There are pros and cons to the basic income grant, says Ramaphosa

President Cyril Ramaphosa says the government is still weighing up its options on how it can make the basic income grant a reality for millions of poor South Africans.

“All those balls are still in the air and come February we should be able to give a clear signal and direction as to where we are going,” said Ramaphosa in a recent interview with SA journalists on the last leg of his West African tour last week.  

Ramaphosa’s remarks contribute to an ongoing discussion on how the government is going to finance the basic income grant.

On Monday TimesLIVE reported that a team of experts has recommended that the Covid-19 special relief of distress grant be institutionalised and form part of the platform for an expanded system of basic income which can be improved over time.

A report on basic income support for people aged between 18 and 60 years old was launched on Monday by the department of social development, together with the International Labour Organisation and the UN Sustainable Development Goals (SDG).

The department and the two entities reportedly appointed a panel of experts to conduct economic and social research.

The experts noted that, “While the social affects are quite moderate for lower values of the grant when introduced at the level of R1,300 per month, poverty measured at the FPL [food poverty line] and LBPL [lower bound poverty line] is almost eliminated. In these scenarios income inequality also improves dramatically from 0.65 to 0.55.

“While we accept that the widespread income poverty prevalent in SA society cannot be eliminated overnight, we recognise the urgency of the situation and recommend that a policy framework be implemented that places the value of the BIS [basic income support] at the UBPL [upper bound poverty line] as soon as is sustainably possible.”

Ramaphosa told journalists in Senegal last Tuesday that the matter has been raised “many times”, even in ANC circles.

“There are a number of pros and cons to a basic income grant and the issue of the basic income grant becomes even more urgent as a result of the unemployment situation that we face.”

With 12.5-million unemployed people facing poverty, Ramaphosa said, “We saw it when we introduced the special relief Covid-19 grant that there were so many people who applied and were relying on the R350. So already we have indicators that there is a great need out there.”

He said various factors needed to be considered before a permanent solution was implemented.

“Can we afford it with where our economy currently is? What is the best option? Is it continuing with the grant while creating jobs, at what level should it be and who should be covered?”  

In an interview with the Sunday Times in January, Ramaphosa shared the same sentiments, saying: “That is the biggest challenge. I think the case is being made and has been made for a grant of some sort to try to uplift the livelihoods of South Africans, and the question is where do you peg it, and we need to debate that.

“I think we need to examine the question of the efficacy of the basic income grant and thereafter ask yourself, do we have the financial resources to support it?”

TimesLIVE