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<\/a><\/p>\nSouth Africa\u2019s economy could contract by as much as 16.1% this year, depending on how long it takes to contain the coronavirus pandemic and for the economy to recover to the end of 2020, Treasury estimates showed.<\/p>\n
\u201cWe have to move quickly to get the economy back to normal, but also take into account that we have to contain the impact of the virus,\u201d Dondo Mogajane, the National Treasury\u2019s director-general, said.<\/p>\n
Treasury\u2019s scenarios showed that more than seven million jobs could be shed as a result of the virus and lockdown that has brought almost all economic activity to a standstill.<\/p>\n Manufacturing, construction, trade, catering and accommodation, as well as financial and business services will be the worst-affected sectors.<\/p>\n The Treasury expected a \u201csubstantial\u201d shortfall in revenue from the R1.43 trillion tax-collection estimate in the 26 February budget. That\u2019s due to weakness in the economy and virus-related tax relief measures, the Treasury said.<\/p>\n While the forecasts still need to be updated, the tax take could fall by 32% or more, according to finance minister Tito Mboweni.<\/p>\n A ban on the sale of alcohol and tobacco products during the lockdown has already led to an under-recovery of more than R1.5 billion this month alone, said Edward Kieswetter, the commissioner of the South African Revenue Service.<\/p>\n The country is counting on accessing $5.07 billion from multilateral lenders and development banks including the International Monetary Fund, World Bank and New Development Bank to help finance the government\u2019s stimulus package.<\/p>\n The tenor for some of these loans would be as long as 35 years, which includes a grace period and no conditionality post-disbursement, according to the Treasury.<\/p>\n The cost of funding the loans is favourable relative to market pricing because they are not based on country-risk premium, the Treasury said.<\/p>\n<\/a><\/p>\n<\/a><\/p>\n<\/a><\/p>\n