Cyril Ramaphosa. Picture: ESA ALEXANDER
Cyril Ramaphosa. Picture: ESA ALEXANDER

President Cyril Ramaphosa has announced a R500bn economic support package for SA, which amounts to 10% of the country's GDP.

Ramaphosa said the Covid-19 pandemic required an economic response equal to the scale of disruption it was causing. 

The president was addressing the nation on the additional economic and social relief measures that formed part of the government's response to the pandemic.

This follows a cabinet meeting held on Monday and deliberations with the national coronavirus command council, the president’s co-ordinating council, and the national economic development and labour council (Nedlac), among others.

Ramaphosa said there were three phases to the response. 

“We are now embarking on the second phase of the economic response to stabilise the economy and address the decline in supply and demand and protect jobs,” he said.

The president said the response required an extraordinary health budget, , the relief of hunger and social distress, support for companies and workers and the phased reopening of the economy. 

Ramaphosa said the impact of the coronavirus required an "extraordinary coronavirus budget" of around R500bn to direct resources to fighting the pandemic.

This would include the prioritisation of around R130bn within the country's current budget. The rest of the funds would be raised from both local sources such as the Unemployment Insurance Fund (UIF), and from global partners and international finance institutions.

“To date the World Bank, the International Monitory Fund, the Brics Bank and the African Development Bank have been approached and are working with national Treasury on various funding transactions,” he said.

“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.”

SA is in the fourth week of a five-week national lockdown, which was imposed in a bid to curb the Covid-19 pandemic that has infected nearly 3,500 people in SA and left nearly 60 dead.

The virus has caused panic and fear across the globe and brought economies to a standstill. SA’s lockdown has compounded the country’s own economic and social problems.

Ramaphosa announced additional funding for health, municipalities, small and medium businesses, companies and workers, among other things. 

He announced an increase in social grants to help those who were most desperately affected by the virus. 

Child support grants would be increased by R300 next month, and from June to October recipients will receive an extra R500 a month. 

All other grants will be increased by R250 a month for the next six months, he said. 

Ramaphosa said a special Covid-19 social relief of distress grant of R350 a month for the next six months would be paid to those who were currently unemployed and did not receive any other form of social grant or UIF payment.

The department of social development would issue the requirements needed to access and apply for this funding.

The national lockdown is expected to come to an end on April 30. Ramaphosa however said the cabinet had decided that there needed to be a phased re-opening of the economy. 

“We will follow a risk-adjusted approach to the return of economic activity, balancing the continued need to limit the spread of the coronavirus with the need to get people back to work,” he said.

“As I have said previously, if we end the lockdown too soon or too abruptly, we risk a massive and uncontrollable resurgence of the disease.”

Ramaphosa said the phased approach would be guided by the best available scientific evidence, to gradually lift the restrictions on economic activity.

“As we do so, we remain firm in our resolve to contain the transmission of the virus. We will therefore need to act with agility and flexibility in the weeks and months ahead, and respond to the situation as it develops.”

The president said he would address the nation on Thursday on measures that will be taken beyond the lockdown to re-open the economy. 

quintalg@businesslive.co.za

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