Page 6 - Service Delivery Review

News in Brief

Social protection system stimulates economic growth

President Cyril Ramaphosa says expanding the so- President Ramaphosa explained that in a similar vein,
cial protection system is one of the critical tools gov- the Presidential Employment Stimulus Initiative (PESI)
ernment has implemented to ensure that some of the has also provided a platform for participants to gain a
needs of the most underprivileged South Africans are foothold in the labour market.
addressed while also stimulating economic growth.
The President said this when he addressed the nation
through his recent weekly newsletter. In the news- The PESI Impact
letter, President Cyril Ramaphosa emphasised that “[Many] participants in the…PESI have gone on to
contrary to what some may believe, expanding the find work after they have completed the programme.
social wage is “not simply an indication that more The school assistants programme has provided op-
people need grants today than before”.
portunities for 750 000 young people to date in over
Social grants stimulate the economy 22000 schools, reaching every corner of the country.
“The Social Relief of Distress Grant [SRD Grant] that
was introduced in 2020 in response to the Coronavi- “Over 72 percent of participants in the PESI said that
rus pandemic has reached more than 11 million peo- having gained their first work experience, the pro-
ple at its peak, and has lifted millions of people out of gramme helped them to gain a foothold in the labour
food poverty. According to research, approximately market thereafter. In all of these ways, South Africa’s
50 percent of the purchases made by SRD grant re-
cipients are groceries. world-renowned social protection system provides
important benefits for many in our society, not only
“Social grants also act as a stimulus for the econo- those who receive social grants,” he said.
my as a whole, increase spending in townships and
rural areas, and improve employment outcomes. An “It supports economic growth from the bottom up,
interview-based study by the University of Johannes- enables business activity, and strengthens social sol-
burg of informal traders…found that the SRD Grant
stimulated customer spending, provided capital to idarity and stability. It is one of the greatest achieve-
purchase stock, and enabled the new businesses to ments of our democratic society, and one that we
be initiated,” he said. should all be proud of,” he said.

6 SERVICE DELIVERY REVIEW | Volume 15. No. 3 of 2023