities of implementing a Basic Income Grant, the focus remains on addressing systemic issues of poverty and unemployment while ensuring fiscal sustainability and economic resilience. The forthcoming budgetary allocations and policy decisions will play a crucial role in shaping the future trajectory of social welfare in South Africa.