Ramaphosa puts in place economic measures to mitigate impact of COVID-19

President Cyril Ramaphosa has announced measures to support the economy while the country is on lockdown. South Africa will be on a national lockdown from midnight, Thursday, 26 March until midnight, Thursday, 16 April to curb the spread of coronavirus.

The national lockdown comes at a time when National Treasury has revised down the growth forecast to a meager 0.9%. And the unemployment rate sitting at an all-time high of 29.1%.

For this reason, the government has the department of Small business development has made over R500 million immediately available to assist SME’s that are in distress. While the department of tourism has pledged an additional amount of R200 million to aid the sector which is facing serious headwinds.

Solidarity Fund

President Ramaphosa says the interventions are quick and targeted. “Firstly we are supporting the vulnerable, following consultation with social partners, we have set up a Solidarity Fund, which South African businesses, organisations and individuals and members of the international community can contribute to. The fund will focus efforts to combat the spread of the virus, help us to track the spread, care for those who are ill and support those whose lives have been disrupted.”

Contributions can be made on the fund’s website www.solidarityfund.co.za

In the video below President Ramaphosa urges South Africans to support the Solidarity Fund:

The Solidarity Fund will help track the spread of the Coronavirus, care for the ill and support those whose lives have been disrupted.

The fund is to be chaired by prominent businesswoman Gloria Serobe and lead by a board of eminent persons.

The Rupert and Oppenheimer families have pledged R1 billion each to assist small businesses affected by the pandemic.

In the video below, Economist Dr. Thabi Leoka,  says it will help the economy if more wealthy people to assist in mitigating the impact of the outbreak on the economy:  

Economist Dawie Roodt says the Rand has taken a huge knock because of the pandemic. Credit rating agency Moody’s is expected to announce its sovereign rating decision on Friday. In the video below, Roodt says Moody’s decision is irrelevant at this stage:

Special dispensation for companies

Ramaphosa announced that consultations are underway to push for a special dispensation for companies in distress because of the disease.

“Through this proposal employees will receive wage payment through the temporary Employee Relief Scheme, which will enable companies to pay employees directly during this period and avoid retrenchment. Any employees who fall ill through exposure at their workplace will be paid through the Compensation Fund. Commercial banks have been exempted from provisions of the Competition Act to enable them to develop common approaches to debt relief and other necessary measures.”

Unemployment Insurance Fund

The Unemployment Insurance Fund says it’s ready to step in and pay workers who find themselves out of work because of the coronavirus.

Companies all over the world are increasingly finding it difficult to stay open for business amid falling demand due to the coronavirus.

The UIF in South Africa says companies which fall on hard times and are forced to shut down temporarily should get in touch. Also, workers who test positive for Covid- 19 and have to be away from work while they are in quarantine can claim from the UIF.

Makhosonke Buthelezi is the Spokesperson of the Unemployment Insurance Fund says, “The employer may decide as a result of the pandemic to close their businesses for a period… to us that constitutes a temporary layoff. If the employer cannot pay his employees for this period he can apply for the National Disaster Benefit at a flat rate of not less than a minimum wage of R3500 whichever period is the shortest, the other one is the illness benefit that if you self-guarantee for 14 days you can apply for the illness benefit that already exists.”

The measures also include some tax relief. The President says the government is working together with businesses to implement a raft of measures which include seed capital that will save lives and support the economy.