South Africa's grant system a 'recipe for disaster'

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DURBAN – There are more people who receive social grants than those who are employed and this is a recipe for disaster, say analysts. This comes as the Institute of Race Relations (IRR) released a survey stating that as the economy slows down, it will be harder to sustain social grant payments. IRR analyst Gerbrandt van Heerden said: “In 2016, there were 15545000 people with jobs in South Africa while 17094331 people were receiving social grants.” The study found that in 2001 there were 12494000 people who were employed and 3993133 receiving social grants. This showed a 328% growth in people who received grants and a 24% increase in employed people.

“There is no doubt that the grants rollout did a lot to improve living standards in South Africa. However, the grants have become a double-edged sword.

“The inability to continue expanding the rollout while also increasing the value of grants will see living standards begin to stagnate and even slip.

“Poor and unemployed people will be worst affected and may suffer new misery as their living standards begin to fall,” said Van Heerden.

He felt this was a recipe for disaster.

Economist Professor Bonke Dumisa echoed Van Heerden’s sentiments and said South Africa stood a real chance of becoming a failed state like Zimbabwe or Greece.

Dumisa said what was most concerning was that the base of individual taxpayers was not growing while the amount of people who were receiving social grants was.

The rise in people demanding “freebies” and not asking where the money would come from was also problematic, Dumisa said.

The professor felt South Africa already had a serious budget deficit and this was not sustainable in the long term.

“We are beginning to live beyond our means as a country.”

Dumisa said it would greatly help if politicians stopped making unrealistic promises to people about what they would get.

“The government and Parliament should also be at the forefront of showing that they care about how money is spent; if this was done then the public would also care about money that was spent.

“The private sector should also chip in and invest money in the country instead of hoarding it. This is important as economic growth is mainly driven by consumer spending. South Africans should also buy more South African products,” Dumisa said.

For many, the money they receive is barely enough to eke out a living.

One such person is Malozi Mkhize from eNseleni. The 72-year-old said the R1600 she received was not nearly enough for her needs.

From the money she receives, she spends about R800 on food and clothing, R100 on electricity and about R300 on water from water tankers.

“But that is not the only problem. I live with more than 10 grandchildren who look to me to get things like their school uniform and other things they might need. Some of them no longer have parents and I am their only provider. By this time of the month I am normally broke,” she said.

Phoenix resident Nelson Muthusamy said if it was not for his three children supporting him he would not be able to make ends meet.

The 73-year-old said both he and his wife of 47 years now live a simple lifestyle.

“We make do with what we have. Today is our 47th wedding anniversary but we can’t do anything because there is no money.” he said.

Muthusamy said he spent about R1000 on groceries and about R2000 on electricity and water. For necessities like medical aid, he relied on his children.

Daily News