South Africa: 28 Million People On Grants With Only 7.4 Million Tax Payers Paying The Bill

South Africa has 28 million people on grants – but only 7.4 million taxpayers Daily Investor • 14 October 2024 Social grants The South African Social Security Agency’s (SASSA) annual report for the 2023/24 financial year revealed that it pays grants to 28 million South Africans. In turn, the National Treasury’s 2024 Budget Review shows that 7.4 million individuals in South Africa pay income tax. SASSA CEO Busisiwe Memela told Parliament on 11 October 2024 that South Africa serves two groups of clients. The first group is their ‘core clients, which are traditional grant recipients, and the second is recipients of the Social Relief Distress (SRD) grant of R350. Memela said 19 million South Africans receive grants, including older people, children, people with disabilities, war veterans, and people in distress. 55% of these grant recipients are from four regions – KwaZulu-Natal, Gauteng, Limpopo, and the Eastern Cape. There are also 9 million SRD grant recipients, which started during the Covid-19 pandemic in 2020. Memela told Portfolio Committee on Social Development members that South Africa has 28 million grant recipients. Put differently, approximately 45% of South Africa’s 64 million population benefits from social transfers. Social development is the third-largest line item in South Africa’s 2024/2025 national budget, with R387 billion planned to be spent this year. This amount includes R107 billion in old-age grants, R89 billion in social security funds, and R86 billion in child support grants. The budget further includes R73 billion for other grants, R22 billion for provincial social development, and R10 billion for Policy oversight and grant administration. National Treasury said R1.17 trillion is allocated for social grants and welfare services over the medium-term expenditure framework (MTEF) period. Social grants constitute 81.8% of spending in this function over the medium term, including helping women, youth and people with disabilities. Expenditure on social grants, excluding the SRD grant, will increase from R217.1 billion in 2023/24 to R259.3 billion in 2026/27. The SRD distress grant will receive R33.6 billion in 2024/25. Provisional allocations for social protection will be added to the fiscal framework in 2025/26 and 2026/27. Tax revenue to fund social grants Tax revenue to fund South Africa’s budget comes from three main sources: personal income tax, value-added tax (VAT), and corporate income tax. Personal income tax is the largest contributor to tax revenue at R739 billion, followed by VAT at R467 billion and corporate income tax at R303 billion. However, South Africa faces a challenge. It has only 7.4 million personal income taxpayers, while the state supports 28 million people through grants. The National Treasury’s 2024 Budget Review revealed that 7,409,406 people earn a high enough salary to pay income tax. There are 6.8 million registered individuals in South Africa with taxable income below the income‐tax threshold of R95,750 per year. The biggest contributors are people who earn above R1.5 million per year. They contribute R236 billion, or 32%, to personal income tax revenue. What is concerning is that there are only 197,866 people in South Africa who earn over R1.5 million. This means that 2.7% of people who pay personal income tax account for 32% of all collections from this important revenue source. Even more concerning is that South Africa’s expenses, particularly related to social grants, are increasing much faster than tax revenue. For the past decade, the government has consistently outspent its revenue, and it expects to run a deficit of R347 billion in the current financial year. To fund these deficits, the government takes on more debt. South Africa’s debt-to-GDP ratio is around 75%, growing from 2% to 3% annually. This is unlikely to stop. President Cyril Ramaphosa said in July that the government plans to use the SRD grant as the basis for some form of a Basic Income Grant. “We will use this grant to introduce a sustainable form of income support for unemployed people to address the challenge of income poverty,” he said. Creating a permanent basic income grant will add billions to the budget annually, which the country cannot afford. Renowned economist Dawie Roodt said South Africa’s growing debt burden is the biggest threat to the country’s future. “We are heading for a financial crisis in South Africa. The state owes too much money. We cannot afford to spend like we do,” Roodt said. Maybe someone far cleverer has the answer to where the money will come from to repay the debt. Or, is the plan of this government to knowingly default on its debt repayments? Warm regards Cliff photo CLIFF HALL indlovu@axxess.co.za 0827810544

Political Turbulence in Tunisia

The Thumb and the Scale Tunisia Tunisia’s election campaign season kicked off Saturday, a day after mass protests erupted in the capital Tunis against President Kais Saied, who demonstrators say is trying to rig next month’s presidential vote, Reuters reported. Friday’s demonstrations were among the largest in the three years since Saied dissolved parliament and began ruling by decree, a move opponents have described as a “constitutional coup.” Protesters accused the 66-year-old president of acting as a dictator and demanded the release of opposition politicians, journalists and activists detained for opposing Saied. The protests come weeks after the electoral commission – whose members were appointed by Saied – disqualified three major election candidates over alleged irregularities. Earlier this month, a court ordered the commission to reinstate the contenders, but the electoral body rejected the ruling. With the disqualifications, only three candidates remain in the Oct. 6 presidential election: Saied, Zouhair Maghzaoui, and Ayachi Zammel. However, Zammel was jailed last week over allegations of falsifying voter signatures, charges he said are politically motivated. Meanwhile, authorities have arrested more than 100 members of the main Islamist opposition party, Ennahda, ahead of the race, the Middle East Eye reported. First elected in 2019 on a campaign against corruption, Saied has come under fire for cracking down on the opposition and consolidating his own power, including rewriting Tunisia’s constitution to benefit himself, Africanews added. Despite his promise to set a new direction for the country, Tunisia’s unemployment rate has continued to rise, reaching 16 percent, one of the highest in the region, with young Tunisians bearing the brunt of the impact. Many of Saied’s opponents have accused him of undermining the democratic progress Tunisia made after the 2011 revolution.

A 92 Year Old Man Has Ruled This Country Too Long

No Day After Cameroon Cameroonian President Paul Biya is 92 and has ruled his Central African country for 42 years. Despite his age and length of time in office, however, he appears to have made no succession plans. Instead, he’s expected to run again for president in the Oct. 25 general election. His allies in parliament in the Cameroon People’s Democratic Movement political party recently extended their terms and postponed their elections by a year to 2026, too. Meanwhile, Biya has banned opposition groups that might pose a threat to his rule, Human Rights Watch noted. Even so, Cameroonians are thinking about “life after Biya,” wrote World Politics Review. Many hope the corruption, electoral fraud, the suppression of dissent, the press, free speech, and civil society – authorities recently threw a rapper in jail for insulting a local official – might change when their president leaves office. Those Cameroonians also hope the economic stagnation that has gripped the country for years will be reversed. Economic growth in Cameroon has lingered at around 3 percent for 30 years – not an impressive rate for a developing country – due to bad governance and a lack of public and private investment, the World Bank noted. Foremost among the causes for this anemic growth is corruption in the country’s vital oil industry, where revenues have been flagging. Swiss commodity trading and mining company Glencore, for example, now stands accused of bribing Cameroonian officials for oil contracts, according to the Africa Report. Glencore pled guilty to similar charges in 2022. Separatists in the English-speaking western region of the county, who want to break away from the French-speaking areas, have also hampered growth in six out of 10 of Cameroon’s provinces. As Reuters explained, this conflict dates back to 1960 when French and British colonies were merged to become one country. Conflicts between Nigerian forces and Islamist militants such as Boko Haram have also spilled over the border in Cameroon’s north, further destabilizing the country and triggering refugee crises as people flee violence, added the Norwegian Refugee Council. These large-scale challenges result in problems that affect the services that people really need. A third of the doctors who graduate from medical schools in Cameroon, for example, have left the country in search of work elsewhere, reported the Associated Press. That’s especially true for nurses, who emigrate around the world to fill staff shortages. Earlier this year, Biya, noting the rising brain-drain, appealed to young Cameroonians’ sense of patriotism and duty to remain in Cameroon, saying leaving was “not the solution” to Cameroon’s problems, Deutsche Welle reported. Rather than solving the problems that lead young people to leave, Biya seems committed to ignoring them while focusing on retaining his control over his people, said leaders of the opposition party, the Social Democratic Front, in an interview with Voice of America. If reelected – as he surely will be – Biya will rule up to 2032. By then, he will be 98 years old, VOA noted. The issues that need to be addressed will linger for his successor to deal with. And the emigration will go on. “You can’t use moral appeal or patriotism to make people stay,” Tumenta F. Kennedy, a Cameroon-based international migration consultant, told DW. “Addressing the mass movement requires efforts on addressing the root causes of migration, such as political instability, economic hardship, lack of job opportunities and last but not the least, security concerns.”

Thousands Of Christians Targeted And Killed In Nigeria

Published 11 days ago • Nigeria • Updated 7 days ago Thousands of Christians ‘deliberately targeted’ and killed in Nigeria, new report says Left Center Right Bias Comparison A report by Open Doors International reveals that thousands of Christians have been killed and displaced in Nigeria since 2020 due to increasing violence. The report includes interviews with 292 Christians and humanitarian workers about their experiences from January to April 2024. The violence mainly occurs in Borno and Plateau, with 16,769 Christians killed from October 2019 to September 2023, primarily by Boko Haram and Fulani militants.

People From Senegal Are Using Nicaragua As A Gateway To The U.S.

Weaponizing Migration Nicaragua In Senegal, Haiti, India, China, and Libya, the hot new ticket is Nicaragua. Famed for its beaches, volcanos and rainforests, citizens of dozens of countries are attracted by a different lure: It’s become a major gateway to the United States. “In Senegal, it’s all over the streets – everyone’s talking about Nicaragua, Nicaragua, Nicaragua,” Gueva Ba, 40, of the capital Dakar, told the Associated Press. Ba paid about $10,000 to get to Nicaragua in July 2023, where he then made his way to the US border with Mexico. After crossing it, he was caught, detained and deported a few months later, along with 131 other Senegalese who had also tried their luck. Ba, like many of the tens of thousands of migrants now trying to use this route, had already tried to make it to Europe 11 times by boat from Morocco across the Mediterranean. But with Nicaragua, he knew he had a special advantage; not only did he not need a visa to land there, but more importantly, Nicaragua is actively encouraging such migration as a way to punish the US for sanctions against the repressive regime of President Daniel Ortega, in power for 28 of the past 45 years, say US officials. “The Ortega government knows they have few important policy tools at hand to confront the United States … so they have armed migration as a way to attack,” said Manuel Orozco, director of the migration at the Inter-American Dialogue, in an interview with NPR. “This is definitely a concrete example of weaponizing migration as a foreign policy.” Beyond a tit-for-tat for sanctions, Nicaragua’s government, led by the Sandinista National Liberation Front (FSLN), is making millions of dollars with its business of human trafficking, imposing arbitrary entry fees on the migrant arrivals that can be as much as $200 per person, as well as thousands of dollars in landing and departure fees imposed on the charters, wrote El País. And those prices are going up – arrivals from Africa now will be charged more than $1,100 to land in Nicaragua. US Assistant Secretary of State for Western Hemisphere Affairs Brian Nichols said he was “concerned” about the “dramatic” increase in flights to Nicaragua to promote migration. “No one should profit from the desperation of vulnerable migrants – not smugglers, private companies, public officials or governments,” he wrote on X. The US slapped new sanctions on Nicaragua in May over the migration issue. The numbers tell the story. Between May 2023 and May 2024, more than 1,000 flights with migrants from countries such as Libya, Morocco, Uzbekistan, India, and Tajikistan landed in the Nicaraguan capital Managua, while in a six-month period between June to November 2023, about 500 flights, mostly from Haiti and Cuba, landed there, according to the Inter-American Dialogue. At the same time, while arrests for illegal crossings on the US-Mexico border topped 6.4 million between January 2021 and January 2024 (before falling steeply later in 2024), Mexicans accounted for only about one-quarter of those arrested, the rest coming from more than 100 countries, wrote the think tank. From July to December 2023 there were more than 20,200 arrests of just Senegalese migrants for crossing the border illegally, 10 times the figure for arrests in the same period in 2022. “Migration flows to the United States have more than doubled to over eight million people annually from 2020 and 2023,” the organization wrote, adding that Nicaragua is responsible for at least 10 percent of all migration that has arrived at the Mexico-US border. The charters first began in 2021, when the Nicaraguan government opened the doors of the Augusto C. Sandino International Airport, relaxed visa requirements for African nationals and welcomed the first migrant arrivals from Cuba, the Dominican Republic, El Salvador, Curacao, and Haiti. Today, passengers now fly from countries in South America, North Africa and Central Asia, to the country on their way to the US to avoid the dangerous crossing at the Darien Gap at the Colombian-Panamanian border, the World wrote. The Senegalese and others became part of a surge in migration at the southern border, made up for the first time of people from countries such as Mauritania, Ghana, Tajikistan and Bangladesh, who usually head towards Europe. They were able to coordinate the trip because of travel agents, smugglers and the information that comes from social media and apps like WhatsApp, and pay for the trip with electronic payments. Meanwhile, Nicaragua itself has been increasingly contributing to the flows headed toward the US border over the past few years, according to the Migration Policy Institute. It has deported hundreds of its own nationals, while the deepening repression in the country has led to thousands more deciding to head north. “Nicaragua is caught in a spiral of violence marked by the persecution of all forms of political opposition, whether real or perceived, both domestically and abroad,” said Jan Simon, the chair of a United Nations human rights group that accused the Nicaraguan regime led by Ortega and his wife, Vice President Rosario Murillo, of “crimes against humanity.” A former police special forces officer, going only by the name Edwin, was ordered to shoot protesters during mass anti-government demonstrations in 2018. Instead, he fled, before being captured, imprisoned, raped, and severely tortured. These days, he lives in exile in Costa Rica, making ends meet with odd jobs while waiting for asylum in the US. He worries about Nicaraguan officials finding him. “There were moments of desperation when I thought: ‘It would have been better if I stayed … killed all those people,” he told the Washington Post. “But I didn’t go into the police to kill people.” Share this story

A Major Prison Riot In The Democratic Republic Of The Congo

No More Room Democratic Republic of the Congo Almost 130 people died this week in an attempted mass breakout from the Democratic Republic of the Congo’s largest prison, marking one of the deadliest incidents in the country’s recent history of prison violence, CNN reported. The breakout attempt at the Makala Central Prison, near the capital Kinshasa, occurred in the early hours of Monday, resulting in major damage to the facility’s infrastructure, with fires destroying offices, the infirmary and food depots. Interior Minister Jacquemain Shabani Lukoo Bihango confirmed that 129 people were killed, including 24 by gunshots, while others died from suffocation and jostling. The chaos also resulted in sexual assaults on women. About 59 individuals sustained serious injuries and were taken to hospitals for treatment. The government has since stated that the situation is under control. Makala Prison, built in the 1950s, has a capacity of 1,500 inmates but was holding more than 12,000 inmates before the incident. Some sources claimed the number of inmates was as high as 14,000. In 2020, a prison official told the BBC about how people were dying there because of poor conditions, including food shortages and a lack of hygiene. At the time, only about 6 percent of inmates were serving sentences. The rest were trapped in prolonged legal proceedings. This overcrowding issue has been a longstanding problem in the DRC’s penal system, contributing to deteriorating conditions and frequent prison breaks. In 2017, a similar incident at Makala resulted in the escape of over 4,000 inmates. In response to the latest breakout, Justice Minister Constant Mutamba condemned the event as a “pre-meditated act of sabotage” and announced measures to prevent overcrowding, including suspending new transfers to Makala. Rights groups are now calling for an international investigation into the incident to address systemic issues within the DRC’s penitentiary system.

Political Instability In Algeria

Victories, Great and Fixed Algeria The Olympic gold medalist who garnered headlines over “uninformed speculation about her sex,” wrote the Associated Press, was the star in a parade celebrating her victories in her hometown of Tiaret, around 300 miles to the south of the capital, Algiers. “She’s the daughter of the people,” said Dhikra Boukhavouba, an Algerian who studies in Paris, in an interview with the Washington Post. Some Algerians won’t get a chance to take to the streets to enjoy similar jubilation after the North African country’s general election on Sept. 7. Algerian police recently arrested opposition figure Fethi Ghares, picking him up at his home. The officers said they needed him for an “interrogation,” his wife told Agence France-Presse, but they didn’t explain why or produce a warrant. Officials still have not given any reason for his detainment, but the timing was unmistakable. A secular leftist who opposes conservative Algerian President Abdelmadjid Tebboune of the ruling National Liberation Front political party, Ghares had recently served two years in jail for insulting the president, harming national unity, and other charges. He formerly served as head of the Democratic and Social Movement party before Tebboune banned the party, added Africa News. Tebboune, 78, is expected to win the election, earning a second and final five-year term, reported Reuters. The president has shored up support throughout the North African country’s political elite and its major civic and corporate institutions. Energy exports have helped make him popular. An OPEC member, Algeria is a key supplier of gas to Europe. Algeria is on track to double its gas exports in the next few months as winter approaches and Russia’s invasion of Ukraine continues to constrain supply. To further consolidate his power, the president has also sought to control information, enacting new media laws that have resulted in more arrests of journalists, less free speech and expression, and pliant, state-owned press operations, World Politics Review explained. Lastly, in addition to the arrest of Ghares, election officials rejected 13 candidates for the presidency, allowing only two to run against Tebboune: moderate Islamist Abdelaali Hassani and center-left socialist Youcef Aouchiche, wrote Radio France Internationale. These efforts might be vital to Tebboune’s chances. Only 40 percent of voters turned out to cast their ballots in 2019 when he won 58 percent of the vote after pro-democracy protests weakened the longtime President Abdelaziz Bouteflika. Tebboune has barred such protests, noted Le Monde.