JOHANNESBURG – President Cyril Ramaphosa has announced a R500 billion economic and social support package as the government’s response to stimulate economic recovery hampered by the coronavirus (Covid-19) pandemic.
In a speech delivered late last night, Ramaphosa said this stimulus package amounted to 10 percent of the country’s gross domestic product (GDP). Ramaphosa said the government was going into the second phase of economic measures with this “massive social and economic support package”.
The extraordinary funding measures totalling R500bn are being channelled into healthcare, vital municipal services and social relief. “Alongside this unprecedented public health effort are the measures we are taking to protect livelihoods, to stave off hunger and destitution and to set our economy on a path of recovery,” Ramaphosa said.
“The pandemic requires the response that is equal to the scale of the disruption that it is causing.” Ramaphosa said the government had decided on a six months temporary coronavirus grant to assist the most vulnerable. This means child support grants will receive an extra R300 in May, and from June an extra R500.
The government will also allocate an extra R260 for other grant beneficiaries for the next 6 months. He said the Department of Social Development will outline the requirements for qualifying for these grants.
Ramaphosa said an additional R100bn will be set aside for the protection of jobs and the creation of jobs.
We will direct R50 billion towards relieving the plight of those who are most desperately affected by the coronavirus,” he said.
“While we have put in place measures to protect wages of workers in the formal economy and have extended support to small, medium & micro-sized businesses, millions of South Africans in the informal economy and those without employment are struggling to survive.”
He said R20bn will be made to municipalities for emergency water supply, sanitation, supply food and shelter for the homeless while R30bn within the current budget. Ramaphosa said the rest of the funds would be raised through the UIF, the NDB, the World Bank, the AfDb, and the IMF.
“This funding will be used in the first instance to finance the response to the coronavirus,” he said.
“Details will be announced in the adjustment budget tabled by the Minister of Finance. Another significant area that requires massive additional expenditure is the relief of hunger and social distress in our communities across the country.”