JOHANNESBURG (AFP) – South African President Cyril Ramaphosa on Tuesday announced a USD26 billion relief package to support the economy and the vulnerable during the coronavirus pandemic.
In a special address to the nation, Ramaphosa announced “a massive social and economic support package of USD26.3 billion, which amounts to about 10 per cent of our growth domestic product (GDP)”.
“The impact of the coronavirus requires an extraordinary coronavirus budget…the scale of this emergency programme is historical,” he said.
Ramaphosa said South Africa was now entering the second phase of its COVID-19 response aimed at stabilising the economy, addressing the decline in supply and demand and protecting jobs.
The President said around USD2.6 billion would go to the most vulnerable through grants and 250,000 food parcels would be distributed among citizens in need over the next two weeks. Nearly 30 per cent of South Africans were unemployed before the virus struck.
Trade union federation Cosatu welcomed the measures but called for big corporations to match the amount that the government has placed on the table. “Nothing less than a one trillion rand stimulus plan will be sufficient to turn our already bleeding economy around and save workers from the pain of skyrocketing unemployment levels,” Cosatu said in a statement.
An official study published earlier found that almost two-thirds of businesses believed the pandemic would have a “substantially worse impact” on them compared with the 2008-9 financial crisis. A portion of the virus relief funds will be redirected from the current budget and the rest would come from local sources such as the unemployment insurance fund and global partners and international finance institutions.
Opposition leader John Steenhuisen said approaching institutions such as the International Monetary Fund (IMF) and World Bank for the bulk of the funding for this package was “encouraging” especially “as these institutions have made available low interest, unconditional loans specifically for COVID-19 relief”.