A basic income support grant to address poverty

SOUTH Africa remains one of the most unequal countries in the world.

- CAROLYN CHISADZA

The country's per-capita expenditure Gini coefficient, a measure of how spending from income is distributed, stands at 0.65. This puts it among countries with the most unequal distribution of spending globally.

Nearly 55% of the population were living in poverty in 2023. The country also has one of the highest unemployment rates in the world: 33.5% in the second quarter of 2024. To compound these issues, economic growth has stagnated since 2008.

Ending extreme poverty, unemployment and inequality requires economic growth that includes more people. To get that result, there must be a set of interventions that work together. One intervention being considered in South Africa is basic income support to relieve poverty among unemployed citizens.

Prior to the COVID-19 pandemic, basic income support had been on the policy agenda in South Africa for at least two decades, since the Taylor Committee in 2001.

The pandemic made existing inequalities worse through job losses. A “social relief of distress” grant was introduced in 2020 to support the unemployed.

The grant targeted those affected by sudden income loss, including unemployed working-age individuals who did not qualify for other grants. The introduction of the grant renewed interest in the concept of a universal basic income, or a more comprehensive form of income support. It highlighted the welfare potential for a more permanent basic income support system.