We cannot afford to switch SA’s economic engine off, says Oppenheimer
Billionaire businessman Jonathan Oppenheimer lauds ‘most extraordinary co-operative process’ in SA
SA cannot afford to let the economy slow down drastically during the Covid-19 fight or it risks entering a full-blown economic depression, billionaire businessman Jonathan Oppenheimer said Tuesday.
“The US is going to spend $2-trillion, the UKis spending at least $500bn not to switch off the engine. We cannot afford to switch off the engine, because if we do we'll be in a true depression. So we need to find ways not to do that,” he said.
Oppenheimer was referring to the country’s weak economy and poor fiscal position entering the crisis. The government does not have the ability to use fiscal stimulus as a means to “restart” the engine.
As many as 1.5-million small businesses employing between 1-50 employees will be “cash constrained” during the period, he said.
The SA Future Trust (SAFT), established by the Oppenheimers, will start working with the country's four largest banks to provide loans to small, medium- and micro-sized enterprises (SMMEs) for the express purpose of paying a portion of employees’ salaries.
The small businesses will be able to register through its portal from Friday and nominate the employees they want to receive the direct benefits. After being vetted by the bank, the trust will begin paying out within days. The loans to the SMME will be interest free and repayable over a five-year term. Employees will incur no liability.
“This should allow employees to put food on their tables. I expect people to be signed up on the scheme and begin receiving payments next week,” said Oppenheimer.
Given that the maximum disbursement works out to R750 per week per employee over a fifteen-week duration, the grant should be able to support up to 88,000 employees from the R1bn donation by the family.
The initiative from conception to the disbursement of the first funds has been executed inside of two weeks. Oppenheimer has been blown away by the response and co-ordination demonstrated across the public and private sector.
“We have been able to do this because the South African government have been unbelievably helpful. It's been amazing the type of co-operation we have had from them, and likewise the banks who have pulled together. It’s been the most extraordinary co-operative process. If you talk about Mandela's rainbow nation, this is the rainbow nation in operation,” he said.
The design of the trust and its status as a public benefit organisation means other “like-minded people” can contribute to it and ensure that the engine keeps running, he said.
The family intends to make more contributions in the near future to community-based organisations that are also feeling the impact of the pandemic. “We are looking to capacitate government supported, NGO-supported, and community-based distribution mechanisms around food and particularly nutrition, so that they can continue to do what they are doing,” said Oppenheimer.
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