Durban — Despite repeated warnings by various economists that the government could no longer afford the R350 grants to unemployed people, the ANC has announced that it will keep the grants.
This was announced by party secretary-general Fikile Mbalula during a 2019 manifesto review rally in Pietermaritzburg on Sunday.
Mbalula said the ANC wanted the government to continue paying grants, adding that he had met President Cyril Ramaphosa and asked that the government sort out the issue of non-payment of grants to deserving people.
Various economists have warned that the government has run out of money and options on where to get the money to keep the grants, which are costing the government billions of rand.
Economists said the government would either have to borrow money or increase Value Added Tax (VAT) by at least 2% (at 16% to 18%) to sustain the grants. The economists warned both decisions would have a negative impact because they would affect economic growth.
A decision is expected during the Midterm Budget Speech by Finance Minister Enoch Godongwana on November 1.
The grant, known as the social relief of distress grant, was introduced during the Covid-19 pandemic in 2020 when the country was under a hard lockdown and shutdown. The government continued paying the grants despite ending the lockdown. Earlier this year, the government announced that the grants would continue until March next year, but economists have warned that the state would have to either borrow money or increase VAT to keep the grants.
Mbalula took a swipe at former president Thabo Mbeki, saying sometimes he talked about things the ANC did not like, but party members need not worry about him because when people grow older they slowly “become kids again” in terms of thinking.
“We love former president Jacob Zuma and former president Thabo Mbeki. Mbeki sometimes says bad things about the organisation, but we love him so don’t intimidate him,” said Mbalula.
Mbeki has been critical of the ANC leadership, particularly Ramaphosa.
He started questioning Ramaphosa towards the party’s 54th conference in Nasrec last December, questioning his suitability for the highest party position amid his Phala Phala scandal.
Mbeki attributes the country’s current problems to the lack of leadership both in the government and the ANC.
Mbalula hinted that the ANC would hold its manifesto launch in Moses Mabhida Stadium in Durban, likely to coincide with the party’s January 8 statement celebrations. Provincial chairperson Siboniso Duma said the party had turned the corner since taking power in 2004. It had created jobs by investing billions in infrastructure, he said, singling out Moses Mabhida Stadium whose construction, he said, created 26 000 jobs.
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