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Social protection system stimulates economic growth – Ramaphosa

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President Cyril Ramaphosa

President Cyril Ramaphosa says expanding the social protection system is one of the critical tools government has implemented to ensure that some of the needs of the most underprivileged South Africans are addressed while also stimulating economic growth.

The President said this when he addressed the nation through his weekly newsletter.

He emphasised that contrary to what some may believe, expanding the social wage is “not simply an indication that more people need grants today than before”.

“The Social Relief of Distress Grant [SRD Grant] that was introduced in 2020 in response to the Coronavirus pandemic has reached more than 11 million people at its peak, and has lifted millions of people out of food poverty. According to research, approximately 50 percent of the purchases made by SRD grant recipients are groceries.

president cyril ramaphosa

president cyril ramaphosa

“Social grants also act as a stimulus for the economy as a whole, increase spending in townships and rural areas, and improve employment outcomes. An interview-based study by the University of Johannesburg of informal traders…found that the SRD Grant stimulated customer spending, provided capital to purchase stock, and enabled the new businesses to be initiated,” he said.

President Ramaphosa insisted that in a similar vein, the Presidential Employment Stimulus Initiative (PESI) has also provided a platform for participants to gain a foothold in the labour market.

“[Many] participants in the…PESI have gone on to find work after they have completed the programme. The school assistants programme has provided opportunities for 750 000 young people to date in over 22000 schools, reaching every corner of the country.

“Over 72 percent of participants in the PESI said that having gained their first work experience, the programme helped them to gain a foothold in the labour market thereafter. In all of these ways, South Africa’s world-renowned social protection system provides important benefits for many in our society, not only those who receive social grants,” he said.

The President said the social protection system also provides benefits to those who are not receiving grants.

“It supports economic growth from the bottom up, enables business activity, and strengthens social solidarity and stability. It is one of the greatest achievements of our democratic society, and one that we should all be proud of,” he said.

President Ramaphosa reaffirmed government’s commitment to addressing inequality through means that show real benefits.

“The SRD alone represents a significant step in our commitment to provide a minimum level of support below which no South African should fall. [We] are working on options to provide basic income support for the unemployed, within our fiscal constraints, beyond the expiry of the SRD Grant in April next year. [We] are working on options to provide basic income support for the unemployed, within our fiscal constraints, beyond the expiry of the SRD Grant in April next year.

“If the focus of our struggle for liberation was to end apartheid and achieve political freedom, the focus of our efforts now must be to address inequality and ensure that every South African enjoys the fruits of democracy,” the President said.

Honing in further on inequality, President Ramaphosa highlighted that government is making steady progress in addressing the challenge while also implementing reform.

“It is now well recognised that inequality constrains growth, and that growth which takes place in unequal societies tends to reproduce those patterns of inequality.

“This is why our economic policy is guided by the need on the one hand to implement structural reforms to stimulate growth and enhance our economic competitiveness, while on the other hand expanding social protection and public employment and supporting the social wage,” President Ramaphosa said.

Beyond the benefits and upsides of the social protection system, President Ramaphosa reminded the nation that social security is also a right protected by the highest law in the country – the Constitution.

“The right to social security is explicit in the Bill of Rights. This is an approach that recognises that social security is essential to other rights, including the right to dignity. It is this right that has underpinned the progressive expansion of South Africa’s social protection system over the past three decades.

“In 1999 just over 2.5 million people were receiving social grants. Today that number has increased to over 18 million people. In addition, more than two million indigent households also receive free basic water, basic electricity and solid waste removal services as part of this government’s commitment to free basic services for the poor,” President Ramaphosa said. – SAnews


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