Public Management

SA’s govt says it will maintain basic income project despite Covid-19 and economic crisis

SA’s govt says it will maintain basic income project despite Covid-19 and economic crisis
Tuesday, 12 January 2021 13:38

The South African government says it will introduce a population-targeted universal revenue system by the end of this year. Speaking during the 109th anniversary of the ANC party, President Cyril Ramaphosa (pictured) said the project will help establish a social safety net for the poor people in the country and improve the existing social aid systems.
  
The basic income or universal income is an amount allocated to the population at a specific periodicity, individually and unconditionally. An official ANC document, relayed by Bloomberg, revealed the amount is R500 ($32) for citizens aged 19 to 59 who are not eligible for other forms of assistance.

The government sees the project as a more sustainable and secure solution, as the allocations initially set up to deal with the covid-19 pandemic are set to end soon. As a reminder, although the initiative has been on the government’s agenda for years, the fallouts of the coronavirus pandemic have highlighted its urgency. Indeed, the negative prospects such as the increase in the unemployment rate during and after the crisis reinforce the need to implement this system.

However, its deployment is hampered by the difficult economic situation suffered by the rainbow nation. According to several observers, South Africa does not have sufficient economic resources to engage in such a project. For 2020, the country expects an estimated growth of -7.8%.

Also, the liquidity problems of public enterprises (Eskom and SAA) which have weighed heavily on the state finance in recent years, coupled with investment needs in key economic sectors are another barrier to the universal income system.

“This year, the ANC, government and broader society will need to continue discussions on the desirability and viability of a basic income grant to provide a social safety net to the poor,” the President said.

Despite this scenario, the government argues it bets on tax levies on salaries to recover the amounts to be granted under the universal basic income system.

Additional Info

  • communiques: Non
  • couleur: N/A
On the same topic
Cameroon, Congo, and Gabon seek new IMF programs after previous ones expired Regional bloc commits to sustaining reforms and rebuilding...
Program has supported about 50 women-led businesses since 2023 Nearly CFA7 billion mobilized combining financing and technical support New cohort of...
Proparco and RMBV take minority stake through $91 million capital increase Funds to support industrial expansion and West Africa growth Group...
Net profit drops 14% to CFA19.25 billion in 2025 Cost of risk nearly doubles, cutting operating income Bank shifts toward more liquid assets amid...
Most Read
01

Firms move beyond payments toward integrated SME platforms Services include invoicing, inve...

African fintechs are moving beyond payments - and into business operations
02

Cameroon signs MoUs for $1.5 billion waste-to-energy projects Plans target waste treat...

Cameroon Signs $1.5 Billion Waste-to-Energy MoUs Amid Urban Sanitation Strain
03

MTN Mobile Money Zambia partnered with Indo Zambia Bank to enable payments via bank POS terminals....

MTN Zambia Links Mobile Money to Bank POS in New Partnership
04

UBA UK, BII sign intent to expand trade finance in Africa Partnership targets funding gaps for in...

UBA, British International Investment explore Africa trade finance deal
05

The BCEAO now allows UEMOA citizens abroad to open CFA franc accounts under the same conditions as...

West Africa Targets Diaspora Funds With New Banking Access Rules
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

regie@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72


EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.