President Cyril Ramaphosa has extended the COVID-19 special relief grant by a further three months. The grant period was set to end in October.
The President was addressing a joint sitting of Parliament on government’s plan, known as the South African Economic Reconstruction and Recovery Plan, to get the economy back into a job-creating growth path following the nation lockdown to curb the spread of the coronavirus (COVID-19).
The President says through the special COVID-19 grants and the top-up of existing grants, close to R40 billion in additional support has been provided to more than 17 million people from poor households.
“The evidence suggests that the expansion of social protection has kept more than five million people above the food poverty line during the past six months. The Special COVID-19 Grant, in particular, represents a significant achievement, reaching more than 6 million unemployed people in a short space of time,” Ramaphosa said.
Ramaphosa says studies conducted showed that the grants were vital in reducing the impact of COVID-19 on levels of poverty and hunger.
However, the President says the grant cannot be expanded beyond three months.
“Also, having realised that pending the full implementation of these measures that we are announcing there will be a gap of some three months where we need to give support to our people to continue the support that was given six months ago to make it nine months. The stretched nature of our financial resources does make it difficult and impossible to extend it beyond the three months.”
Ramaphosa says more than 960 000 companies have benefited through the UIF wage support scheme and through the grants and loans provided by various government departments and public entities.
He says more than four million workers have received R49 billion in wage support.
“More than four million workers have received R49 billion in wage support, helping to protect these jobs even while companies were not able to operate. In addition to those businesses that have received direct support, many more companies have benefited from tax relief measures worth in the region of R40 billion.”
Loan Guarantee Scheme
The President says government’s R200 billion Loan Guarantee Scheme to protect jobs and save companies from bankruptcy.
“This scheme has thus far provided R16 billion in low-interest loans to almost 12 000 businesses. Banks have together provided an additional R34 billion in debt relief to individuals and businesses. Nonetheless, this is far short of what is needed and what is possible,” Ramaphosa said.
He says government is working with the banks to ensure that more companies are able to access assistance as they resume their operations and that the full potential of this scheme can be realised.
The President has commended the South African Reserve Bank for acting swiftly to support the economy and protect the financial system by reducing interest rates to their lowest level in more than 50 years.
President Cyril Ramaphosa presents the economic recovery plan in Parliament: