‘COVID grant will be made permanent’: Bank of America
According to a Bank of America report, the COVID grant will be made permanent and possibly confirmed in the February 2024 budget speech.
Economists from Bank of America believe the COVID grant will be made permanent in South Africa, despite the lasting negative impact it may have on the economy. As reported by Daily Investor, referring to a Bank of America Emerging EMEA: South Africa report, it believes the COVID grant will be made permanent.
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NOT ‘IF’ BUT ‘WHEN’
According to Bank of America Senior Economist, Tatonga Rusike, the COVID grant will be made permanent despite enduring risks to the country’s fiscal health. With the National Treasury announcing budget speech day for Wednesday 21 February 2024, many will wait with bated breath to see if that is indeed the day of the announcement.
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COVID GRANT WILL BE MADE PERMANENT
Whether it should be made permanent or not is a whole other discussion. The Social Relief of Distress (SRD) Grant was conceived during the COVID pandemic but has been extended annually ever since. This is despite the R350 government stipend to more than 10-million people accounting for 0.5% of South Africa’s annual GDP. And being rife with bureaucratic challenges and corruption.
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In the run-up to the 2024 National Elections in May, President Cyril Ramaphosa has trumpeted his party’s ‘pro-poor’ policies, saying our 28-million grant recipients is the most in Africa. However, Finance Minister Enoch Godongwana has also been outspoken about the population’s over-reliance on government grants.
BASIS FOR BASIC INCOME GRANT
Bank of America’s Rusike says it has taken the position that the COVID grant will be made permanent as a basis for an eventual Basic Income Grant (BIG). He says the mechanics of withdrawing it will be too difficult given the ‘structurally high unemployment’ and National Election in May 2024. “Discussions and technical work have focused on how the COVID grant will be made permanent going forward,” concluded Rusike.
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