Pretoria envisions a basic income for the poorest, a first in Africa

Since the establishment in May 585 of an exceptional monthly aid of 350 rand (about twenty euros), three letters make the headlines of South African newspapers and are repeated in many political speeches: the BIG, the “basic income grant”. This permanent basic income is at the heart of all discussions. According to President Cyril Ramaphosa, it could become a reality in the country, thanks to the health crisis and the riots of last month “This special Covid aid – 19 could very well be a springboard to establish a basic income” added the Minister of Social Development, Lindiwe Zulu, detailing at the beginning of the month the reinstatement until next March of the payment of 350 rand.

Something to rejoice all those considering that the social assistance usually paid to 10 millions of South -Africans are not enough to cover their needs, while unemployment affects more than 26% of the population. “We have seen a big change, and people are now taking this idea much more seriously” explains Aliya Chikte, a researcher who worked with the Institute for Economic Justice (IEJ) on different possible models.

Food poverty threshold However, it remains many questions to be decided, especially around the universality or not of such an income, because the current temporary aid of 80 does not concern for the moment that South Africans without a job and not receiving any other social assistance (except family allowances). The YEI also stresses that this sum is not enough to cover a person’s food needs and campaigns to set a minimum of 585 rand (approximately 33 euros), i.e. the food poverty line.

Beyond these different choices, discordant voices are being heard inside the government, starting with the new Minister of Finance. “What is needed is to invest to develop the skills of young people” hammered Enoch Godongwana to the Sunday Times, denouncing a state of “perpetual dependence” created by social assistance.

Taxation of the richest The question of financing is also cringe, while the country is crushed by a debt that is equivalent to nearly of 80% of GDP. “For now, thanks to the high price of raw materials, tax revenues are better than expected, and this therefore gives the illusion that the country can afford it” warns economist Isaah Mhlanga.

For Aliya Chikte, the solution lies in the taxation of the richest, and the elimination of tax loopholes, while South Africa is the ‘one of the most unequal countries in the world. “By combining several sources of funding, this would unlock nearly 0001 billion euros per year. ”

A bad idea according to Isaah Mhlanga, who fears that it” encourages the richest to emigrate, when tax rates are already high. The chief economist of the group Alexander Forbes does not see any indirect positive effects either, insofar as “these are funds that will be dedicated to consumption, but most of our goods are imported, so it will not create no local jobs. The debate is therefore still far from being settled. The discussions in the coming months within the executive and civil society will be decisive.