President Cyril Ramaphosa of South Africa has announced a R500 billion support package for the economy as the country battles the coronavirus pandemic. This amounts to 10% of the Gross Domestic Product.
Addressing the nation on Tuesday night, President Ramaphosa says South Africa is set to forge a new economy in a new global reality after the coronavirus pandemic settles.
The economic impact of the virus has hit businesses and individuals hard, with many people being left without jobs since the start of the national lockdown.
He says the cash will include the reprioritisation of R130 billion from the current budget. A sum of R500 billion will come from international financial sources. The World Bank, the International Monetary Fund and the Brics Bank have been approached.
Some of the money will, in the first instance, be used to assist in the health response, including ventilators and hospital beds.
The President explains that the country’s economic strategy going forward will require a new social compact among all role players, to achieve inclusive growth.
“We will forge a compact for radical economic transformation that ensures that advances the economic position of women, youth and persons with disabilities. Our new economy must be founded on fairness, empowerment, justice and equality. Our new economy must open new horizons and offer new opportunities to all South Africans.”
President Ramaphosa says the child support grant will increase by R300 from the first of May and by an additional R500 from June to help people cope with the economic problems caused by the coronavirus.
Ramaphosa says while the lockdown has had devastating effects on the country’s economy, it’s nothing compared to the catastrophic impact the coronavirus would have had if it was allowed to go unchecked.
“While we have put in place measures to protect the wages of workers in the formal economy and have extended support to small and medium and micro-sized businesses, millions of South Africans in the informal economies and those without employment are struggling to survive. Poverty y and food insecurity have deepened dramatically in course of just a few weeks. To reach the most vulnerable in our country we have decided on a six-month coronavirus grant.”
“In addition, a special COVID-19 Social Relief of Distress grant of R350 a month for the next 6 months will be paid to individuals who are currently unemployed and do not receive any other form of social grant or UIF payment. The Department of Social Development will issue the requirements needed to access and apply for this funding,” says Ramaphosa.
South Africa currently has 3,465 cases with 58 deaths. As a measure to curb the spread of the virus the country has been on lockdown since 27 March.
To help municipalities continue providing services to South Africans, Ramaphosa says R20 billion has been set aside.
“Additional funding of R20 billion will, therefore, be made available to municipalities for the provision of emergency water supply, increased sanitisation of public transport and facilities, and providing food and shelter for the homeless,” says Ramaphosa.
