Social grants have become a lifeline for many South Africans with more than 19 million people depending on these payments.
But with sluggish economic growth, high unemployment and rising public debt, can the country sustain its expansive social safety net?
Economy expert Dr Khwezi Mabasa says research proves that you cannot grow the economy if there are high levels of inequality.
Therefore, inequality needs to be addressed to allow more people to participate in the economy and drive growth.
According to Mabasa, social grants not do not hurt the economy but help it.
“Grants decrease poverty, and supplement work and livelihoods in the informal economy. At the same time there is a relationship between access to grants and improved childhood performance schooling.
“It is also clear that social expenditure assists to drive demand which is an essential part of the growth. We will not grow the economy if there are high levels of inequality” he adds.
Mabasa points out that questions should not be about if the country can sustain social grants, or viewing it as a social transfer, but looking at its power in the social economy.
Minister of Finance Enoch Godongwane will reveal possible social grant increases in his Budget Speech.
For the 2024/25 financial year, the Department of Social Development’s budget was R275 billion.
From this, R266 billion was used to pay 28 million social grants, including around 9 million beneficiaries receiving the Social Relief of Distress Grant.
Social grants remain a major source of income for half of South Africa’s population.
This hit home when eNCA visited Alexandra in northern Johannesburg were pensioners explained how they rely on social grants every day.
Peggy Khoza, 71, is a Sassa beneficiary and lives in the area. She revealed that with just R2 700 she supports her three grandchildren, the youngest being 9-years old.
She also uses this money to pay for transport to the hospital to receive cancer treatment and get medication.
“I travel to Joburg for R20 and from there come back with R18. I was diagnosed with cancer in 2023 and ever since then I have been going to the hospital every week.”
While medical costs are covered, Peggy also needs to pay for groceries at home, as well as basic school necessities for her grandchildren. She is the sole provider after the children’s mother passed away.
“Without this money I am nothing and the fact that I can get it every month I thank God,” she said.
Mina Mokoewbna, 78, is also grateful. She uses a portion of her pension to contribute to a stokvel for groceries.
But, she says it is not enough.
Simon Shabalala, 77, agrees. He’s also hoping that the minister will announce a significant increase to social grants.
“I support at least seven grandchildren. One of which is 22 and is in college. Although he gets NSFAS, I still need to assist with spending money,” he said.
By Zandile Khumalo