by Simone Knapp
The debate around a basic income grant is under discussion once more, whether as short time emergency security or as long-term security for the entire population. However, no country has yet dared to introduce a universal, unconditional basic income (BIG), which is paid to all people from birth to death, regardless of income or assets.
At present, countries such as Namibia or South Africa, where social security systems and a BIG have been discussed since the end of the 1990s, are taking back on it due to the impact the pandemic and the lockdown have on the living conditions of a large part of the population.
South Africa’s social security system in crisis
Under Thabo Mbeki South Africa decided to build a very sophisticated social security system, starting with child support grant, state pension, disability grant and some other support systems.
In 2005, the government established the South African Social Security Agency (SASSA), which manages grants on behalf of the Ministry of Social Development. All applications are subject to a means test, they are therefore not unconditional and not universal. As a result, the system is susceptible to corruption, and those who need it most often lack access – for whatever reason. In addition, there are vacancies. The biggest affects mainly the many unemployed young people over 18, who have no access to basic security. Unemployment assistance (UIF) is only for those who have had a formal job and who have paid in with their employer during this period. Informally employed people usually do not have access to UIF.
Even before the Corona crisis government spent R162.9 billion (8.5 billion €) for over 18 million grant recipients. Unemployment stands at around 40 per cent (including discouraged job seekers), with over 60 per cent of those between 15 and 34. Many of them, especially those who have not completed their education, will never find formal employment. And as a result of the macroeconomic challenges in the global economy, the number of jobs in the formal economy is declining
The informal sector on the one hand and child support grant and pension on the other hand have so far kept families alive. With the strict lockdown due to the Corona pandemic, more than seven million people employed in the informal sector lost their source of income from one day to the next: street vendors were no longer allowed to sell, subsistence farmers could no longer go to their fields, vegetable gardens could no longer be cultivated and small fishermen were no longer allowed to go out with their boats. Children no longer received a meal at school and women could no longer sell their food to schoolchildren or workers during their lunch break.
The government recognized the plight of the people and reacted first by increasing the existing social grants. Child grant was increased by an additional R300 in May and R500 per month from June to October. All other grants will receive an additional R250 each over the next six months.
Food basket and minimum wage
At the same time, spending on food rose by 7.8 percent between March and May. This is not only due to the increased prices in supermarkets, but people changed their purchasing behaviour during lockdown. Mervyn Abrahams, program coordinator of the Pietermaritzburg Economic Justice and Dignity Group, who has been calculating the food baskets of South African families for many years, assumes that people will have to spend 30 percent more on food during the lockdown.
“Up to now,” says Abrahams, “people have been able to buy special offers in different shops. During lockdown they have to queue up and take what they can get in the nearest shop. Normally they would opt to buy rather from street vendors selling their home-made or home-grown products, often much cheaper than the supermarket around the corner.” And there are more people to be fed in the families, because schools are closed and casual workers are at home, too. Soup kitchens and other sources also had to be closed because of Corona. “The shopping basket on 4 May was R3470.92 (181 €). This is more than the national minimum wage of R3321.60 (173 €).” In normal times that was not enough to ensure the survival of the families. Now there is also the increased demand for hygiene products and water.
Solidarity Fund and Social Relief of Distress Grant
The Solidarity Fund was launched on 23 March 2020 in response to the Corona crisis in South Africa. It is a donation platform for the general public, civil society as well as the public and private sectors and has so far mainly distributed food parcels to those in need. In all nine provinces, a total of 250,000 families will be covered with food parcels, which should last for two to four weeks. However, the demand was so great that it was hardly manageable for the fund and the NGOs involved. Support from local and small NGOs was initially prevented by lockdown regulations and a major bureaucratic hurdle.
On 11th May Minister Lindiwe Zulu launched the special COVID-19 Social Relief of Distress Grant. This grant, worth R350 (18 €) per month, seeks to offer some support, over a six month period, to those who have no access to any other form of income.
However, only people over 18, who are either unemployed, have no income or social assistance, do not receive or are entitled to unemployment benefit (UIF), do not receive a state grant and do not live in a state-funded or subsidised institution, can apply.
With that said, what a family currently needs and how prices are currently developing, the amount is downright ridiculous.
“Hardly any of us will receive this grant because we all have children,” reports Thabang Mokoena from Ratanda (Gauteng). Parents who receive child support grant will come away empty-handed. The government assumes that a grant, which is actually targeted to a certain group of people, will provide for the whole family.
Criticism comes from civil society, not least because of the low level. The activists criticise the fact that this subsidy is advertised as a “safety net”, which requires a minimum level of support. However, this COVID-19 grant is neither a sustainable contribution to food security nor is there any kind of universal access to it.
Namibia, the country with the BIG pilot project
Otjivero, a village about 100 km west of Windhoek, became famous for the first pilot project that paid out and scientifically monitored a basic income for all inhabitants of the village under the age of 59. Namibia was also the country long believed to be the first to introduce the BIG nationwide. The reason for this was the appointment of emeritus Lutheran bishop Kameeta as Minister for Poverty eradication and Social Welfare. Kameeta was a symbol for the BIG like no other in the country. But he failed, lost his ministerial post with the second cabinet under President Geingob, without really having done anything for the introduction of the BIG.
All the more pitiful is the government’s attempt to alleviate the plight of many people in Namibia, which was greatly aggravated, if not caused, by the lockdown. The one-time Emergency Income Grant (EIG) amounts to 750 N$ (40 €) per person. On 15 April, about one month after the lockdown was introduced, a total of 110 million N$ was paid out to a first group of 146,974 recipients. A total of 327,528 applications were received nationwide in the first five days after the EIG was announced, of which 180,554 were rejected. According to the Ministry, most rejections were based on false information.
This grant is intended to provide financial support for three weeks to those between 18 and 59 who have lost their income due to Corona and the lockdown. Initially, the government probably assumed that the lockdown would be lifted after three weeks and people could return to work. However, this was not the case. It was extended until 4 May and since then further measures to contain the virus have been introduced, which continue to intervene massively in people’s lives and economies and threaten their livelihoods.
It is not yet known whether the government will repeat the one-off payment.
A Basic Income for all
There are now several campaigns, including the People’s referendum for a Basic Income Grant for South Africa (#BIGNOW), calling for a universal, unconditional basic income of R4500 per person in response to the pandemic:
“South Africa cannot continue a lockdown and confront this pandemic without stronger mitigation measures like a BIG. In the midst of COVID-19, Spain is the first country to commit to rolling out a BIG as a response to the crisis and this will be a democratic systemic reform that will persist beyond the pandemic. The BIG has a history that goes back to the Enlightenment. In the 20th century many experiments and forms of BIG interventions have been tried since the 1970s in the US, Canada, Kenya, Namibia and Finland. Each of these trials where based on specific parameters: target groups, social objectives and levels of income. All the research shows positive outcomes when assessing the social efficacy for the BIG. This has ranged from more investments in human development, less stress, less health costs, greater labour market leverage for workers and less food vulnerability. In the context of the climate crisis and deep just transition the BIG is an absolutely necessary democratic systemic reform to enable the ecological restructuring of our society without harming those least responsible for the problem. If South Africa does not embrace the BIG in the context of COVID-19, together with other public goods, this will be a serious historical mistake and a missed opportunity for a more emancipated future.”
