Finance Minister Extends SRD Grant for Another Year

Finance Minister Extends SRD Grant for Another Year. In a pivotal announcement made by the Finance Minister on Wednesday, the fate of the SRD grant, a lifeline for numerous vulnerable South Africans, was unveiled. As the COVID-19 pandemic continues to adversely impact millions, the government initially introduced the SRD grant to provide essential support to South Africans facing financial distress with no other means of income.

Extension of SRD Grant

On Wednesday afternoon, Finance Minister Enoch Godongwana presented the Medium Term Budget Policy Statement, divulging that the SRD grant would receive a one-year extension, securing its continuity until March 2025. This development comes in response to the pressing needs of those who depend on the SRD grant for economic stability.

Budget and Funding 2023

The 2023 Budget clarified that the COVID-19 Social Relief of Distress grant had been funded only until March 2024. The government has proposed adjustments to the fiscal framework to allocate funds for the grant throughout the 2024/25 period. An estimated R34 billion will be earmarked to cover the extension of the R350 grant, safeguarding assistance to the most vulnerable in South Africa.

Review of Social Grants

Finance Minister Godongwana emphasized the government’s commitment to finalize a comprehensive review of social grants, reflecting their dedication to improving and enhancing the social safety net for South Africans.

Social Spending Focus

Over the 2024 medium-term expenditure framework (MTEF) period, a significant portion of consolidated non-interest spending, approximately 61%, will be directed towards the social wage. This encompasses public spending on various critical aspects such as health, education, housing, social protection, transport, employment, and local amenities.

Large Scale Social Protection

Godongwana noted that a substantial portion of these funds, specifically R945.9 billion, will be allocated to social protection transfers, which include the old age grant, the child support grant, the disability grant, and the COVID-19 social relief of distress grant. South Africa’s social protection expenditure program, measured as a percentage of gross domestic product (GDP), stands out as one of the most substantial among developing nations.

The Future of the Grant

Addressing the potential permanence of the SRD grant, Godongwana disclosed the department’s expectations. Should the grant become a permanent fixture or a similar grant be introduced, the number of beneficiaries is anticipated to rise significantly. From 27.3 million in 2023/24, the count is projected to surge to 40.4 million by 2040/41, with corresponding costs increasing to 3.8% of GDP in 2040/41.

Conclusion

However, sustaining such a substantial increase in beneficiaries would necessitate a permanent source of funding, potentially involving additional revenue measures to ensure the grant’s long-term viability. The government continues to explore avenues to meet the evolving needs of its citizens in the face of economic challenges and uncertainties.