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Grant increases, food vouchers in R500bn stimulus package

The ‘extraordinary’ economic support package will make up 10% of GDP.
President Cyril Ramaphosa unveiled a special Covid-19 grant for those who are unemployed and don't qualify for a Sassa grant or UIF. Image: Siyabulela Duda, GCIS

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. 

Read:
SA to increase welfare provision over coronavirus – Ramaphosa
LIVE ARCHIVE: President on additional economic and social relief measures

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. 

Read: Testing and tracing to intensify as Covid-19 hits townships

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.

Food support 

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.

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Well oh well – US$ 26 billion going to flow through the FX market- proceeds of these ZAR 500 billion loans.

The so-called ”Computer” bids will soon disappear and this market will have a massive turnaround – leads and lags with exporters forced to pile back in and importers selling their longer-term forward cover (dynamic hedging)

The SARB will have a nice run to replenish their reserves in the months to come by ‘sticking” their bid in the market to buy back these US$ – at a much lower level!

R500 billion! Why approach the IMF, Brics Bank and other Global Institutions?

Just ask Ace and the Gupta’s to repay what they stole and we’ll have change to buy cows for the Estina Dairy Farm and to catapult The economy on growth trajectory on top of that!

It goes beyond me that despite the pandemic and financial crisis, mums the word at the Zondo Commission when all their findings are the reason we are in financial dire straits. Covid19 is not all to blame

As far as i’m concerned that should be a priority above a stimulus to get the stolen money back

Government is used to paying bailouts, this is no different!

Lets hope they know what they’re doing. At R3 billion interest per day, one wonders what the effect of loans will have on our debt repayment

In for a penny in for a pound i guess!

None of that money is there. It’s basically money we have to go and borrow.

Agree. it an empty promise … while Rome burns … he has to do something or show he is doing something to help.

Which is exactly what every country is doing. Australia is literally printing money.

I need someone to explain to me what the lockdown has achieved other than take a sledgehammer to a fragile economy.

The virus is still there, huge parts of the country couldn’t lock down properly because of crowded conditions, and cases are still expecting to go exponential.

So what exactly did we achieve? The government polished off the economy with the excuse that they’re saving us, and now they ride to our rescue with largesse.
Great for garnering votes

But guess who’s going to get the bill for all of this?

The very few taxpayers still standing

We avoided 40 million cases and 10million deaths. We have achieved better than Europe and the US in curbing the increase of the pandemic. Despite being this Africa that the western world calls backward.

And how do you know that we avoided 40million cases? Is the crisis over?

They will all tell you that this will still go exponential. So by their own admission they have avoided nothing

End of comments.

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