SA’s social grant system is a global success story. Covering more than 28-million beneficiaries, it has reduced poverty among children and the elderly.
Contrary to persistent myths, evidence shows that grants improve school attendance, nutritional outcomes, and job-seeking behaviour. The child support grant (CSG), old-age pension and the Covid-19 social relief of distress (SRD) grant are pillars of this positive correlation.
Several studies confirm that the CSG increases school attendance and reduces hunger, while the old age pension boosts household consumption. Furthermore, the development policy research unit at the University of Cape Town found that, on aggregate, receipt of the SRD had short-term positive effects on the probabilities of job searching, trying to start a business, and securing employment.
As SA debates the future of its social grants, from institutionalising the SRD grant to considering a basic income grant, decisions must be anchored in evidence. A recent World Bank report acknowledges the country has made progress but warns that spending, while high, is neither sufficient nor efficient. Gaps remain in coverage equity, benefit adequacy and alignment of social grants with labour market policies and programmes.
According to the 2024/25 estimates of national expenditure, R269.4bn will be allocated to social grants, representing about 3.6% of GDP. This is above the Sub-Saharan African and upper-middle-income country averages. Yet the CSG, while well-targeted at children in need, disburses only R560 a month, which is far below the food poverty line. On the other hand, the SRD grant, reaching 8.3-million people, remains a temporary, low-value benefit at R370 monthly, which is vulnerable to fiscal and legal uncertainty.
The challenge is twofold. We must not only spend more but also spend better — and achieving the former is essential to realising the latter.
To assess whether we are spending enough and efficiently, we must follow a “transformation chain” that starts with raising resources, allocating them, optimising targeting and improving delivery and outcomes. An efficient social grants system requires the right mix of benefits paid to the right groups or individuals, adequate benefit levels and cost-effective delivery.
On some indicators, SA underperforms. Coverage among working-age adults is thin outside public employment or unemployment insurance. Benefit levels for grants are insufficient to drive transformative change. There is a need to spend more. However, acquiring more resources raises questions.
Part of the solution lies in generating savings through better spending. Recent SRD grant assessments found that up to 600,000 ineligible individuals received payments. Fraud or data mismatches were cited as the usual suspects. Deserving applicants were excluded because of digital barriers or verification gaps.
This is an area in which digital public infrastructure can be transformative. Investment in digital ID systems, integrated social registries, interoperable databases and modern payment platforms can sharpen beneficiary targeting, reduce leakage, and link social grant recipients to other social services and broader opportunities.
A unified digital ID system enables automatic eligibility checks across departments. This eliminates the need for repeated document submissions. Interoperable registries linking education, social grants, and labour systems can streamline the transition of young people from education to employment. By integrating data, graduates can be automatically assessed and matched with job opportunities, further training, or public employment programmes based on their skills, qualifications, and socioeconomic needs.
Integrated payment systems can disburse grants more quickly and securely. Consolidating data from health, education, and social grants into a unified data lake will enhance early detection of at-risk households. Integration paves the way for precise interventions before problems escalate.
SA has the building blocks in place to make this possible. The department of home affairs’ national ID system, the SAYouth.mobi platform, and the department of employment & labour’s Employment Services of SA database, all exist. But these systems are siloed. Connecting and scaling the databases can create a citizen-centric social protection system. Global examples underscore the potential.
Turkey has an integrated social assistance service information system which connects 28 government databases. The integration has cut application paperwork from 17 documents to one. In turn, benefit delivery times have gone from months to days. In India, biometric-based payments for employment and pension programmes reduced leakage by 41%. In 2011-21, adult bank account ownership soared from 35% to 80%, largely driven by government transfers to the poorest households.
In SA, the delivery mode of the SRD grant has reinforced positive developments surrounding integration seen in India and Turkey. Digital channels enabled rapid rollout, but gaps in interoperability and data exchange limit coverage and increase exclusion errors. The absence of a single interoperable social registry means multiple agencies are unable to verify eligibility seamlessly.
Strategic inflection point
Improvements to the social grants system, including reforming the SRD grant, make investing in digital public infrastructure no longer optional but essential. Digital systems must expand beyond grants to include integrated social services that link income support to nutrition, education, healthcare, skills development, and employment.
CSG recipients could automatically be enrolled in early childhood nutrition and education programmes. Youth exiting public employment schemes could be nudged towards vocational training, entrepreneurship, or subsidised transport.
Digital public infrastructure can also support contributory schemes for informal workers. This has the potential to improve savings and retirement security. The Kenyan Mbao pension plan shows the way. It is a voluntary, cellphone-based pension scheme enabling more than 100,000 informal workers to save for retirement with minimal cost and complexity. Similarly, the Nigerian biometric audits removed 37,000 “ghost” pensions while improving targeting and strengthening trust.
Deepening inclusion
“Digital first” does not mean the exclusion of other delivery methods. Many South Africans lack access to reliable internet and smartphones and do not have official IDs. This is especially the case for older women, the rural population and people with disabilities.
It is imperative that digital public infrastructure is designed for deepening inclusion. SA must adopt a rights-based, human-centred approach as advocated by the UN special rapporteur on extreme poverty. This entails multiple access channels, robust data protection, transparent decision-making processes and effective grievance redress mechanisms. Integrating UN safeguards into digital public infrastructure and monitoring compliance will be key to avoid a “zombie digital welfare dystopia”.
The National Development Plan 2030 positions social protection — with social grants as a cornerstone — as central to reducing poverty and inequality. Achieving this vision demands more than allocating additional funding to social grants. It requires smart, inclusive, data-driven delivery.
The digital public infrastructure moment is here. SA must seize it by combining political will, fiscal pragmatism, and digital innovation to ensure every rand spent on social grants delivers more, reaches further and transforms lives.
• Hove leads Genesis Analytics’ social protection work, helping governments spend more and better through expenditure reviews, fiscal-space analyses and digital transformation.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.