South Africa’s economy cannot afford 28 million grant recipients

South Africa’s economy cannot afford to support around 28 million people through social grants – regardless of which party is elected.

This is the view of political analyst Professor Andre Duvenhage, who told Newzroom Afrika that social grants have often been used as a political tool to gain favour with voters.

His comments come after President Cyril Rampahosa warned that social grants and the National Student Financial Aid Scheme may be at risk if the ANC does not stay in government.

During the ANC’s birthday celebrations on Monday, 8 January, Ramaphosa said the ANC’s policies have been pro-poor.

“We have done a great deal in the provisioning of grants,” he said. He added that no African country pays grants to 18 million people.

Add to that the 10 million people who continue to receive R350 Social Relief of Distress (SRD) grants, and the government has 28 million people on grants.

Duvenhage said the number of people receiving grants in South Africa over the last decade or two has increased dramatically, “and there’s no doubt that this is a mechanism used by the ANC government to ensure support”. 

“If you look at the total of our population, you will find that about 47% of people in South Africa are currently dependent on social grants, and they will be concerned about losing their grants,” he said. 

However, he said the larger problem is that the government cannot continue to support these grants.

“At the moment, the economy is not growing, and the number of unemployed people increases regularly, so there are major economic and financial challenges,” he said. 

“But I have no doubt that Ramaphosa is using this as a mechanism to persuade people to vote for the ANC.”

He said it is difficult to predict what a new government would do and the policies they would implement since governments have their own policy frameworks, “and depending on their approach to policies, they can rather continue or discontinue this trend”. 

“But what I’m 100% sure about is our economy cannot afford what is sometimes described as the most comprehensive welfare system per capita in the world,” he said.

Currently, around 28 million people are receiving social grants, but South Africa only has 7.1 million individual taxpayers.

This means South Africa now has four times as many grant recipients as individual taxpayers, which many economists have warned is unsustainable.