South African social policy after Covid-19: New policy imperatives?

Introduction

When South Africa was drawn into the global orbit of the Coronavirus (Covid-19) pandemic, it was not only thrust into the unknown, but its policy instruments were tested to the limit. Nevertheless, its welfare regime was already expansionary before Covid-19, with 60% of the national budget being spent on social wages, including the provision of free services to indigent households and social grants to support millions of South Africans (National Treasury, 2023; Ramaphosa, 2023). During the pandemic, one of the policy instruments which was relied upon by the government, to safeguard the lives and livelihoods of South Africans, was social policy. Interestingly, as the pandemic unfolded, social policy was elevated to a more innovative space to tackle the health, socio-economic and other ramifications of Covid-19. This reflective paper ponders on some of the social policy innovations which emerged during the Covid-19 pandemic. Thereafter, it addresses this in comparison to the post Covid-19 era and revisits some of the supposedly temporal measures which were pursued in the said period. By doing so, it re-examines them in the light of the country’s efforts to rebuild itself after the pandemic and considers if they could be deemed as fitting a more structural, long-term welfare state type of reform. The paper then tries to determine whether some of the policy positions carried over from the pandemic can be considered as new policy imperatives. Specifically, the paper addresses the Social Relief of Distress (SRD) ‘Covid’ grant and the Basic Income Grant (BIG).

Background and context

It is important to note that during the initial months of the Covid-19 pandemic, the government quickly implemented social policy measures to alleviate the suffering of the citizens. Evidently, the pandemic had brought economic hardships for South African households, with vulnerable people living in rural, peri-urban and informal settlements being at higher risk than others (Zhou et al., 2023). This situation stemmed from a constrained economic environment which was typified by the closure of firms and especially small businesses, and workers losing their jobs, among others, due to the national lockdown. Due to this, South Africa’s economic recovery has been a slow and painful process. According to Statistics South Africa (Stats SA) (2020), the economy took almost 2 years to recover from the worst of the Covid-19 pandemic. After plummeting in the second quarter of 2020 – when lockdown restrictions were at their most stringent – South Africa’s gross domestic product (GDP) clawed itself back to pre-pandemic levels in the first quarter of 2022 (Q1: 2022). Compared with 51 other nations, South Africa’s recovery has been sluggish, according to data from the International Monetary Fund (IMF) (Stats SA, 2020).

Some of the social policy measures which were implemented by the African National Congress (ANC) government during the pandemic were inter alia: the disbursement of the Unemployment Insurance Fund (UIF) to help workers who had lost their jobs, instituting tax relief measures, disbursement of relief funds, emergency procurements, wage support through the UIF and funding small businesses to deal with the shocks of Covid-19. In terms of wage support, the Temporary Employer/Employee Relief Scheme (TERS) provided funds to businesses (or directly to employees) to pay wages. In addition, the Department of Social Development increased access to food relief from an initial 1.1 million to 3.3 million people to ensure food security for individuals and families impacted negatively by the national lockdown (Noyoo, 2021).

It is of critical importance that some of the government responses which had started off as temporal or stop-gap social policy interventions have become key policy imperatives in this post Covid-19 period. It is quite ironic that Covid-19 has brought these issues to the centre of social policy formulation and implementation after decades of government reluctance or ambiguity.

SRD

During the lockdown, the government rolled out a massive social relief and economic support package of ZAR 500 billion (as of 4 May 2023, 1 US$ is equivalent to ZAR 18.27), amounting to around 10% of the country’s GDP after it was first introduced in May 2020. This was a special Covid-19 ‘Social Relief of Distress Grant’ of ZAR 350 per month, which was paid out to individuals who were unemployed and did not receive any other form of social grant. Initially, the government had thought that this would only be implemented for a brief period of 6 months (Noyoo, 2021). However, as the pandemic progressed and as more needs were identified and met through this grant, the SRD was extended several times. After the pandemic, there was consensus in government and generally across South Africa that the SRD should not be discontinued. In his State of the Nation address in February this year, the president of South Africa, Cyril Ramaphosa, asserted that millions of South Africans could not provide for themselves and their families due to the difficult economic climate. To counter the rising cost of living, Ramaphosa informed the nation that the government would continue providing the SRD grant to the citizens, which, at the time, amounted to around 7.8 million people (Ramaphosa, 2023). Thereafter, the grant was extended by the Minister of Finance until March 2024.

Universal BIG

After an 18-year hiatus, the BIG was thrown back into the limelight during the Covid-19 health crisis. In January 2020, Ramaphosa announced to the country that his administration was committed to introducing the BIG. In July of the same year, the Minister of Social Development, Lindiwe Zulu, reiterated her government’s stance on BIG as a policy alternative (Noyoo, 2021). Since the pandemic, there have been strong indications from policymakers that this issue is still being seriously considered. For instance, in his budget speech this year, the Minister of Finance, Enoch Godongwana, intimated that the SRD would be discontinued and retranslated into the BIG which would be accessed by citizens on a permanent basis. He also alluded to the fact that there would be a need to raise taxes if there was such a policy shift (National Treasury, 2023).

Under the current proposals, a BIG would hinge on the following criteria:

• It would be payable to anyone aged 18–59. However, it would start from 18 to 24 and then 50–59.

• It would be around ZAR 500 per month.

• It would not be based on unemployment but would be available to anyone not receiving any other benefit, including UIF support.

• It would be administered by the agency that pays the current grants via a pre-paid card-based system (Businesstech, 2020).

Assuming the grant was ZAR 500 per month, as proposed by ANC policymakers, the maximum cost would be around ZAR 210 billion a year for the full age range or starting at ZAR 77 billion for the narrower set of ages (Businesstech, 2020).

Conclusion and policy implications

In a way, Covid-19 had served as a wake-up call to countries that had been over applying neo-liberal approaches to social policy worldwide, including South Africa. Covid-19 had inadvertently made some countries revert to much bolder and interventionist measures, which had been abandoned at the altar of neo-liberalism (McCloskey, 2020; Saad-Filho, 2020), to save both lives and livelihoods. It is within this context we should locate the government’s embracing of the SRD and BIG. Regarding policy implications, this stance is a major shift which could have far-reaching consequences for the fight against poverty, inequality and unemployment in South Africa. It would be prudent and strategic for the government not to discontinue the SRD altogether, but turn it into a jobseekers’ grant, given the fact that the idea has already been mooted and discussed in ANC policy circles, the government and society at large. Arguably, such a grant would help to stimulate the job-seeking process and its costs would be offset when individuals forfeited it once they found employment. In a country that has high levels of poverty, inequality and unemployment, this should be a key social policy imperative.

Author biography

Ndangwa Noyoo is a Professor at the University of Cape Town (UCT). He holds a Doctor of Philosophy (PhD) from the University of the Witwatersrand, Master of Philosophy (MPhil) in Development Studies from the University of Cambridge and Bachelor of Social Work (BSW) from the University of Zambia. He was a postdoctoral fellow at the Fondation Maison des Sciences de l’Homme (FMSH) Paris, France (2005–2006). He previously served as the Head of the Department of Social Development at the University of Cape Town (UCT) (2018–2020), Chief Director (Social Policy Specialist) in the South African government’s National Department of Social Development (2007–2014) and Deputy Head of Department of the School of Social Work, University of the Witwatersrand (2007).