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African
Countries Should Consider Basic Income Grants (BIG) For Their
Citizens
By Jackson Kariuki
African
governments particularly in the Sub-Saharan Africa should
consider BIG for their citizens as a way and means of dealing
with poverty levels. I think and believe that considering
BIG would move the people from marginalization and narrow
the escalating gap between abject poverty and survival realm.
This is a better way forward for many governments and people
of Africa.
I will
take an example of a country like Kenya. Last year, Kenya
held her general elections. The people spoke with one voice
and underlined that it was time for change!!. In doing so,
they voted out the Kanu regime, which had become a heavy burden
on their shoulders, the country, and even to itself by being
ill disciplined, dictatorial, corrupt and almost brought the
country to halt.
I suggest
that the issue of poverty should be addressed sooner than
later by the new NARC government. The need to create a welfare
system, where every citizen should receive a Basic Income
Grant of approximately (K.shs 2000.00) (depending on the form
of currency of each Nation State) a month should be in the
minds of the ministries of planning.
Sceptics
and those opposed to the BIG system will advance strong arguments
sighting inherent problems with such systems in other countries
in Europe, USA, Canada, and Australia etc. One thing to remember
here is despite the inherent problems the welfare remains.
The point therefore is on removing the problems rather than
the system. We in Africa should not be talking of problems
when we even don’t have the system.
Other
opponents of the BIG give economic arguments and ask the question
of affordability of the system? Where will the money come
from? How will it be financed? Can the present economic conditions
in Africa allow such a system? These arguments hinge on the
warnings from donor and lending institutions like IMF and
the World Bank. These are valid reasons and should be looked
at with a view of not throwing away the idea, but of thinking
the system through to make it work and affordable. Can African
governments afford it? Look at it this way, many African governments
choose to spend huge sums of money in buying arms. How about
corrupt deals of payments of shoddy contracts? Do most need
the arms? How about spending millions of money on commissions
whose reports remain concealed? One can go on and on with
a list! of expenditures which are dubious.
In planning
and if desiring to introduce a BIG system, the Treasuries
will have to raise additional funds in a year, mostly through
higher taxes. This will be unpopular among the rich minority
but a slight reduction in their incomes seems a small price
to pay for the benefits BIG will bring to the poor majority.
To add to this positive view is that the BIG money will be
ploughed back into the treasury through the value added tax
and other taxes. Consequently recycling the money.
Think
of it this way, the total populations of each country never
exceeds the total revenue collections per year for example;
Kenya's population is 35 million, the government collects
revenue approximating of K Shs 230 billion; South Africa’s
total population is approximately 45 millions, collects revenue
to the tune of 440billions; etc (figures on the high side).
Put these figures into perspective what are we talking about.
Is there any rationale as to why Kenyans or South Africans
should remain pathetically poor? Can these figures ever be
compared? One could argue that the allegations of individuals
siphoning large amounts of money into foreign banks is as
a consequence of a lack of rightful planning, management,
and administration of the countries financial resources. If
the money is there and no one wa! nts to spend it, Canning
and greedy few will be tempted to find a way to enrich themselves.
This is a very plausible argument.
Other
arguments against BIG are generally weak as they hinge on
dubious premises: I address some
·
Incentive to work
This is
an ideological argument used by Western and donor governments
advance this Ideological argument arising from the desire
to reduce their payouts of unemployment benefits. Is there
any one in Africa particularly Kenya or South Africa who will
believe that K.Shs 2000.00/ R. 200.00 will deter a person
to work or taking a job? Another thing to remember here is
how fast will the economies of these countries grow to absolve
the vast majority of the un-employed, let alone the un-employable?
Is it not the case that even when the economies make a turn
around only a few of the millions of unemployed will ever
get a job, irrespectively? !
·
Increase dependency among the poor
The poor
are already enormously dependent. A BIG would give them a
chance of life and some independence together with the capacity
to pay for things like medical costs, school fees, water and
electricity, which they struggle to pay now. (One needs to
appreciate the efforts of some Governments who provide free
primary education and health services. But the list of needs
right now for the people is so long and heavy. BIG would be
a way to empower the majority of the citizens and who would
in turn take care of their other needs.
·
Is it impossible to organize paying the BIG to every one?
Like all
other tasks, yes it will be difficult, but not impossible.
How would it work, through the banks like the post office
bank, other commercial Banks. The money would go straight
into an individual’s bank account if the individual has
one. But in case an individual has no bank account, a system
of issuing them with electronic cash card would be preferable
as that would allow one to draw their money from ATMs or similar
devices. Alternatively each country would devise their preferable
and workable method. Just to bear in mind that ‘where
there is a will, there is a way’.
·
On what and how will people spend the money?
There
are no guarantee that some people will not spend the money
un-necessarily, but, there is strong evidence that poor households
in fact use the little money they have very carefully and
wisely. I do trust that many people will do the right things
with their money. Just because a few people will misuse the
money should not be the criteria to judge or prevent the many
from receiving a BIG.
Consider
the benefits, which Big will un-leash to the people, the country,
and the governments.
The strength
of BIG is its simplicity. It directly reduces the level of
grinding poverty which is the plight of the majority of our
citizens. It also directly reduces our extreme degree of income
inequality. It will inject funds into poor communities and
provide people with a chance of building local economies.
To you and me, the money means very little, but to a poor
person this will be manner from heaven.
The system will empower the purchasing capacity of the consumer
thereby widening the consumer base. Once the country broadens
the consumer base, there will be a higher and greater demand
of goods and services. Most African economic systems are modelled
on a capitalistic consumer market. As such, it needs a very
broad consumer base for its success. In short capitalism cannot
thrive without a consumer market. This reality is the basis
behind welfare systems in the most of the developed world
no matter what and how the system is riddled with implementation
problems. The owners of capital and the manufacturer of goods
know very well that they need an empowered consumer, for manufacturing
and trade to continue.
Another factor which strongly enthuse the building of a BIG
system is the knowledge that a capitalistic market system
has a way of generating social exclusion. This dearly affects
majority of the populations who are socially and economically
excluded from fruitful participation in the daily functioning
of their societies. Consider the havoc plaguing the majority
of the populations due to current farming and draught in most
of the African countries. These are currently dependent on
food Aid.
Empower the purchasing capacity of the consumer through the
BIG, then challenge them to provide for their daily basic
needs and requirements and we will realize how determined
the people are to shape their future destiny. BIG is not economic
or political populism. It is by far the most effective method
available to reduce destitution and poverty among the population
and citizens of Africa and they deserve it. After all they
are the people who vote in current governments and in doing
so, they expect their governments to lead them into prosperity.
Is there a reason not to consider the BIG system? It would
be wise to borrow ideas from other countries in the world
at large, and face the challenge for the good of the people
and Africa. On the shoulders of the African government leaders
rests a bequeathed and conferred authority and responsibility
to govern and lead African Peoples.
Kariuki. JM, Sociology Department, University of Natal Durban,
South Africa.
Africa
Economic Analysis 2003
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