SOUTH AFRICA - PRESIDENT RAMAPHOSA OUTLINES SA'S ECONOMIC RELIEF PLAN AND THE 4 STEPS TO FINANCIAL RECOVERY

Government is implementing a range of relief measures to support the most vulnerable South Africans during this difficult time, and to respond to the impact of the lockdown on workers and businesses

South Africa has never had to deal with a public health emergency on the scale of the coronavirus pandemic. Extraordinary funding measures totalling R500bn are being channelled into healthcare, vital municipal services & social relief.

President Ramaphosa:
Our foremost priority now is to intensify the health interventions needed to contain and delay the spread of the disease and to save lives. To date, the coronavirus has taken the lives of at least 58 people in our country.

Medical scientists and our doctors inform us that we are still in the early stages of this pandemic. Without proven therapeutic medicines or a vaccine, we can expect this to continue as a problem for the foreseeable future.

Fellow Compatriots, it is 25 days since South Africa began a nation-wide lockdown to contain the spread of the #coronavirus. It has demanded of you great fortitude and endurance.

This is a loss that we all mourn, for we know the pain and the anguish of their loved ones. From the more than 126,000 tests conducted, 3,465 confirmed cases of coronavirus have been identified.

More than 2 million people have been screened in communities across the country and, of these, over 15,000 have been referred for testing.

Alongside this unprecedented public health effort are the measures we are taking to protect livelihoods, to stave off hunger and destitution and to set our economy on a path of recovery.

This evening, I wish to address you on our economic and social response to this global health emergency.

The #COVID19 pandemic requires an economic response that is equal to the scale of the disruption it is causing.

This pandemic has exacerbated the inequalities in our society. Govt is scaling up welfare provisions & food support to assist the most vulnerable.

Govt is working on sustainable solutions to provide relief to struggling small businesses & their workers now & into the future, as the effects of this pandemic will continue to be felt in the months ahead.

 We are now embarking on the second phase of our economic response to stabilise the economy, address the extreme decline in supply & demand and protect jobs.

The measures included tax relief, the release of disaster relief funds, emergency procurement, wage support through the #UIF and funding to small businesses

As part of this phase, we are announcing this evening a massive social relief and economic support package of R500 billion, which amounts to around 10% of GDP.

The third phase is the economic strategy we will implement to drive the recovery of our economy as the country emerges from this pandemic.

Central to the economic recovery strategy will be the measures we will embark upon to stimulate demand and supply through interventions such as a substantial infrastructure build programme, the speedy implementation of economic reforms, the transformation of our economy and embarking on all other steps that will ignite inclusive economic growth.

We will outline this in coming days.

Over the past few days, we have been in consultations with various stakeholders. We have met with business, labour and the community constituency in #NEDLAC.

We have met with Premiers, MECs and Metro Mayors and with the members of the Presidential Economic Advisory Council.

Following these meetings, Cabinet considered various proposals and finalised the social relief and economic support package that stands at the centre of the second phase of our economic response.

This involves: Firstly, an extraordinary health budget to respond to coronavirus. Secondly, the relief of hunger and social distress. Thirdly, support for companies and workers. Fourthly, the phased re-opening of the economy.

The impact of the coronavirus requires an extraordinary coronavirus budget – of around R500 billion – to direct resources towards fighting the pandemic. This will include the reprioritisation of around R130 billion within the current budget.

The rest of the funds will be raised from both local sources, such as the Unemployment Insurance Fund, and from global partners and international finance institutions.

To date, the World Bank, International Monetary Fund, BRICS New Development Bank and the African Development Bank have been approached and are working with the National Treasury on various funding transactions.

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.

An amount of R20 billion will be directed to addressing our efforts to address the pandemic.

If we are to successfully manage the anticipated surge in cases and ensure that everyone who needs treatment receives it, we must provide for additional expenditure on personal protective equipment for health workers, community screening, an increase in testing capacity, additional beds in field hospitals, ventilators, medicine and staffing.

The nation-wide lockdown has had a negative impact on the revenue of municipalities at a time when the demands on them are increasing.

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.

Details will be announced in the adjustment budget tabled by the Minister of Finance. Another significant area that requires massive additional expenditure is the relief of hunger and social distress in our communities across the country.

While we have put in place measures to protect wages of workers in the formal economy & have extended support to small, medium & micro-sized businesses, millions of South Africans in the informal economy & those without employment are struggling to survive.

Poverty and food insecurity have deepened dramatically in the course of just a few weeks. To reach the most vulnerable families in the country, we have decided on a temporary 6-month Coronavirus grant.

We will direct R50 billion towards relieving the plight of those who are most desperately affected by the coronavirus.

This means that child support grant beneficiaries will receive an extra R300 in May and from June to October they will receive an additional R500 each month. All other grant beneficiaries will receive an extra R250 per month for the next six months.

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 Dept of Social Development will issue the requirements needed to access & apply for this funding. We have recognised that the food distribution capacity of government is not adequate to meet the huge need that has arisen since the start of the epidemic.

The South African Social Security Agency – SASSA – will within days implement a technology-based solution to roll out food assistance at scale through vouchers and cash transfers to ensure that help reaches those who need it faster and more efficiently.

In addition, to fill the immediate need, the Department of Social Development has partnered with the Solidarity Fund, NGOs and community-based organisations to distribute 250,000 food parcels across the country over the next two weeks.

We are deeply disturbed by reports of unscrupulous people abusing the distribution of food and other assistance for corrupt ends. We will not hesitate to ensure that those involved in such activities face the full might of the law.

While there are several interventions that already exist within government to deal with the extremely high unemployment such as the Expanded Public Works Programme and the community works programme, these are not enough.

The coronavirus crisis will lead to many people losing their jobs. An additional R100 billion will be set aside for protection of jobs and to create jobs.