President Cyril Ramaphosa has announced a R500 billion stimulus package, to mitigate against the social and economic disruption of the Covid-19 pandemic that’s set to launch the country into a deep recession.
Speaking to the nation on Tuesday evening, Ramaphosa said the “extraordinary coronavirus budget” of half-a-trillion-rand, which amounts to 10% of the country’s gross domestic product, will form part of phase two of the state’s three-phased economic intervention.
The support package will be funded by reprioritising around R130 billion from the National Treasury’s current budget, while the remaining R370 billion will be raised from both local and global funding sources.
Treasury has approached the World Bank, International Monetary Fund, BRICS New Development Bank and the African Development Bank for funding.
The country has entered its fourth week of an extended lockdown that is meant to end on April 30. On Tuesday Health Minister Zweli Mkhize announced that the virus has infected close to 3 500 people and has killed 58 people, while 1055 people have recovered.
Ramaphosa said R20 billion would be allocated towards health efforts aimed against the virus. An additional R20 billion will go to municipalities to assist them in providing emergency water supply, increased sanitisation of public transport and facilities, and food and shelter for homeless people.
“If we are to successfully manage the anticipated surge in cases and ensure that everyone who needs treatment receives it, we must provide for additional expenditure on personal protective equipment for health workers, community screening, an increase in testing capacity, additional beds in field hospitals, ventilators, medicine and staffing,” said Ramaphosa.
Finance Minister Tito Mboweni will provide additional details when he tables an adjusted budget.
Social grant increases
During the lockdown period, many people have not been able to go to work or participate in any economic activity unless they’re providing an essential service in health, security, communication or food production.
The consequence of this has been a dramatic deepening of poverty and food insecurity levels among the most vulnerable people in the country, said Ramaphosa,
In response, the government has allocated R50 billion towards social grants in order to relieve the “plight of those who are most desperately affected by the coronavirus”.
The child support grant will be increased by R300 in May and thereafter by R500 each month from June to October.
Other grant beneficiaries will receive an added R250 per month to their normal grants for the next six months until October.
Government has also established a Covid-19 Social Relief of Distress grant of R350 a month that will also be paid until October for people who are unemployed and do not qualify for a grant or payment from the Unemployment Insurance Fund.
The Department of Social Development will provide more details on the requirements needed to access and apply for this funding.
The South African Social Security Agency (Sassa) will also be rolling out a “technology-based solution” that will supplement government’s current efforts to distribute food packages, by introducing vouchers and cash transfers.
This comes as local and provincial governments struggle to distribute food packages at scale in a quick and efficient manner, as the packages run out while many poor and desperate people are still waiting in line for assistance. At the same time, there have been multiple reports of officials stealing or selling the food packages meant for the poor.
Ramaphosa said these reports are “disturbing” and government will not hesitate to ensure that these “unscrupulous people” will face legal consequences for stealing from initiatives that are meant to provide relief for the vulnerable.
In the next two weeks the Department of Social Development together with the Solidarity Fund, non-governmental organisations and other community-based organisations will distribute 250 000 food parcels across the country.