President Cyril Ramaphosa will reportedly announce an extension of the R350 social relief of distress (SRD) grant when he makes his 2022 State of the Nation Address (SONA) on Thursday evening.
This is according to a BusinessLIVE report which cited “two people with knowledge of the matter.”
Possible SRD grant extension in SONA 2022
According to the anonymous sources cited in the report, the Cabinet agreed on the SRD grant extension because it could not make a firm commitment on a Basic Income Grant (BIG) “in the absence of a funding mechanism.”
Ramaphosa is set to deliver his sixth SONA at 7pm on Thursday (10 February 2022) amid calls for a Basic Income Grant or at least an extension of the SRD grant.
The ANC, in its National Executive Committee (NEC) Lekgotla earlier this year, urged the government to “examine the feasibility and affordability for providing some form of income support for the poor and unemployed going forward.”
Prior to the Lekgotla, Ramaphosa also held a meeting with civil society groups to discuss the SRD grant’s possible extension. The groups included the Institute for Economic Justice (IEJ) and the Black Sash Studies in Poverty and Inequality Institute (SPII).
“Through this grant, the Department of Social Development (DSD) and the South African Social Security Agency (SASSA) have successfully reached many of those most vulnerable in our society. Research has confirmed the positive impact of this grant in reducing poverty and hunger,” the Presidency said after the meeting.
However, some reports have suggested that Ramaphosa is at odds with Finance Minister Enoch Godongwana, who reportedly favours efforts to create jobs instead of a BIG or the R350 grant.
According to a Bloomberg report, 11 members of the President’s Economic Advisory Council argued against a BIG, saying it would be a “policy error” that could reduce spending on other critical budget items such as health, education and infrastructure.
However, four dissenting members of the Council argued for a BIG. In a statement in late January, the Presidency said the leaking of the Council’s report allowed for “selective quotation from the document, often out of context, to support various agendas.”
“Members of the Council hold a range of diverse and nuanced views, which have been presented to the President in various reports and meetings,” the Presidency said.
Analysts estimate that extending the R350 grant would cost the government approximately R45 billion in one financial year.