South Africa mulls welfare cuts to fund free higher education: report

President Jacob Zuma gestures as he addresses parliament in Cape Town
President Jacob Zuma gestures as he addresses parliament in Cape Town, South Africa, November 2, 2017. REUTERS/Sumaya Hisham

November 10, 2017

JOHANNESBURG (Reuters) – South Africa’s government is considering a range of budget cuts that could include slashing social grants for the most vulnerable in order to pay for free tertiary education, a newspaper reported on Friday.

South Africa’s rand weakened on Thursday after comments by President Jacob Zuma raised concerns about higher spending on education, which would put added strain on the country’s already stretched public finances.

The Mail & Guardian newspaper said a presidential fiscal committee had presented a document to Zuma outlining possible cuts to fund free higher education for lower-income students as well as plugging a swelling budget deficit.

Options included cuts to the social grants that are the main source of income for around 17 million people – a third of the population – and slashing the budgets for housing, infrastructure and the armed forces.

A freeze on civil servant wage hikes was also on the cards, the newspaper reported.

The Presidency and Treasury did not immediately respond to requests for comment.

Violent protests by students and activists demanding free tuition rocked several South African universities last year, underlying tensions in a country marred by glaring income disparities defined largely by race.

South Africa is staring down the barrel of ratings downgrades after the Treasury last month widened the 2017/18 budget deficit estimate to 4.3 percent of gross domestic product while lowering this year’s economic growth forecast to 0.7 percent from 1.3 percent.

(Reporting by Ed Stoddard; Editing by Ed Cropley)