Grant Dependency Is Nothing To Brag About
We must stop pretending that ever-expanding welfare is “compassion” while the state simultaneously sabotages the very conditions that allow people to earn their own living.
On the 12th of February, at the State of the National Address (SONA), President Cyril Ramaphosa bragged that the Social Relief Distress (SRD) grant “has been a great success helping millions of people who have become dependent on it”.
The SRD grant was not meant to be a permanent fixture of South Africa’s already bloated welfare state. It was meant to be a temporary stopgap to help alleviate the manmade plight of the government’s lockdown during the COVID-19 pandemic.
But as the adage goes, there’s nothing more permanent than a temporary government program.
If we take Ramaphosa’s words at face value, then it is good that potentially millions of people were able to purchase food and stave or starvation due to the SRD grant. But dependency is nothing to brag about. Welfare is not a success of a society, but a signal of its policy failures.
It is inevitable that some people in a society, especially its most vulnerable, will need a safety net. But this is not meant to be an endless and all-encompassing system whereby as many people as possible are subsidised by taxpayers. That is unsustainable and leads to social ills.
28 million people in South Africa receive welfare, 8.7 million of whom benefit from the endlessly temporary SRD grant. Altogether, these social protection grants cost R300.2 billion in the 2025 financial year.
The goal of welfare should be to act as a stopgap against destitution, and an enabler of future financial independence and flourishing. Succinctly: the success of a welfare system should be measured by how many people no longer need it.
Yet South Africa’s welfare recipients’ population continues to grow. In 1995, 2.5 million people relied on welfare. In 2010, this number had risen to 14.9 million. And now, it sits at 28 million people.
This isn’t just down to population growth. It’s a testament to the fact that South Africa’s government, institutions and policy do not enable economic growth and employment. It crushes the ability for entrepreneurs to start businesses and employ people and rather opts to give people a measly stipend instead.
The problem isn’t the welfare. While welfare is costly and can lead to many social problems, it isn’t the fundamental issue in this country. Removing it without solving the other issues would be disastrous for millions who have been forced into this position by an incompetent government.
The solution is to embrace a free market. Gainful employment beats the grants, and gives those employed not just more income, but a sense of real worth.
We need to strike down policies that hold back economic growth and job creation. That means eliminating Black Economic Empowerment (BEE), which doesn’t exist to empower previously disadvantaged groups but rather serves only to enable corrupt politicians to benefit from corrupt deals. We must reform laws like the Basic Conditions of Employment Act, the Labour Relations Act, and cut existing and future red tape like the Business Licensing Bill to enable businesses to hire and fire without the risk of being burdened by an incompetent employee that they are no longer allowed to fire.
South African companies are sitting on vast amounts of unspent capital that they are too afraid to spend due to the ANC’s capricious economic policies. If these companies were given guarantees that their property will be protected, that they can undertake their business as they see fit within the common sense confines of the law, and that they will not be subjugated by the whims of government or labour unions, this money would be spent to employ hundreds of thousands of South Africans, and grow the economy tenfold.
We must stop pretending that ever-expanding welfare is “compassion” while the state simultaneously sabotages the very conditions that allow people to earn their own living.
A society does not become dignified by perfecting the machinery of dependence. It becomes dignified when ordinary people can build something. A spaza shop that isn’t harassed by petty officials, a small contractor who can bid without paying a political toll, a manufacturer that can expand without fearing rolling blackouts and regulatory ambush. The SRD grant is not proof that the ANC cares. It is proof that the ANC has failed so thoroughly that millions require a monthly rescue from the same state that trapped them.
Ramaphosa’s admission should be taken seriously: millions “have become dependent on it”. That is not a victory, it is an indictment. It means the economy is not producing enough jobs, the state is not providing reliable basics like electricity and safety, and the policy environment is so hostile that even willing employers hesitate to hire.
If the ANC is serious about reducing dependency, then it must stop using SRD as a campaign prop and start dismantling the architecture of stagnation it has built over three decades. End cadre deployment. Stop treating procurement as a patronage pipeline. Restore the rule of law so contracts are enforced, property rights are meaningful, and criminals are prosecuted. Fix energy by fully opening generation and letting private capacity flood in without political gatekeeping. Slash red tape across municipalities where businesses are strangled in paperwork, delays, and arbitrary compliance demands.
Most importantly, the state must make a clear promise: South Africa is open for enterprise, not open season for extortion. Investors do not need speeches. They need certainty. Certainty that policy will not shift with factional battles, that the goalposts will not be moved mid-game, and that their success will not be punished as moral failure.
The SRD grant should not be expanded. It should be made obsolete. Not by ripping it away from people who depend on it, but by building an economy in which dependence steadily declines because opportunity steadily rises.
Bragging about dependency is easy. Creating the conditions for independence is hard. The ANC has chosen the easy path for years, and South Africans are paying the price.
Nicholas Woode-Smith is the managing editor of the Rational Standard and a senior associate of the Free Market Foundation. He writes in his personal capacity.