‘Basic Income Grants Will Not Fix South Africa’s Economy’, Says Tito Mboweni.. Former finance minister and former governor of the SA Reserve Bank Tito Mboweni says fixing the country’s economy requires rebuilding infrastructure, not basic income grants.
Mboweni, who was speaking at the PSG Konsult annual conference, shared insight into what he thinks SA needs to do to fix the social-economic crisis.
He said economic growth will remain stagnant if government does not focus more on investment instead of social grants.
“A challenge for fiscal policy is that it needs to shift into investment and not public sector wages and social grants. Let us not waste the opportunity of the commodity tax windfall,” he said.
Mboweni said though there was huge poverty issue, basic income grants were not the way to go.
“As people go around talking about basic income, they have to be careful about where we want to take the country to. Yes, there is huge poverty and we must make interventions, but I’m not sure a basic income grant is where we should go.”
He said if he was president, he would clean up municipalities, fix roads and invest in infrastructure development, saying the construction industry is a huge creator of jobs.
Earlier this year President Cyril Ramaphosa extended the R350 social relief of distress grant until March 2023 .
The grant provides support to millions of unemployed South Africans who are most vulnerable to the impact of the Covid-19 pandemic.
Previously, Mboweni said the R350 grant goes a long way to assist people, no matter how small it might seem.
He said the grant cost the government R27bn.
“This money is meant to respond to the situation in which our people find themselves,” said the former minister.
“No matter how small it may seem, that R350 goes a long way and we will have to find that R27bn somewhere in the system. Looking after our own is not a cost but an investment.”