President Cyril Ramaphosa has announced that the government would provide seed capital of R150 million for the Solidarity Fund.
   Thobile Mathonsi African News Agency (ANA)
President Cyril Ramaphosa has announced that the government would provide seed capital of R150 million for the Solidarity Fund.
 Thobile Mathonsi African News Agency (ANA)

Small businesses may have some saving through the Solidarity Fund

By Philippa Larkin Time of article published Mar 26, 2020

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Business bodies have endorsed the Solidarity Fund announced by President Cyril Ramaphosa as he orchestrates a 21-day nationwide lockdown to curb the spread of the coronavirus, Business Unity South Africa (Busa) said yesterday. Ramaphosa announced that the government would provide seed capital of R150 million for the independent fund.

He said that in his discussions with the business sector, the Rupert and Oppenheimer families had pledged to provide R2billion between them to assist small business.

Busa said the nationwide call for funding would help to support the vulnerable at this time of need.

Funds received from corporates and other entities, such as stokvels, as well as individuals and the international community, would drive social cohesion. The funds would help to mitigate the spread of Covid-19 and caring for South Africans whose lives had been severely disrupted over recent weeks.

The fund would also assist with the cost of supplies and help identify opportunities for local manufacturers of products that are experiencing global supply chain disruptions, particularly in the medical, pharmaceutical and protective equipment industries.

Busa said business organisations had called on their respective members to respond comprehensively and with the same decisiveness and sense of solidarity displayed by Ramaphosa.

“The lockdown will be enforced among South African businesses in the interests of ensuring that the country is better positioned to counter the spread of Covid-19 and combat this public health emergency. The call for immediate, swift and extraordinary action is acknowledged, and business will do everything it can to ensure the president's appeal is implemented to full effect,” the organisation said.

Busa vice-president Martin Kingston said: “While we all recognise the need to make sacrifices during this demanding time, we must stand in unity with our government and stay at home to overcome the current challenging circumstances. As businesspeople, we firmly believe that through this crisis we will lay the basis for a stronger South Africa, taking collective responsibility for our future.”

North West University Business School economist Professor Raymond Parsons said the drastic lockdown came at the right time.

“It is a timeous, data-driven and proportionate response by the government, and this step must be seen in tandem with a range of key economic measures designed to soften the impact on small, medium and micro enterprises and other vulnerable groups in South Africa's society.”

He said the bulk of the impact of Covid-19 on the economy would be felt in the second quarter of the year and beyond, and South Africa was likely to experience a significantly negative growth rate for the year as a whole.

Parsons said ratings agency Moody’s should consider postponing any decision it might be contemplating to downgrade the country's sovereign debt until the impact of Covid-19 was clearer.

PERSONAL FINANCE 

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