President of South Africa, Cyril Ramaphosa has announced a 500bn Rand economic and social relief package for his country following the COVID-19 pandemic. The South African leader made the announcement in a national broadcast on Tuesday night, April 21, 2020.
Of the required 500bn Rand, the President said 130bn Rand will be sourced from reprioritising the budget and will be expanded in the coming days. Cyril Ramaphosa said he will address the nation on again on Thursday, April 22, 2020.
In his speech, he said, “some of these institutions have created financing packages that are aimed at assisting countries that are having to address the coronavirus crisis like us. This funding will be used, in the first instance, to fund the health response to coronavirus.”
The President has his Finance Minister, Tito Mboweni said talks are already underway with the Unemployment Insurance Fund, the New Development Bank, the World Bank, the African Development Bank, and the International Monetary Fund to source the remaining 370bn Rands to setup the stimulus package.
President Ramaphosa is setting aside 20bn Rand for health services, an additional 20bn Rand will also be set aside for the provision of emergency water supplies, increased sanitation of public transportation, infrastructures and utilities, and providing food and shelter for the vulnerable in South Africa.
In partnership with major commercial banks, Treasury, and South African Reserve Bank, the South African government is introducing a 200bn Rand loan guarantee scheme to assist enterprises with operational costs such as payment of suppliers, rent, and salaries. Only companies with an annual turnover of less than 300 million Rand are eligible to apply.
For the most hit sectors such as the taxi industry, SME and neighbourhood shop owners (spaza), the government is setting aside 2bn Rand to cushion the effect. Ramaphosa has also set aside 100bn Rand to protect and to create more jobs to stimulate the South African economy.
South Africa is currently in Day 27 of its lockdown which is expected to end at the end of April 2020. President Cyril Ramphosa in his broadcast appeared optimistic and believes that the scale of the emergency relief programme is historic. He said, “it demonstrates that we will not spare any effort, or any expense, in our determination to support our people and protect them from harm.”