Ramaphosa announces R500 billion support package for the economy

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President Cyril Ramaphosa 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 Cyril Ramaphosa addresses the nation 25 days since lockdown: 

Earlier, child support grant receivers pleaded with Ramaphosa to increase their monthly stipend and their calls didn’t fall on deaf ears.

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.”

Even the unemployed will get a slice of the cake.

“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.

In the video below, SABC News reports on the much-needed relief for the most vulnerable:

Ramaphosa has also announced R200 billion in loan guarantees in partnership with the Central Bank, Finance Ministry and commercial banks, and tax deferral for firms with more than R100million turnover to assist companies in coping with the economic effects of the coronavirus.

This is part of the R500 billion rescue package announced by Ramaphosa.

At the end of March, the President announced one of the toughest lockdowns anywhere in the world. It appears to have halted a steep rise in new cases, but the economic impact of the lockdown is wreaking havoc on an economy that was already in recession.

Political parties react to President Ramaphosa’s R500 billion stimulus package

More soldiers deployed 

Ramaphosa earlier informed the Co-chairperson of the Joint Standing Committee on Defence, Cyril Xaba, that an additional 73 180 soldiers are to be deployed until the 26th June to assist the police as the country battles the coronavirus.

This would bring the total deployment of soldiers during the national state of disaster to 76 000.

Ramaphosa says the deployment will cost around R4.6 billion. He argues that the additional troops are necessary as the number of coronavirus cases continues to climb in South Africa.

He says in a letter to the co-chairperson of the committee that he will communicate his decision to the National Assembly and National Council of Provinces.

The President will address the nation again on Thursday, as government is doing whatever it takes to recover from this human, social and economic crisis.