This is how SA's R500bn relief package will be spent
Johannesburg - President Cyril Ramaphosa has announced a R500bn economic and social relief package for the country. The president made the announcement on Tuesday night during a national address to outline the government's expanded economic and social relief measures for the Covid-19 virus.
The country is on Day 26 of a lockdown which is expected to end at the end of April. Ramaphosa said he would address the nation again on Thursday.
Ramaphosa said R130bn of the required R500bn would be sourced from reprioritizing the budget, which the Finance Minister Tito Mboweni would expand on in the coming days.
Ramaphosa said Treasury was already in talks with the Unemployment Insurance Fund, the World Bank, the New Development Bank (BRICS), the African Development Bank and the International Monetary Fund to source more than R370bn required to get the stimulus package going.
“The impact of the coronavirus requires an extraordinary coronavirus budget – of around R500bn – to direct resources towards fighting the pandemic.
“This will include the reprioritisation of around R130 billion within the current budget,” said Ramaphosa.
He said the country was already in talks with lenders.
“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,” said Ramaphosa.
The president said R20bn would be directed to the health sector in a bid to address efforts to curb the spread of the virus.
“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,” said the president.
For municipalities, he said an additional R20bn was to be set aside for the provision of emergency water supplies, increased sanitisation of public transport and facilities, and providing food and shelter for the homeless.
On social grants, more than R50bn was set aside for beneficiaries and a temporary social grant relief fund would be created for the unemployed. This would enable the government to contribute at least R350 per month to those in need during the period of the lockdown.
Ramaphosa also said they were introducing a R200bn loan guarantee scheme in partnership with the major banks, Treasury and the South African Reserve Bank.
“This will assist enterprises with operational costs, such as salaries, rent and the payment of suppliers. In the initial phase, companies with a turnover of less than R300 million a year will be eligible.
“It is expected that the scheme will support over 700,000 firms and more than 3 million employees through this difficult period. A number of the banks are ready to roll out the product before the end of the month.
“Government is also working on additional support measures for vulnerable and affected sectors like the taxi industry,” said the president.
He also said an additional R2bn would be set aside for SMMEs and spaza shop owners.
Mboweni would also announce in the coming days how the government's infrastructure build programme, the speedy implementation of economic reforms, the transformation of the economy and embarking on all other steps would ignite inclusive economic growth.
Ramaphosa also said R100bn would be set aside to protect and create jobs.
Ramaphosa said the world as we knew it would never be the same again. He called on South Africans to support each other throughout this period.
“This crisis will not last forever, and the day will come when these measures are no longer needed. Until then, however, we must ensure that all of our people receive adequate support. “The scale of this emergency relief programme is historic. It demonstrates that we will not spare any effort, or any expense, in our determination to support our people and protect them from harm.
“We will – and we must – do whatever it takes to recover from this human, social and economic crisis. Our country and the world we live in will never be the same,” he said.IOL
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