South Africa's Social Grant Expenditure to Peak at R266 billion in 2024

The National Treasury of South Africa has laid out its financial projections for the coming years, detailing a substantial investment in the country's social grant system. In the 2024/25 fiscal year, it is estimated that R266.21 billion will be channeled towards social grants, constituting 3.6% of the Gross Domestic Product (GDP). This marks a notable rise from the preceding year, where R250.97 billion was allocated to similar welfare programs.

However, the Treasury's forward-looking stance indicates a decrease in expenditure on social grants for the years to follow. Projections for 2025/26 and 2026/27 peg spending at R248.41 billion and R259.79 billion, respectively, each representing 3.1% of GDP. These figures are part of a larger monetary strategy where R1.17 trillion is dedicated to social assistance and the strengthening of welfare services over the medium-term expenditure framework (MTEF) period. Social grants are fundamental to these plans, consuming 81.8% of the spending function over this term.

A key aspect of the country's social welfare program is the exclusion of the COVID-19 Social Relief of Distress (SRD) grant from regular grant tallying. Expenditure on established social grants is set to increase from R217.1 billion in 2023/24 to R259.3 billion by the end of 2026/27. This is a measure to maintain pace with inflation and widen the reach to individuals eligible for these services. Despite the pandemic-induced economic casualties, the SRD grant allocation will witness a slight decrease from R33.89 billion in 2023/24 to R33.6 billion in 2024/25.

The number of South Africans reliant on social grants reinforces the urgency of these measures, with 27.78 million recipients in the 2023/24 period, potentially reaching 28.31 million in the current year. SRD grants are expected to reach 9.2 million people this year alone. Yet beyond immediate relief efforts, attention also gauges a steady climb in the number of social grant beneficiaries, which is projected to rise from 18.8 million in 2023/24 to 19.7 million by 2026/27.

Particular attention is paid to the child support grant and the old age grant, which combined, make up nearly two-thirds of total grant expenditure over the fiscal period. Adjustments in other grants include a planned increase of R90 for the old age, war veterans, disability, and care dependency grants in April 2024, with a further R10 hike slated for October 2024. Moreover, the foster care grant is expected to see a rise of R50, while the child support grant is anticipated to go up by R20 in April 2024.

These ascending fiscal commitments speak volumes to the South African government’s prioritization of social welfare amidst fluctuating economic conditions. Moreover, provisional allocations for social protection are buffered into the fiscal framework beyond March 2025, hinting at a possible continuation of certain grants and the identification of funding sources to sustain them.