Economic advisory council backs R243b taxpayer-funded basic income grant

Cyril Ramaphosa. Image credit: Twitter/The Presidency of the Republic of South Africa

President Cyril Ramaphosa’s Economic Advisory Council has given the thumbs-up to a proposed basic income grant for South Africa, according to a Bloomberg report on Monday.

In a 100-page document presented to Ramaphosa, the Council said such a grant would cost R243 billion per annum and would therefore necessitate tax increases to fund it.

The ANC revived discussions on a basic income grant at its National Executive Committee (NEC) meeting in July this year.

Shortly afterwards, Social Development Minister Lindiwe Zulu provided further details on the proposed grant, saying it is aimed at “lifting South Africans out of poverty.”


“The BIG will be unconditional [and] individually targeted. Since we already have categorical grants for children, older persons and persons with disabilities, BIG will be an income support grant for the population aged 18 to 59,” she explained.

Civil society groups and some political parties, including the Economic Freedom Fighters (EFF) and ANC ally SA Communist Party, have pushed for the grant.

At the launch of its Red October campaign earlier this month, SACP said the government should convert the R350 social relief of distress (SRD) grant into a universal basic income grant.

Council’s proposals

Ramaphosa’s Council also made other proposals to help fund South Africa’s economic recovery, including increases in fuel levy and estate taxes as well as a three-year solidarity tax.

It said pension funds and private investors would support the government’s big infrastructure development plans if there are bankable projects over the next 10 to 20 years.

If further proposed the establishment of an agricultural development fund and construction of up to 6,000 MW of electricity capacity per annum.

Ramaphosa is set to unveil South Africa’s economic recovery plan on Thursday following extensive consultations within the governing ANC and its alliance partners.

Business, labour and community constituencies were also part of the consultations through the National Economic Development and Labour Council (NEDLAC).

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