Can a universal basic income contribute to breaking structural poverty in South Africa?

The research argues that a universal basic income grant (UBIG) in South Africa could move beyond immediate poverty relief to dismantle structural poverty by improving labour market participation, health, women's empowerment, and social cohesion. Drawing on local and international evidence, the authors contend that a UBIG funded through progressive taxation would stimulate local economies via multiplier effects and increase human capital. The paper emphasizes that for a UBIG to be effective, it must be unconditional, universal, and integrated with quality public services, rather than serving as a replacement for them.

• A UBIG set at the upper-bound poverty line (UBPL) would effectively eliminate income poverty in South Africa, though the authors note that eliminating income poverty does not automatically dismantle the underlying structures of structural poverty.
• Evidence from various contexts debunks the myth that cash transfers create a work disincentive; instead, they can facilitate job searches by covering costs for transport, data, and internet.
• Income support can improve child health and nutrition, which has long-term economic benefits by reducing the intergenerational transmission of poverty and increasing adult earnings.
• A UBIG paid to all adults, rather than just household heads, enhances women's financial independence, provides a form of remuneration for unpaid care work, and is associated with a reduction in intimate partner violence.
• Universal grants have the potential to strengthen social cohesion and democratic participation by affirming every citizen's stake in society, whereas targeted grants can create social divisions and stigma.
• Cash transfers stimulate sustainable livelihoods by providing start-up capital for microenterprises and agricultural investments, often creating an income multiplier effect where total income increases exceed the grant value.
• The use of digital financial systems for grant distribution in South Africa has enabled private corporations to exploit recipients through predatory lending and automatic loan repayments.
• From a macroeconomic perspective, a UBIG funded through progressive taxation can drive GDP growth and increase government revenue through increased aggregate demand and local economic stimulus.

APA

Howson, K., & Mncube, Z. (2022). Can a universal basic income contribute to breaking structural poverty in South Africa? Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2022/11/Working-Paper-UBIG-and-structural-poverty-September-2022.docx.pdf

Chicago

Howson, Kelle, and Zimbali Mncube. Can a universal basic income contribute to breaking structural poverty in South Africa? Institute for Economic Justice, 2022. https://iej.org.za/wp-content/uploads/2022/11/Working-Paper-UBIG-and-structural-poverty-September-2022.docx.pdf.

Wikipedia

{{cite report |last1=Howson |first1=Kelle |last2=Mncube |first2=Zimbali |title=Can a universal basic income contribute to breaking structural poverty in South Africa? |publisher=Institute for Economic Justice |date=September 2022 |url=https://iej.org.za/wp-content/uploads/2022/11/Working-Paper-UBIG-and-structural-poverty-September-2022.docx.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{howson2022can, author = {Howson, Kelle and Mncube, Zimbali}, title = {{Can a universal basic income contribute to breaking structural poverty in South Africa?}}, institution = {Institute for Economic Justice}, year = {2022}, month = sep, url = {https://iej.org.za/wp-content/uploads/2022/11/Working-Paper-UBIG-and-structural-poverty-September-2022.docx.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }