Lockdown unlocks R500bn for welfare to deal with Covid-19 effects

22 April 2020 - 08:43
By Isaac Mahlangu and Kgothatso Madisa
President Cyril Ramaphosa./Siyabulela  Duda
President Cyril Ramaphosa./Siyabulela Duda

President Cyril Ramaphosa has announced a R500bn social welfare and economic support package to deal with the devastating effects of Covid-19 and the national lockdown in the country.

Addressing the nation from Pretoria last night, Ramaphosa announced that monthly social grants would be increased from next month, while there would be tax relief for companies.

Child support grant beneficiaries will receive an extra R300 next month and from June to October they will receive an additional R500, Ramaphosa said.

"All other grant beneficiaries will receive an extra R250 per month for the next six months," he said.

The president said poverty and food insecurity had deepened dramatically in the course of just a few weeks.

"To reach the most vulnerable families in our country, we have decided on a temporary six-month coronavirus grant. We will direct R50bn towards relieving the plight of those who are most desperately affected by the coronavirus."

Ramaphosa said a distress grant of R350 a month for the next six months will be paid to individuals who are currently unemployed and who do not receive any other form of
social grant or Unemployment Insurance Fund (UIF) payment.

He said the country's response was divided into three phases, with the first phase having started mid-March ahead of the lockdown.

"We are now embarking on the second phase of our economic response to stabilise the economy, address extreme decline in supply and demand and to protect jobs.

"As part of this phase, we are announcing this evening, a massive social and economic package of R500bn which amounts to about 10% of our GDP," the president said.

Ramaphosa said the third phase would be an economic strategy which will be implemented to drive the recovery of SA's economy as it emerges from this pandemic.

He said a significant area that requires massive additional expenditure is the relief of hunger and social distress in various communities across the country.

"While we have put in place measures to protect the wages of workers in the formal economy and have extended support in small, medium and micro-sized businesses, millions of South Africans in the informal economy and those without employment are struggling to survive."

Ramaphosa said R130bn would be sourced and reprioritised from the current budget while additional funds would be sourced from UIF and other global funders including the IMF and Brics Bank, among others.

Ramaphosa said of the reprioritised budget, that R50bn will go towards assisting desperate South Africans who have been negatively affected by the coronavirus, while R20bn goes towards municipalities and the health sector at the forefront of the fight against the pandemic.

He said R100bn and R200bn will be preserved for protection and creation of jobs as well as a loan guarantee scheme, respectively.

He also warned that there would be a phased approach towards reopening the economy after the lockdown.

"Central to the economic recovery strategy will be the measures we will embark upon to stimulate demand and supply through interventions such as substantial infrastructure build programme, the speedy implementation of economic reforms, the transformation of our economy and embarking on all other steps that will ignite inclusive growth in our economy. We will outline this in the days to come."