In a bold but risky move to rescue SA’s devastated economy, President Cyril Ramaphosa on Tuesday night, along with a R500bn Covid-19 relief package, announced there will be a phased reopening of the economy.
Built on a comprehensive stimulus package to bolster business and feed the poor, the government’s plan aims to balance health and economic considerations.
The multi-billion social and economic support package — a tenth of SA’s GDP — will comprise loans from the International Monetary Fund, World Bank, Brics bank, African Development Bank, funding from state coffers and others.
“If we end the lockdown too soon, we risk an uncontrollable insurgence of the virus. But we will follow a phased approach, gradually lifting restriction on economic activity. We need to act with flexibility and respond to the situation as it develops. On Thursday I will address measures to reopen the economy,” Ramaphosa said.
Ramaphosa said SA was in the second phase of its response to the virus, which involved stabilising the economy.
The priority, he said, would be to fund the health response.
A total of R20bn had been allocated for this purpose, which also covered an anticipated surge in coronavirus cases.
“We must provide for expenditure on personal protective equipment, community screening and additional beds, ventilators, medicine and staffing,” Ramaphosa said.
The government was also aware the country’s municipality’s were taking a severe knock, and an additional R20bn would be provided to them to increase sanitation, sustain water supplies and provide food and shelter for the homeless.
He said the government was determined to relieve hunger in communities.
“Millions of South Africans are struggling to survive. Poverty and food security have deepened dramatically,” the president said.
To counter this, a temporary six-month coronavirus grant of R50bn has been allocated to relieve the plight of those most desperately affected people.
Social grants are to be temporarily substantially increased. An additional R300 will be added to the child support grant in May, and between June and October, this will increase to R500.
All other grant recipients will receive an additional R250 a month for the next six months.
A special R350 monthly Covid-19 relief grant will be paid to unemployed people who don’t receive UIF payments or grants and this will be overseen by the department of social development.
Sassa would implement a technology-based solution in the form of vouchers and cash transfers to ensure help for those most in need, Ramaphosa said.
Social development has also partnered with the Solidarity Fund and NGOs to distribute 250,000 food parcels.
“However, we are disturbed by reports of food parcel corruption taking place around the country. The full might of the law will be brought down on those found to be engaging in this practice,” Ramaphosa said.
To assist business, an additional R100bn has been set aside for protection of jobs and job creation.
A number of tax relief measures for companies are being introduced.
A total of R40bn has been set aside for income support for workers. Provision for loans and grants to the value of R100m for SMEs, spaza shops and informal traders has also been made.
Another significant measure is the introduction of a R200bn loan to help businesses pay salaries and rent.
Meanwhile, Ramaphosa is reportedly set to deploy more than 73,000 more soldiers onto SA’s streets, at a cost of R4.59bn.
This was revealed in a letter to MPs sitting in the defence portfolio committee.
DA leader John Steenhuisen and MP Dean Macpherson both shared the letter on Twitter. MPs from two other political parties also confirmed the authenticity of the letter.
The reason for the extra deployment, said Ramaphosa, was because the number of coronavirus infections continued to increase in SA, despite the nationwide lockdown.
“On March 25 I authorised the employment of 2,820 members of the South Africa National Defence Force (SANDF) for a service in co-operation with the South African Police Service in order to maintain law and order, support other state departments and to control our border line to combat the spread of Covid-19 in all nine provinces,” wrote Ramaphosa.
“The outbreak of Covid-19 continues to increase, with reported cases across the Republic of South Africa. As a result I have decided … to employ an additional 73,180 members of the SANDF, consisting of the regular force, reserve force and auxiliary force.
“The employment of the additional members of the SANDF is for the period of April 2 to June 26.” — Additional reporting by TimesLIVE