Dear President Cyril Ramaphosa,
Increase the CSG to protect families and the economy
We, a group of concerned academics, civil society leaders and other development partners, appeal to you to consider our call for an urgent increase to the value of the Child Support Grant (CSG) by R500 for a period of six months. This measure is critical to mitigate the impact on children and families of the lockdown and the current and future economic shocks created by Covid-19. The CSG is the simplest, quickest and most effective way to get cash into millions of poor households that will otherwise face food insecurity and debilitating poverty.
The lockdown is important to contain the virus, but it will increase poverty and unemployment.
International experience suggests that a lockdown is the best response to the virus from a public health perspective, but the economic impacts are devastating for South African households. South Africa already has very high rates of poverty, unemployment and inequality, and the effects of lockdown on work and earnings threaten to exacerbate all these dynamics.
A team of experts commissioned to work on an economic response to Covid-19 has been modelling the possible effects of the lockdown on the informal sector specifically, and the spin-off effects for poverty levels. They estimate that, for households that rely on income from the informal labour market, food poverty rates could more than double over the three weeks of the lockdown period. As the depth of poverty increases more people will go hungry, including millions of children.
Other forms of support have been withdrawn. Before the lockdown over 10 million children were receiving nutritious meals through the school nutrition programme and early childhood development programmes. The closure of schools and early childhood development facilities mean families with children will need to provide more nutritious meals.
Pre-regulation food price increases have swallowed families’ budgets and forced shoppers to buy less nutritious food
A project that monitors food prices found that the cost of a low-income household food basket increased substantially over the first three weeks of March, as the pandemic unfolded in the country. Over the whole month, the cost of the food basket increased by 7%, or R220. This increase alone is equivalent to half the value of the monthly child support grant. The same report notes shifts in purchasing patterns to less nutritious food.
Social grants are an extremely effective mechanism for protecting children and families against the effects of poverty
By the end of March 2020, 84 countries had introduced or adapted social protection and jobs programmes in response to Covid-19. The most widely used intervention was social assistance (non-contributory cash transfers). SASSA cannot enrol new beneficiaries into the social grant system during lockdown because the required verification and biometric requirements cannot be completed. The quickest and simplest way to channel much-needed cash into poor households is via existing beneficiaries.
The child support grant (CSG) is well established. It is by far the biggest grant in terms of numbers, reaching 12.8 million children – nearly two thirds of all children in South Africa. It is received every month by over seven million adult beneficiaries, and contributes to the income of nearly 5.7 million households. Although child support grants are meant to be spent directly on the children to whom they are allocated, they effectively become part of household budgets and help to support entire households. Therefore increasing this grant is likely to benefit other members of the household.
The economic insecurity and poverty-related stresses and anxiety caused by the pandemic directly contribute to increases in violence against women and children. In addition to reducing hunger, economic strengthening will be protective of women and children.
- Registration for SROD of vulnerable households not already receiving grants, including unemployed youth and adults in households without social grants, and new mothers with babies who cannot be registered due to all new birth registrations being on hold during the lockdown. Increasing the cash available for existing grant beneficiaries will place less demand on SROD.
- More cash without addressing congestion at big retailers, in taxis and social grant payment queues is not effective. We therefore recommend that SASSA restructure its payment system to ensure that grants are transferred into beneficiaries’ accounts in a staggered manner.
- Subsidising selected highly nutritious foods.
- Now that lockdown regulations have been amended to allow informal traders of food to continue to trade, extra cash in the hands of CSG beneficiaries will not only increase the ability of poor households to buy nutritious fresh produce, but will also help to reduce the congestion in taxis and at big retailers; and stimulate the local economies of townships and rural areas.
This measure is urgent. We the undersigned call on you to consider this critical issue at the next meeting of the Cabinet or National Command Council.