South Africa’s R350 monthly temporary grant for unemployed people will cost the fiscus R27 billion for the next seven months.
Finance Minister Tito Mboweni today unpacked details of the Social Relief of Distress Grant which was extended until the end of March 2022.
Mboweni was expanding on a range of measures announced by President Cyril Ramaphosa on Sunday to support the recovery of the economy and provide relief to the poor.
Ramaphosa said this relief was made possible by the slight improvement in the country’s revenue collection.
In 2020, the government started paying a R350 monthly grant to qualifying unemployed South Africans as the economy was severely impacted by the Covid-19 pandemic.
“This R350 no matter how small it might be goes a long way in assisting our people,” Mboweni said.
“It will cost R27bn which we have to find in the system.”
Treasury director-general Dondo Mogajane said there was a R36bn package available to provide financial support for all spheres of society.
"We are not going to borrow. I want to emphasise that the package will not increase our borrowing requirement,” Mogajane said.
Mboweni said that the economic effects of the Covid-9 pandemic were compounded by recent civil unrest in Gauteng and KwaZulu-Natal.
He added that the damage caused by the destruction and looting recently had cost eThekwini Municipality about R15 billion alone.
Mboweni said that this did not add to positive value in the economy, which was expected to rebound 4.2 percent after contracting by 7 percent in 2020.
“The impact of the restrictions occasioned by Covid-19 has had serious negative implications for the economy,” Mboweni said.
“The National Treasury now projects that we will only go back to the pre-Covid situation in 2023.”