Home News R500 billion economic and social response to COVID-19

R500 billion economic and social response to COVID-19



PRESIDENT Cyril Ramaphosa announced a massive R500 billion economic and social response to the COVID-19 pandemic but warned that the deadly coronavirus was still in its early stages.

Describing the stimulus package as “historic”, Ramaphosa said his administration would reprioritise R130bn from the current budget while other funds will be sourced from the Unemployment Insurance Fund (UIF), global partners and international finance institutions.

”To date, the World Bank, International Monetary Fund (IMF), BRICS New Development Bank and the African Development Bank have been approached and are working with the National Treasury on various funding transactions,” the president explained.

He said the country’s economic response to the COVID-19 pandemic is divided in three phases – the first being the declaration of the national state of disaster last month and the second announced on Tuesday.

”As part of this [second] phase, we are announcing this evening a massive social relief and economic support package of R500 billion, which amounts to around 10% of GDP (gross domestic product),” Ramaphosa said.

He said the third phase will be the economic strategy his administration will implement to drive the recovery of the economy.

According to Ramaphosa, the impact of the coronavirus requires the extraordinary R500bn coronavirus budget to direct resources towards fighting the pandemic, which had killed 58 South Africans.

He said R20bn of the funding will be directed towards the health response to coronavirus.

”Additional funding of R20bn will therefore be made available to municipalities for the provision of emergency water supply, increased sanitisation of public transport and facilities, and providing food and shelter for the homeless,” said Ramaphosa.

Finance Minister will table an adjusted budget, Ramaphosa also announced.

The government will rollout a temporary six-month coronavirus grant to reach the most vulnerable families throughout the country.

”We will direct R50bn towards relieving the plight of those who are most desperately affected by the coronavirus,” Ramaphosa said.

Child support grant beneficiaries will receive an extra R300 from next month and between June and October they will receive an additional R500 monthly.

All other grant beneficiaries will receive an extra R250 per month for the same period.

”A special Covid-19 social relief of distress grant of R350 a month for the next six months will be paid to individuals who are currently unemployed and do not receive any other form of social grant or UIF payment,” Ramaphosa added.