Riots Spur South Africa to Consider Paying Stipends to Poor

A week of deadly protests in South Africa has given impetus to proposals that the government pay out cash stipends to address the high levels of poverty and inequality that fueled the unrest.

“The basic income grant is being given serious consideration,” President Cyril Ramaphosa said in an online lecture on Sunday. “It is being discussed in the governing party and at government level.”

Discussions about the aid are taking place as the Treasury and the presidency consider a separate support package for businesses and individuals affected by the turmoil, in which at least 212 people died. The violence left key infrastructure damaged or destroyed and may slow the nation’s recovery from a 2020 economic downturn.

South Africa has one of the world’s most unequal societies. The top fifth of the population receive more than 68% of income, compared with 47% for an index of emerging markets, data published by the International Monetary Fund in 2020 showed.

Riots Spur South Africa to Consider Paying Stipends to Poor

South African civil rights organizations and the country’s largest labor group, the Congress of South African Trade Unions, last week called for the urgent introduction of income grants to bring relief to millions who are jobless or been adversely affected by the coronavirus pandemic fallout. The nation’s unemployment rate stands a record 32.6%.

Ramaphosa acknowledged the need for change in his weekly newsletter on Monday.

“We need to fundamentally transform our economy and our society, deepening our efforts to create employment, lift millions out of poverty and ensure that the country’s wealth is shared among all its people,” he said.

A document circulated by the ruling African National Congress last year suggested that paying grants to all South Africans aged 19 to 59 who aren’t normally eligible for other aid would cost the state 197.8 billion rand ($13.7 billion) a year. As much as 60% of that amount could be recouped by levying extra taxes on those with jobs, it said.

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