OPINION: The massive financial package by CR17 unpacked

Commander in Chief of the South African Armed Forces His Excellency President Cyril Ramaphosa.

Commander in Chief of the South African Armed Forces His Excellency President Cyril Ramaphosa.

Published Apr 22, 2020


JOHANNESBURG -  I have been mulling how to respond to that speech of last night. 

Sing hallelujah, dissect it bit by bit or make just broad comments, even just leave it be and do your own thing.

Well I have done the Rod Solomons thing and applied my mind. These are considered views and I did not just shoot my mouth off after listening to the speech. 

The stakes are way too high to treat it lightly and just let it be and give politicians a free ride to do things with an uncritical citizenry just watching from the sides. 

So the comments I am making here must be read together with the views I have expressed since the virus started. 

This should give you a better context. You can also read the founding documents of the #SA1STFORUM to figure out what drives me. 

So here it goes:

1. I am glad that at last we are making a substantial amount of money available about 10% of GDP to deal with this Disaster and restart South Africa. R500bn is not play-play money, although my sense is even more might be required. Kudos to the President and his Finance Minister to up the war-chest so significantly. 

2. I am glad that they are pragmatic about where to find this money. The R130 billion reprioritization of the existing budget is excellent news. (The key will be to see the detail about this. Make some tough choices and close down or cut out certain stuff that just drains money with no real returns. Some of us can give you a list in that regard). Approaching all the multilateral financial institutions (time to be pragmatic & adult about these things). 

3. I am concerned that when he spoke about the need for the major macro economic changes that must occur, I did not hear anything new. 

In fact I heard the same mantra of : Economic Recovery Package, Stimulate the infrastructure built program, Inclusive Growth, radical economic transformation, overhaul of SOEs, etc. Is the cupboard bare in terms of how to do this? . Remember, here is the chance to be bolder and more innovative in remodeling the South African economy. 

4. Clearly the Minister of Health and his team is seeing a scary future that we cannot see or comprehend. Hence a massive R20 billion allocated to the health department. I trust it will be enough to enable them to do what they must.

5. A huge R20bn is set aside to enable municipalities to ramp up crucial services to their residents. They are currently unable to properly spend the monies allocated to them who say they will be able to do it tomorrow and in a more impactful, value for money and corrupt-free way. This is a huge red flag for me. 

6. A big intervention is the support for employees and companies in order to minimize job losses and company closures. I am keen to see the detail of that plan to spend R100 billion to protect existing jobs and create new jobs. Will it be less bureaucratic to access this support. Employees are currently struggling to access support from the UIF, how will it improve? The key is who helped to put this plan together, the usual suspects or actual enterpreneurs, business owners of small and large business, sole propprietors, actual workers, some of our best, thinkers & advisors in this field?

7. In the absence of any detail, I am concerned about this R200bn loan guarantee scheme for companies with a turn over up to R300m per year. My concern is the involvement of the banks and how this is potentially money for jam to them and how people will have to jump through hoops to get assistance. South African banks are generally risk averse. Those companies with existing  relationships with banks over the years will be favored, mark my words (read between the lines to see what I mean). 

8. A massive concern is the lack of any talk of support for the self employed like consultants, professionals working on their own, those who own a hairdresser, a personal trainer, who runs a guest house, a bottle store owner, a restaurant owner, a bakkie-builder, etc. Those people must be running into a million or more and they have families and lives to live. I sincerely hope that when the economic cluster Ministers reveal their plans, containing new thinking, my concerns will be addressed. 

9. The phased opening of the economy is obviously the correct approach to follow. So in my humble opinion this means phased loosening of the lockdown, taking scientific advice and information into account.

10.The big ticket item announced is obviously the big hunger and social distress relief package (HSDRP).

- All those increases to the various grants for the next 6 months are great and needed. (I wonder if the government will be able to reduce it after the 6 months are over because people will become used to it? ) 

- The Special Covid-19 grant of R350pm for the next 6 months is obviously some kind of B.I.G. A massive caveat is who can get it. He said those who don't get any other grant. So, because I don't receive any grant, can I also get this Covid-19 grant for 6 months? Methinks although this is a start, this amount is way too inadequate to really help an 'ordinary family' who don't receive any of the other grants. 

- The introduction of vouchers and cash transfers to people electronically, probably via their phones is a good move. In this way he is using code to acknowledge that the current SASSA system is not working and they will use technology and work with others to roll this out. Good, I hope the banks & supermarkets won't make huge fees of this, but I guess they will. 

- The announcement of 250 000 food parcels being distributed by SASSA & SOCIAL DEVELOPMENT with their partners over the next 2 weeks leaves me with trepidation. They struggled to handle it currently and this system is currently  fraught with so much problens, that I don't need to repeat. I hope they get logistics companies and the army to help. (Please keep the local politicians away). I still would have preferred local community kitchens to make food & take it to people's houses. 

- I remain unconvinced that Lindiwe Zulu is the best person to handle this crucual portfolio. For heaven's sake CR17, this is like a World Cup, put your best players on the field.

11. A very interesting announcement was the 10% tax break to be given to those donating to the Solidarity Fund. Really CR17, was that really necessary? Why can the rich just not give without ALWAYS getting a return in some way!

12.Whilst I am on about the rich, let's deal with this. Can all those business organizations and private sector big wigs who was so enthusiastic about this HUGE 'stimulus' package that the South African government put on the table, please do the following: Can they please put THE  DETAILED STIMULUS and HSDRP of the Private sector on the table with numbers (meaning the amount of money they will put on the table).

13.A major omission is support to those who are currently not part of the poor bracket but are living on the borderline and two or three paychecks away from disaster. Some will probably try and get sone assistance from the, UIF to get a portion od their salaries but that might never be enough to pay rates, rent, bonds, debt, pay school or university fees, buy food, etc. 

What about them, the so-called middle class that can conceivably be decimated during the period of this crisis? Or is it up to the Ministers to come up with 'out-of-the-box' plans? 🤔

14. This plan reminds me of the goings on at my favorite team, the Mighty Arsenal.  When we hear the new coach Mikel Arteta speak about his new approach, philosophy and how he wants us to play it enthuses us die-hard supporters who have been so disappointed by the previous coach. Many of us thought that the team was weak then but thought under Arteta things would be different. Alas, there were a few games they played very well, other times they were awful, some games some of the players we had question marks against, performed well but they reverted to type and were just shocking again. This is untill Arteta and the board finally realized that if we want to achieve our glory days again, they will need to get rid of almost the whole team and make wholesale changes. 

Mr. President this plan is like Mighty Arsenal, unfortunately we are not going to succeed with the players or most of the players that you have in your current cabinet!

15.This is a huge pie for the corrupt and looters to nible on so let us be extra vigilant!


I noticed that the President has quietly approved a massive deployment of military personnel. 

CR17, whilst I understand the concern of your cabinet about social unrest, (remember many of us warned about this potential) don't you think that deploying so much force  is a sign of a weak government that is not in tune with its people. 

It must now use force to make people see the way. Is a humane, engaging and wise way not the way to go? If you take people along the way and take time to make them understand the correctness of this journey in easily understandable AND in their language not the way to go? Did you and your cabinet not learn from the folly of the apartheid regime about using force against our people? 

I thought upholding of human rights and persuasion runs through your DNA?... Just asking. 

Advocate Rod Solomons is the Convenor of the South Africa First Forum (a civil activist group focussing on Accountability and Governance issues) as well as a socio-political commentator.


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