Presentation | Basic income and inclusive development in South Africa

Neil Coleman
Presentation to South African Society for Parental and Enteral Nutrition
25 October 2023

Introduction

Basic income and inclusive development in South Africa unpacks South Africa contemplating the implementation of a Universal Basic Income Guarantee (UBIG) to counteract its severe crises of hunger, poverty, unemployment, and inequality. This imperative reflects the nation’s commitment to fostering inclusive development in the face of complex challenges.

Overview

As the nation stands at this critical juncture, a comprehensive understanding of the landscape is vital. South Africa’s profound crises, deeply rooted in hunger, poverty, unemployment, and inequality, demand urgent and innovative interventions. The proposed Universal Basic Income Guarantee (UBIG) serves as a beacon of hope, aiming to address not only immediate concerns but also the structural issues that have perpetuated these challenges.

The Political Economy and Urgency

The urgency for a UBIG is underscored by the depth of South Africa’s crises, where over a quarter of the population faces hunger, more than half live in poverty, and unemployment rates exceed 42%. The nation’s status as the most unequal globally further emphasizes the necessity for swift and impactful interventions.

The SRD Grant: A Window of Opportunity

The introduction of the Social Relief of Distress (SRD) grant during the COVID-19 era has been a crucial step. Despite political contestation and fiscal pressures, the SRD grant has provided emergency cash transfers, offering tangible relief and opening a political pathway towards a more permanent Basic Income.

Navigating Political Contestation

The political landscape is complex, with divergent views on the future of the SRD grant. While Treasury seeks to terminate it, the President and the Department of Social Development advocate for its improvement and transition into a Basic Income Grant. This political contestation occurs against the backdrop of the 2024 elections, adding an additional layer of complexity.

Austerity and the Path Forward

The austerity framework that South Africa has operated under for the past decade poses significant challenges. However, it is acknowledged that a progressive Basic Income Grant is not possible within the constraints of austerity. Financing options, including wealth taxation and the reorientation towards inclusive economic growth, are key to the success of such a transformative initiative.

The Macroeconomic Impact and Future Scenarios

Beyond being a fiscal expense, a Basic Income Grant can serve as a catalyst for economic activity and social well-being. Different scenarios, ranging from low to high ambition, model the potential impact of a Basic Income in addressing South Africa’s socio-economic challenges within a broader policy framework.

Conclusion

In conclusion, the journey towards a Universal Basic Income Guarantee in South Africa is not just a response to immediate crises but a transformative pursuit of inclusive development. Navigating political complexities, fiscal challenges, and envisioning a future where the most vulnerable are uplifted, South Africa’s commitment to change is a beacon of hope for a more equitable and prosperous nation.