President Cyril Ramaphosa announces more COVID-19 economic and social relief measures





President Cyril Ramaphosa once again addressed the nation through a live stream today to announce additional economic and social relief measures that form part of the national response to the COVID-19 pandemic.

This follows a meeting with cabinet members to discuss the economic impact COVID-19 has had on South Africa and to devise an economic recovery plan to ease COVID-19’s financial impact; a similar meeting held last week ended inconclusively.

Mr Ramaphosa began by acknowledging COVID-19’s impact on the economy and said that it will continue to take a heavy toll on the country in the weeks and months to come.

While an extension of the lockdown was not directly mentioned, Ramaphosa emphasised that the economic impact the country will suffer is nothing compared to the catastrophic human, social and economic effect the virus can have on SA’s people.

The president went on to say that without a vaccine, we can expect this to continue as a problem for the foreseeable future adding that we need to intensify the health interventions needed to contain and delay the spread of the virus.

Mr Ramaphosa announced a 3-step plan and said that we are currently in the second phase to stabilise the economy, address the decline in supply and demand, and protect jobs.

In support of this, the president announced a "massive social and economic support package of R500 billion, which amounts to around 10% of GDP”

He went on to outline how this money will be spent saying that an extraordinary health budget to respond to the pandemic, the relief of hunger and social distress, the support of companies and workers, as well as the phased reopening of the economy will be prioritised during this time.

This will include the reprioritisation of around R130 billion within SA’s current budget, while the rest of the funds will be raised from both local sources such as the Unemployment Insurance Fund, and global partners and international financial institutions.

An amount of R20 billion will be directed to fund the health sector’s response to coronavirus. Additionally, this amount includes the procurement of personal protective equipment for health workers, community screening, an increase in testing capacity, additional beds in field hospitals, ventilators, medicine and staffing.

Mr Ramaphosa admits that the lockdown has harmed the revenue of municipalities and said that R20 billion will be made available to municipalities for the provision of emergency water supply, an increase in the sanitisation of public transport vehicles and facilities, and providing food and shelter for the homeless.

“Poverty and food insecurity have deepened dramatically in the course of just a few weeks. To reach the most vulnerable families in the country, we have decided on a temporary 6- month Coronavirus grant.”

This means that the government will direct R50 billion towards helping those most affected by the pandemic -

  • Child support grant beneficiaries will receive an extra R300 in May and from June to October they will receive an additional R500 each month.
  • All other grant beneficiaries will receive an extra R250 per month for the next six months.
  • Individuals who are currently unemployed and do not receive any other form of financial aid are eligible to receive a special COVID-19 Social Relief of Distress grant of R350 a month for the next 6 months.

The Department of Social Development will issue the requirements needed to access and apply for this funding.

Ramaphosa went on to condemn those abusing the food release scheme saying that he is “deeply disturbed” by reports of unscrupulous people abusing the distribution of food and other assistance for corrupt ends and added that he will not hesitate to ensure that those involved in such activities face the full might of the law.

Other key points of the president’s announcement include:   

  • SASSA will implement a technology-based solution to roll out food assistance at scale through vouchers and cash transfers to ensure that help reaches those who need it faster and more efficiently.
  • To fill the immediate need for assistance, the Department of Social Development has partnered with the Solidarity Fund, NGOs and community-based organisations to distribute 250,000 food parcels across the country over the next two weeks.
  • An additional R100 billion will be set aside for the protection of jobs and to create jobs.
  • Since the start of the lockdown, the UIF’s special COVID-19 benefit has paid out R1.6-billion, assisting over 37,000 companies and 600,00 workers.
  • R40 billion has been set aside for income support payments for workers whose employers are not able to pay their wages.
  • An R200 billion loan guarantee scheme in partnership with the major banks, the National Treasury and the South African Reserve Bank will be introduced. This is meant to assist businesses with operational costs, such as salaries, rent and the payment of suppliers.
  • Government is also working on additional support measures for vulnerable and affected sectors like the taxi industry.
  • A 4-month holiday for companies’ skills development levy contributions, the fast-tracking of VAT refunds and a 3-month delay for filing and first payment of carbon tax will be implemented.
  • The previous turnover threshold for tax deferrals is being increased to R100 million a year, and the proportion of PAYE payment that can be deferred will be increased to 35 per cent.
  • Businesses with a turnover of more than R100 million a year can apply directly to SARS on a case-by-case basis for deferrals of their tax payments.
  • No penalties for late payments will be applicable if they can show they have been materially negatively impacted in this period.
  • Taxpayers who donate to the Solidarity Fund will be able to claim up to an additional 10 per cent as a deduction from their taxable income.
  • The Minister of Finance will provide further details on the above and other tax-related announcements.

Read the rest of President Cyril Ramaposa’s speech