Which countries have piloted a Basic Income Grant globally?

We investigate other countries that have piloted a Basic Income Grant. And find one key difference in how they’re funded …

The National Treasury has warned against a Basic Income Grant in South Africa. And evidence of other global initiatives suggests the same. Image: File

Implementation of a Basic Income Grant in South Africa was central to last week’s postponed 2025 Budget Speech. And the South African Social Security Agency was taken to court last year over its handling of the Social Relief of Distress (SRD) grant. The ruling in that matter decreed that SRD is no longer ‘temporary’ social welfare and should be expanded, improved and made permanent in 2025.

However, in October 2024, the National Treasury already saw fit to pour water over the idea of a Basic Income Grant after the MTBS. It called the scheme an ‘unreasonable consideration’ and said it was almost impossible to calculate the cost thereof. However, it did guestimate that a universal grant for South Africa’s 32% unemployed could balloon to R400 billion. A figure the fiscus simply cannot contain.

BASIC INCOME GRANT GLOBALLY

However, another quote caught our eye in the Treasury’s statement last October. That of only two countries have successfully applied a Basic Income Grant, and both are pulling back due to economic pressure. We wanted to verify where else a Basic Income Grant exists internationally. And what South Africa could potentially learn from these examples.

Firstly, a Basic Income Grant means government will provide unconditional SASSA social welfare each month to unemployed residents. At last count, this represents approximately 17-million unemployed between the ages of 18 and 60. However, in doing a deep dive, it appears very few countries have a true universal Basic Income Grant programme. Instead, a few have initiated targeted, pilot schemes instead. Here’s how they worked …

PILOT PROJECTS

According to our research, Finland conducted a two-year Basic Income Grant experiment between 2017 and 2018. It took 2 000 unemployed citizens and paid them $640 (R11 950) monthly. However, Finland’s experiment faced criticism for its limited scope and duration. In turn, this made observing its true long-term effects difficult.

Likewise, Iran implemented a quasi-universal cash transfer program in 2011. This paid much less, just $40 (R750) per month. However, this accounted for 95% of all households in Iran. So, while not technically a Basic Income Grant, it’s not dissimilar to our current R370 SRD scheme. Nevertheless, it still represents one of the largest cash transfer programs globally.

EXAMPLES IN EMERGING COUNTRIES

Interestingly, Kenya currently hosts a large Basic Income Grant experiment on the African continent. However, this is funded through an outside charity that provides $22 (R405) monthly to 20 000 people across 195 rural villages. It’s run for 12 years and findings show increased food security and psychological well-being. Unsurprisingly, the program faces questions about long-term sustainability and over-dependency effects.

In Brazil, the Bolsa/Auxilio Familia scheme provides approximately $70 (R1 290) monthly to low-income families with children. However, this fund, which sounds similar to our Child Support Grant, is conditional on school attendance and vaccinations. Like SASSA, administrative challenges and political instability continue to threaten its continuity.

SAME CHALLENGES WORLDWIDE

Nevertheless, Basic Income Grant schemes globally have encountered common challenges:

Administrative systems require robust identification and distribution structures. These are susceptible to bribery and corruption.
Fiscal sustainability requires significant resources, especially in developing economies.
Inflationary concerns for on-going, large-scale cash transfers to the poor.
Social welfare often faces criticism/cancellation during political transitions/elections.
Evaluating their true benefit remains challenging, with constant disagreement over appropriate metrics.

Of course, there is already evidence to suggest a Basic Income Grant in South Africa would reduce poverty. However, questions over its implementation and broader economic impact remain unanswered. Perhaps we’ll find some clarity on Wednesday 12 March in the Minister’s postponed Budget Speech. Or a privately funded pilot programme is the first step to take …

WILL SUCH A SCHEME WORK IN SOUTH AFRICA?

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