Government has published a breakdown of its R500 billion economic support package to help battle the impact of the coronavirus pandemic.
The package – which is equivalent of 10% of the country’s GDP – will be used to support the vulnerable South Africans, and to respond to the impact of the lockdown on workers and businesses, President Cyril Ramaphosa said in a national address on Tuesday (21 April).
Below government outlined how this money will be distributed:
- R20 billion – to fund the health response to fight coronavirus;
- R20 billion – an additional amount to be made available to municipalities for the provision of emergency water supply, increased sanitisation of public transport and facilities, and providing food and shelter for the homeless;
- R50 billion – to be used to relieve the plight of those who are most desperately affected by the coronavirus through social grants;
- R100 billion – to be set aside for protection of jobs and to create jobs;
- R40 billion – set aside for income support payments for workers whose employers are not able to pay their wages;
- R2 billion – to be made available to assist small and medium enterprises and spaza shop owners and other small businesses;
- R200 billion – a loan guarantee scheme to be introduced in partnership with the major banks, National Treasury and the South African Reserve Bank to assist enterprises with operational costs, such as salaries, rent and the payment of suppliers;
- R70 billion – amount of tax-related cash flow relief or direct payments to businesses and individuals;
Other measures include:
- R100 million – value of assistance in the form of loans, grants and debt restructuring provided to small, medium and micro enterprises, spaza shop owners and other informal businesses;
- R162 million – finance approved by the Industrial Development Corporation to support companies to procure or manufacture personal protective equipment;
- A potential R80 billion – the amount unlocked after the South African Reserve Bank cut the repo rate by 200 basis point.
Ramaphosa said that funding for this package will be raised locally through institutions such as the Unemployment Insurance Fund (UIF), and through international groups such as the World Bank and the International Monetary Fund.
He added that cabinet has agreed to the phased -reopening of the country’s economy.
“As I have said previously, if we end the coronavirus lockdown to abruptly we face the uncontrollable spread of the disease,” he said. “We will therefore follow a phased approach in reopening the economy.”
He said that government will balance the need to ensure that infections are minimised, with the need to get people back to work. More details of the approach will be announced on Thursday, he said.