President Cyril Ramaphosa on Tuesday evening announced ways to strengthen the country’s socio-economic recovery plan during the Covid-19 national lockdown. Since the beginning of the lockdown South Africa has been under increasing pressure to contain effects of the coronavirus on an already struggling economy.
“The coronavirus pandemic has disrupted your lives and damaged our economy.Its severity will continue to take a heavy toll in the weeks and months to come.
The pandemic has resulted in the sudden loss of income for businesses and individuals alike, deepening poverty and increasing hunger,”
“Those who can work from home during the lockdown are doing so, but there are millions of citizens who can’t and are battling growing uncertainty and anxiety over their futures,” Said Ramaphosa.
Since its implementation four weeks ago, the lockdown has negatively affected the economy. The government has been inundated with desperate pleas for food parcels to help the most disadvantaged communities.
“Poverty and food insecurity have deepened dramatically in the course of just a few weeks. In addition, to fill the immediate need, the Department of Social Development has partnered with the Solidarity Fund, NGOs and community-based organisations to distribute 250,000 food parcels across the country over the next two weeks,” said Ramaphosa.
He announced a massive social relief and economic support package of R500 billion, which amounts to around 10% of GDP will help the economy. He also said that the government has set aside R50 bilion for social grants recipients for the next six months. The South African Social Security Agency (Sassa) will roll out food assistance through vouchers and cash transfers.
“To reach the most vulnerable families in the country, we have decided on a temporary six-month Coronavirus grant. This means that child support grant beneficiaries will receive an extra R300 in May and from June to October they will receive an additional R500 each month,”
All other grant beneficiaries will receive an extra R250 per month for the next six months,” said Ramaphosa.
The South African Reserve Bank has also made vital contribution to support the economy during this crisis of Covid-19 lockdown.
“In line with its Constitutional mandate, it has cut the repo rate by 200 basis point, in effect unlocking at least R80 billion in the real economy, and taking other steps to provide additional liquidity to the financial system” said Ramaphosa.
He further said that banks in partnership with the government will extend an amount of R200billion loan scheme to support small and medium size businesses.
“We will therefore be introducing a R200 billion loan guarantee scheme in partnership with the major banks, the National Treasury and the South African Reserve Bank.
This will assist enterprises with operational costs, such as salaries, rent and the payment of suppliers,” said Ramaphosa.
The government will also pay R350 for the next six months to unemployed individuals who do not receive any form of social grants or UIF payment. The country’s economic recovery measures were three phases with the first phase that began in mid-March when the virus was declared a state of disaster.
“Firstly, an extraordinary health budget to respond to coronavirus, secondly, the relief of hunger and social distress, thirdly, support for companies and workers” said Ramaphosa.
The president said the country was in phase two, which was to stabilise economy and address demands of production and prevent job losses. Ramaphosa said that an additional amount of R100 billion has also been set aside for those who will lose their jobs and creating jobs during this lockdown period.