Why SA’s new Finance Minister ‘may end all hopes’ of a Basic Income Grant

Enoch Godongwana hasn’t been in the job for more than 72 hours – but South Africa’s new Finance Minister is already taking major strides to outline his stance on certain policies. After replacing Tito Mboweni on Thursday, the 64-year-old has explained that he is ‘not a fan’ of a possible Basic Income Grant (BIG) for SA citizens.

Enoch Godongwana could torpedo Basic Income Grant

In a wide-ranging interview with the Sunday Times, Godongwana seemed to take a differing path from his predecessor… and several other high-profile members of the ANC Cabinet. Following the success of the R350 grant, the clamour for a Basic Income Grant – guaranteeing the poorest members of the society a small income – has grown.

It’s estimated that over four million people could be in line for a handout of over R1200 each month, should BIG come into effect. Such an exercise would cost the Treasury tens of billions of rand each year, and funds would have to be pulled from elsewhere to make this proposal a reality. The new Finance Minister, therefore, is wary of the idea.

Finance Minister not ‘BIG’ on financial handouts

He believes that a better approach to tackling poverty and joblessness would be to ‘invest in skilling’ working-age youths. Godongwana proposes that money should be ploughed into training and learning courses, in both an academic and practical sense, which would then give unemployed young adults a springboard into work.

• Minister Godongwana states that money intended for a Basic Income Grant should be used as a stipend for those in training.

“A Basic Income Grant can create reliance. People are missing the point: about 4.2-million of these people that are unemployed — using the narrow definition — are young people between 15 and 35 years. My argument is that we must invest in them. Even the amount we may spend could be more than a grant,”

“What we need to do is invest in skilling these kids, and obviously, they will have some cash which will be a stipend or per diem. And in addition let’s get them better development of skills.”