South African president announces 500 billion rand COVID-19 plan

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A street money changer counts South African Rands in Harare, Zimbabwe, May 5, 2016. REUTERS/Philimon Bulawayo - RTX2CZDI

South African President Cyril Ramaphosa on Tuesday night revealed that 500 billion rand (26.3 billion U.S. dollars) would be devoted to relief and economic stimulus measures to deal with the impact of the COVID-19 pandemic.

“We are announcing this evening a massive social relief and economic support package of R500 billion, which amounts to around 10% of GDP,” Ramaphosa said in his TV address.

He said 20 billion rand (1.05 billion U.S. dollars) would go to the health sector, 100 billion rand (5.27 billion U.S. dollars) will be set aside for the protection of jobs and to create jobs, and 2 billion rand (105.3 million U.S. dollars) will be made available to assist SMEs and spaza shop owners and other small businesses.

The president added that “we will therefore be introducing a R200 billion (10.5 billion U.S. dollars) loan guarantee scheme in partnership with the major banks, the National Treasury and the South African Reserve Bank. This will assist enterprises with operational costs, such as salaries, rent and the payment of suppliers.”

The government is also working on additional support measures for vulnerable and affected sectors like the taxi industry. Measures such as VAT refunds and tax deferrals should provide at least 70 billion rand (3.7 billion U.S. dollars) in cash flow relief or direct payments to businesses and individuals.

With levels of hunger increasing since the lockdown was imposed, aid would be made available to vulnerable groups, Ramaphosa said.

He also announced a temporary six-month coronavirus grant.

“We will direct R50 billion (2.6 billion U.S. dollars) towards relieving the plight of those who are most desperately affected by the coronavirus,” he said. This means that child support grant beneficiaries will receive an extra 300 rand (15.8 U.S. dollars) in May and from June to October they will receive an additional 500 rand (26.4 U.S. dollars) each month.

All other grant beneficiaries will receive an extra 250 rand (13.2 U.S. dollars) per month for the next six months.

Ramaphosa also announced that the government had approached financial institutions including the World Bank, the International Monetary Fund and the New Development Bank for various funding.

The novel coronavirus has killed 58 people and infected 3,465 in South Africa. Enditem

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