For the almost 9 million adults who receive the SRD grant the promise by the President, in his State of the Nation Address (SONA), that the grant would be expanded, brought hope in their daily struggle to have enough food to eat. In his Budget Day speech, the Minister of Finance promised a bigger grant, despite there being no money for the increase in the Social Development budget vote.
Against this promise of an expansion and improvement of the grant, the announcement by the Minister of Finance on Wednesday of an increase of a meagre R20 per month from 1 April smacks of a disconnect with the food precarity millions face and amounts to empty political opportunism. This is neither an improvement nor an expansion as current and draft regulations are and will prevent at least 7 million people every month from receiving the grant.
The newly announced R20 increase is not enough to reverse four years of zero inflationary increases, nor is it sufficient to cover even the minimum energy intake for an individual which was costed by Stats SA at R760 per month for 2023. The current amount of R350 has not been adjusted to keep pace with inflation since the introduction of the grant in 2020. In real terms, this implies a decrease in the grant value individuals are receiving of around 20%.
The increase must account for value lost to inflation since 2020, in other words, an increase which retains the R350 value in real terms. If the grant is increased to be in line with rising prices alone, then the value in 2024 should be between R440 or R467 based on food inflation. This would merely mean a stabilisation of its 2020 value, without any real increase. So this at minimum requires an increase of R90. Any increase which fails to meet this threshold would be regressive. This is contrary to the Minister of Finance’s acknowledgement that “we are sensitive to the increase in the cost of living”. Even with the R20 increase, recipients are R70 poorer than they were in 2020 because the cost of living is not being factored in.
This speaks to the austerity budget that undermines constitutional obligations The Minister of Finance allocated a budget of R44 billion in anticipation of 10.5 million beneficiaries qualifying for the grant in 2022, which was reduced in nominal terms to R36 billion in 2023 and now further reduced to R33,6 billion in 2024. This begs the question of how the grant amount and access to the grant will be improved with a further reduced budget. We are concerned that the meagre increase will encourage government to further limit who qualifies for this grant given the budget allocation, rather than to ensure that all those who need the grant can access it. The budget allocated determines the number of applicants who qualify. Given the further constrained budget, the intended consequence of being exclusionary by default will continue to limit who will qualify for the grant despite the need.
The increase should at least partially compensate beneficiaries for the loss in value of the grant which they have experienced over the last four years. Calculating the loss of value over four years is a proxy because while the great majority of beneficiaries may have received the grant for four years, not all of them have – further, many (at least two and a half million) beneficiaries who were benefiting by March 2022 were excluded from the grant after the new iteration came into effect.
The SRD grant has a high rate of exclusion errors, estimated at approximately 50% of eligible persons. These exclusion errors result from barriers to application, approval, and appeal for the grant, which are systemic, and derive directly from the inadequate budget allocation for the grant. Government agencies have conceded that they privilege the reduction of inclusion errors over the reduction of exclusion errors. This approach directly leads to a higher rate of exclusion and undermines the Constitutional obligation on the government to progressively realise the right to social assistance.
Government has committed itself to the introduction of a Universal Basic Income when the government can afford it. There have been over 50 pilots of UBI programmes globally that demonstrate that a UBI generates economic growth and jobs, as well as meeting basic needs. It would also meet the state’s constitutional obligations. The empirical evidence shows that growth follows the UBI, not the other way around. It is time the state is led by evidence, not its ideological opposition to inclusive social security.
We call on the Minister of Social Development and the Presidency to reject this unilateral decision by the Minister of Finance and to hold him accountable to the promise of a better life for all.
[ENDS]
For media inquiries:
- Black Sash | media@blacksash.org.za
- Bukelwa Hans | GRAPE | 082 651 5070
UBIC is comprised of the following organisations:
- Alternative Information and Development Centre (AIDC)
- Black Sash
- Basic Income Earth Network (BIEN) Africa UBI Observatory
- Children’s Institute, UCT
- Congress of South African Trade Unions (COSATU)
- Global Reformed Platforms for Engagement (GRAPE )
- RightfulShare An Income Movement
- Institute for Economic Justice (IEJ)
- #PayTheGrants
- Social Policy Initiative (SPI)
- Women on Farms Project
- Youth Lab
Amaarah is a Junior Programme Officer in the Rethinking Economics for Africa project. She is currently studying towards her Masters in Applied Development Economics at Wits University. 
Dr James Musonda is the Senior Researcher on the Just Energy Transition at the IEJ. He is also the Principal Investigator for the Just Energy Transition: Localisation, Decent Work, SMMEs, and Sustainable Livelihoods project, covering South Africa, Ghana, and Kenya.
Dr Basani Baloyi is a Co-Programme Director at the IEJ. She is a feminist, development economist and activist. She gained her research experience while working on industrial policy issues in academia, at the Centre For Competition, Regulation and Economic Development (CCRED) and Corporate Strategy and Industrial Development (CSID) Unit.
Dr Andrew Bennie is Senior Researcher in Climate Policy and Food Systems at the IEJ. He has extensive background in academic and civil society research, organising, and activism. Andrew has an MA in Development and Environmental Sociology, and a PhD in Sociology on food politics, the agrarian question, and collective action in South Africa, both from the University of the Witwatersrand.
Juhi holds a Bachelor of Arts degree in International Relations and Sociology from Wits University and an Honours degree in Development Studies from the University of Cape Town. Her current research focus is on social care regimes in the South African context, with a particular focus on state responses to Early Childhood Development and Long-Term Care for older persons during the COVID-19 pandemic. Her other research areas include feminist economics, worlds of work and the care economy.
Bandile Ngidi is the Programme Officer for Rethinking Economics for Africa. Bandile has previously worked at the National Minimum Wage Research Initiative and Oxfam South Africa. He holds a Masters in Development Theory and Policy from Wits University. He joined the IEJ in August 2018. Bandile is currently working on incubating the Rethinking Economics for Africa movement (working with students, academics and broader civil society). 
Liso Mdutyana has a BCom in Philosophy and Economics, an Honours in Applied Development Economics, and a Masters in Applied Development Economics from Wits University. His areas of interest include political economy, labour markets, technology and work, and industrial policy. Through his work Liso aims to show the possibility and necessity of economic development that prioritises human wellbeing for everyone.
Joan Stott holds a Bachelor of Business Science in Economics and a Master’s in Economics from Rhodes University. She brings to the IEJ a wealth of experience in public finance management, policy development, institutional capacity-building, and advancing socioeconomic and fiscal justice.
Siyanda Baduza is a Junior Basic Income Researcher at IEJ. He holds a BSc in Economics and Mathematics, an Honours degree in Applied Development Economics, and is currently completing a Master’s degree in Applied Development Economics at the University of the Witwatersrand. Siyanda’s research focuses on the impacts of social grants on wellbeing, with a particular focus on the gendered dynamics of this impact. His interests include applied micro-economics, policy impact evaluation, labour markets, gender economics, and political economy. He is passionate about translating economic research into impactful policy.
Shikwane is a Junior Programme Officer at IEJ focusing on civil society support and global governance in the G20. He has a background in legal compliance, IT contracting and student activism. He holds degrees in Political Studies and International Relations, as well as an LLB, from the University of the Witwatersrand.
Dr Tsega is a Senior Researcher focusing on Women’s Economic Empowerment within the G20. She examines gender equity in economic policy, with expertise in food systems and small enterprise development. She holds a PhD in development studies from the University of the Western Cape, an MA in Development Economics, and degrees in Development Studies and Economics from UNISA and Addis Ababa University.
Nerissa is a G20 Junior Researcher at IEJ, focusing on advancing civil society priorities within the G20 framework. She bridges data, research, and policy to advance inclusive economic frameworks. She is completing a Master’s in Data Science (e-Science) at the University of the Witwatersrand, and holds Honours and Bachelor’s Degrees in International Relations with distinction. She has worked as a Research Fellow at SAIIA and a Visiting Research Fellow at Ipea in Brazil.
Dr Mzwanele is a Senior Researcher supporting South Africa’s G20 Sherpa with policy research. He holds a PhD in Economics from the University of Birmingham and an MSc from the University of the Witwatersrand. His work covers open macroeconomics, trade, finance, and higher education policy, and he has published widely on inequality, unemployment, household debt and higher education curriculum reform.
Kamal is the Project Lead for IEJ’s G20 work, focusing on sovereign debt and development finance. He holds a BComm (Hons) in Applied Development Economics from the University of the Witwatersrand and an Erasmus Mundus Joint Masters in Economic Policies for the Global Transition. He has worked with SCIS, UNCTAD and co-founded Rethinking Economics for Africa.