South African President announces a R500 Billion stimulus package
Cyril Ramaphosa, the South African president made this announcement while addressing the nation on the social response and economic measures that form part of the government’s fight against the COVID-19 pandemic.
This rescue package comes while the country is under a 35 days lockdown due to Corona virus
He says, “the pandemic has resulted in the sudden loss of income for businesses and individuals alike, deepening poverty and increasing hunger, the urgent and dramatic measures we have taken to delay the spread of the virus have been absolutely necessary”.
With 3 465 confirmed positive Covid-19 cases and 58 deaths, the President reiterated the government’s position, that South Africa is still in the early stages of the pandemic and that this will last for the foreseeable future.
With the three phases that the President has announced, the first phase began in mid-March when the government declared the corona virus pandemic as a national disaster. And, it includes tax relief, wage support, emergency procurement, funding for small businesses and a disaster relief fund. However, the initial phase has been criticised because its not putting enough support into the country’s economy, because as businesses close their doors because of this pandemic, people will lose jobs.
The president said they are embarking on the second phase, which include an economic response to stabilise the economy, address the extreme decline in supply and demand and protect jobs.
As part of this phase, the president announced a massive social relief and economic support package of R500 Billion, which amounts to around 10% of the South African gross domestic product (GDP).
He added that the third phase is the economic strategy which will help to drive the recovery of the economy as the country emerges from this pandemic. Central to the economic recovery strategy will be measures that will help stimulate demand and supply through interventions such as a substantial infrastructure programme, the speedy implementation of economic reforms, the transformation of the economy and embarking on all other steps that will ignite inclusive economic growth.
After consultations with various stakeholders such as business, labour and the community constituency in NADLEC. The cabinet considered various proposals and finalised the social relief and economic support package that stand in the centre of the second phase of the economic response.
These proposals involve, extra ordinary health budget to respond to corona virus, the relief of hunger and social distress, support for companies and the phased re-opening of the economy.
“To date, the World Bank, International Monetary Fund (IMF), BRICS New Development Bank and the African Development Bank have been approached and are working with the National Treasury on various funding transactions”, Said President.
The President then assured South Africans that, as government they will forge a compact for radical economic transformation that insures advances economic position of women, youth and persons with disabilities. And that makes cities, towns, villages and rural areas vibrant centres of economic activities.
By Sakhe Dolonga