South Africa is going through the biggest disruption in politics since the end of slavery as the African National Congress lost its majority in the general elections on May 29, 2024. The ANC and its political competitors are now involved in a complex period of discussions in order to make the coalition government a result of this historic event.
There will be talk among the political groups to form a new administration in the coming weeks. While many different views exist, more parties like the ANC and its main competitor, the Democratic Alliance mainly agree on the importance of maintaining or increasing the income to support adults. This hod the continuing the monthly COVID-19 relief payments to the poorest households.
Universal Basic Income (UBI): Commitment
A big initiative to change the COVID-19 relief grant into a universal basic income (UBI) has been revealed by the ANC. Before the elections, this announcement is made by the ANC, and as per the Guardian, if they win a new administration then they put the policy into reality within the 2 years.
As per their work status, people aged 18 – 59 will get regular payments under the universal basic income (UBI) if South Africa were to implement it.
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Current State of Social Relief in South Africa
In South Africa, individuals whose monthly income is below the food poverty line are mainly eligible for the Social Relief of Distress (SRD) payment. The ANC makes the plan to assist the adults as they progressively raise the income requirement. This standard of the means test currently excludes the various persons in need because they are predicated on the poverty threshold of the year 2021 which has been subsequently increased.
Basic Income: Historical Context and Global Perspectives
The universal basic income (UBI) is not a new concept. For many years, it has been debated as the potential remedy to grow inequality on a large scale. Elon Musk and other visionaries promote the universal basic income (UBI) as a solution to the automation-related loss of jobs.
Martin Luther King Jr., a civil rights activist takes it as an important tool in eradicating poverty. During the COVID-19 pandemic, when many of the govt gave their citizens financial support, this idea grabbed a lot of attention and attracted individuals.
Economic Benefits of UBI
Direct financial help to the poorest households is given which shows the significant positive impact on the economy. As per Kelle Howson, senior researcher at Johannesburg’s Institute for Economic Justice (IEJ), these payments increase the spending of low-income households which shows the economy. About 93% of the recipients of the SRD Payment as per the IEJ, primarily spend the funds for food, underscore the payment important to their day-to-day existence.
International Case Studies
The possible benefits of the Universal Basic Income (UBI) are supported by a number of foreign case studies. As per GiveDirectly’s extensive UBI trial in Kenya, the recipients increased their lives by the money. They make small businesses, change their diets, and save for big purchases. Other trails from all over the world had similar positive results.
For instance: The Soain has made the program of the anti-poverty payment at the time of the epidemic which gives the 850,000 households €1,015 a month. Adults making less than $99,000 per year were eligible to get $1,200 payments under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the United States.
The UK temporarily increased the payments of the universal credit, distributed £100 billion to pandemic victims, and instituted the vacation system and self-employment support initiatives.
Post-Pandemic Policy Shifts
The political climate changed once the pandemic finished. The various of the govt moves back to the budget cuts to deal with the additional borrowing that takes place at the time of the crisis. As per the research by the National Institute of Economic and Social Research in the UK, extreme poverty is decreased if the govt had kept the payment of the universal credit higher. However, the decision made to stop this higher higher payments resulted in a dramatic increase in poverty, putting more people in financial straits.
South Africa’s Unique Approach
South Africa maintained the awards of COVID-19 despite the demands for more stringent financial regulations, which is against the worldwide trend. There are so many significant protests in the year 2021 into April month, when these grants are not given. These grants were restored by the government by August of that year.
There are several problems with the current system. The Social Relief of Distress (SRD) payments hardly cover the amount required to meet the food poverty threshold, which is insufficient. This makes sure that the money provided is not enough to cover the cost for the necessities.
The millions of eligible individuals will not get the awards every month. many of the individuals find it challenging to get the necessary financial assistance because of issues with the application and distribution processes.
Criticism of the Current System
The IEJ and the #PayTheGrants campaign are strong supporters of the current arrangements. They make sure that the qualified persons are mainly excluded by the automated means-testing and digital application processes, particularly those without depend on connection to the internet.
The Elizabeth Raiters, the South African activist who is mainly unemployed mainly talks about the struggles people who aren’t given help experience daily. The IEJ has made or filed a lawsuit against the govt, claiming that the rules are probably millions of the people to aid.