President Cyril Ramaphosa pledged a R500-billion ‘Coronavirus Budget’ towards social relief and economic support as the country prepares for the 35-day lockdown to be lifted.
In his address to the nation on 21 April, Ramaphosa acknowledged that, while the measures taken to delay the spread of the virus were necessary to save lives, the pandemic has also “disrupted lives and damaged the economy… deepening poverty and increasing hunger.” He explained South Africa is entering the second of three phases in its economic response to the pandemic.
The first began in mid-March, according to Ramaphosa, and involved putting in place measures to mitigate the worst effects of the pandemic, including tax relief, disaster relief funds, emergency procurement, wage support through UIF and funding to small business.
President #Ramaphosa: Since the declaration of a state of national disaster over a month ago, government has put in place a range of measures to support workers’ wages and assist companies in distress.
— Presidency | South Africa ???????? (@PresidencyZA) April 21, 2020
The second phase will involve, “an extraordinary health budget, the relief of hunger and social distress, support for companies and workers, and the phased re-opening of the economy,” said Ramaphosa.
While R130-b of this budget will be made available by reprioritising funds within the current budget, R370-b will have to be raised from international financial institutions, global partners and local sources, such as the Unemployment Insurance Fund (UIF).
Besides the R20-b, which will fund the health response to the coronavirus, the country’s most vulnerable citizens will receive increased grant benefits.
- Child support beneficiaries will receive an extra R300 in May and an additional R500 per month from June to October,
- Unemployed individuals who are not receiving any other form of grant or UIF, will receive R350 per month for the next six months, and
- All other grant beneficiaries will receive an additional R250 per month for the next six months.
In addition, Sassa will soon provide vouchers and cash transfers to address the huge need for food assistance, which has arisen since the start of the epidemic.
The Department of Social Development has partnered with the Solidarity Fund, non-government organisations and community-based organisations to distribute 250 000 food parcels across South Africa over the next two weeks.
#COVID19 | Together we will beat the #coronavirus. Count me in. #CoronaVirusSA pic.twitter.com/YrTeWtPdTa
— Presidency | South Africa ???????? (@PresidencyZA) April 21, 2020
In making this announcement, Ramaphosa issued a stern warning that, “unscrupulous people abusing the distribution of food… will face the full might of the law.”
Altogether, R50-b will be directed towards relieving the plight of vulnerable and destitute citizens.
“The coronavirus crisis will lead to many people losing their jobs,” conceded Ramaphosa, before adding that R100-b will be set aside for protecting and creating jobs.
R1.6-b has been paid out from the UIF’s special Covid-19 benefit in support of 600 000 workers from more than 37 000 companies to date, and a further R40-b has been set aside to provide income support for workers whose employers are unable to pay them.
R2-b will be added to the R100-million already spent on providing loans, grants, and debt restructuring to small businesses, spaza shop owners and other informal businesses. Support will also be extended to artists, athletes, technical personnel, waste pickers and public works participants.
A R200-b loan guarantee scheme will be in place by month-end to assist businesses with a turnover of less than R300-m a year to pay operational costs including salaries, rent and payment of suppliers.
“It is expected that the scheme will support over 700 000 firms and more than three million employees through this difficult period,” stated Ramaphosa.
Tax relief measures are expected to free up R70-b in cash flow to businesses and individuals, and the Minister of Finance is expected to provide further details on this in the coming days.
Ramaphosa concluded his address by reiterating the need for a phased approach, guided by scientific evidence, to lifting the lockdown, saying, “We remain firm in our resolve to contain the transmission of the virus. We will, therefore, need to act with agility and flexibility in the weeks and months ahead, and respond to the situation as it develops.”
South Africa will hear on Thursday what measures will be taken to re-open the economy.
#COVID19SA | "I have faith in the strength and resilience of ordinary SAns, who have proven time and time again – throughout our history – that they can rise to the challenge.
We shall recover.
We shall overcome.
We shall prosper." – President Ramaphosa https://t.co/XtqpL5d15o pic.twitter.com/0rmS1Qkywf— South African Government (@GovernmentZA) April 21, 2020
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