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President Cyril Ramaphosa has announced South Africa’s largest spending plan, a unique stimulus injection into the struggling economy, in response to the Covid-19 pandemic that has led to a blockade for the past 28 days.
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The plan to inject R500 billion into a package of social and economic support is the largest single fiscal outlay in the country and is almost 10 times the amount spent in preparation for hosting the soccer World Cup 10 years ago.
In general, opposition parties reacted favorably to the president’s wide range of interventions, including, among other things, a R200 billion loan scheme with major banks; a boost of R50 billion for grant recipients; R100 billion for jobs; R70 billion in tax relief; R20 billion for municipalities; 250,000 food packages; more than R100 million to help protect front-line workers.
DA: ‘Encouraging much needed relief’
The prosecutor welcomed Ramaphosa’s announcement.
“This R500 billion package will provide much-needed relief to South Africans through grants, trade relief, taxation measures, additional health care budgeting and food programs,” said DA leader John Steenhuisen.
“Many of the measures announced echo those that the DA has been calling for to safeguard not only the lives, but also the livelihoods of millions of South Africans affected by the blockade to contain the spread of Covid-19. The president says with our support in implementing these interventions. You also have our support for the economic reforms that you committed to because without such reforms, this injection of R500 billion will be short-lived and ultimately wasted. “
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Steenhuisen said it was encouraging that Ramaphosa spoke of approaching institutions, such as the International Monetary Fund (IMF) and the World Bank, for part of the financing of this package, particularly because these institutions have made unconditional loans available at low interest specifically for Covid-19 relief.
“It is also encouraging to hear the President speak of a gradual reopening of the economy following a scientifically based risk-adjusted approach. This is essentially the smart shutdown plan that the DA proposed last week, and it is critical to starting our economy of again. We await the details of this plan. “
EFF: Keep making local PPE, stop stealing food from the poor, and empower black farmers
The EFF said that while welcoming the core issues announced in the social relief, it would await details of additional economic measures that Ramaphosa said would be communicated over the course of the week.
“The EFF notes the increase in the health budget, in particular the purchase of essential health care items, such as personal protective equipment (PPE) and clothing, an increase in health care infrastructure, and an increase in health care personnel However, we demand that South Africa should take this opportunity to locate the manufacture of all PPE with the recognition that it will be needed across the African continent The Industrial Development Corporation and all other development financing institutions and funders of State-owned should urgently develop local capacity to manufacture quality health equipment and protective clothing, “said EFF national spokesman Vuyani Pambo.
The party said it would be a “parody of economic justice” if the budget increase ended up in the pockets of intermediaries and external suppliers from China and other parts of the world.
The EFF said that increasing the social subsidy would go a long way towards alleviating the poverty and hunger that defines a substantial majority of, in particular, black people.
“We also welcome the introduction of a basic income grant for all unemployed South Africans and believe that it should be institutionalized as part of social assistance for the unemployed, even after the containment of the spread of Covid-19.
“We note that the government is exploring different strategies and plans in food distribution, one that will prevent local politicians from ruling parties and administrators from stealing food for poor people. We ultimately demand that no politician get involved. in food distribution because they have shown that they do it on a partisan political basis, nepotism and theft. “
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The party said the government should diversify the entire food value chain in South Africa “because it is currently dominated by a combination of predominantly white farmers at the production level, multinational companies at the packaging level and large local retail chain stores at the retail level ” To reflect the country’s demographics in terms of ownership and control, black small-scale food producers should integrate into the value chain and receive the necessary support, Pambo said.
It also noted the interventions in relation to small and medium-sized enterprises; the announcement to provide social assistance packages to all South Africans in the arts, recreation and sports fraternity; and the gradual reopening of the economy, saying that “I would not agree with a reopening of the economy that will endanger our people.”
However, the EFF said it continued to oppose consideration of the IMF and World Bank as sources of the economic stimulus and relief package, saying that these loans came with restrictive conditions that would deprive South Africa of its sovereignty over fiscal and monetary policy in the future.
The party said that, in its next national speech, Ramaphosa must announce comprehensive and workable interventions to save the 2020 educational calendar.
IFP: ‘cautiously optimistic’
IFP welcomed Ramaphosa’s announcement of socio-economic relief measures to stabilize the economy and protect jobs.
“However, we are cautiously optimistic that additional financing and aid measures will reach the people targeted by this aid package,” said IFP spokesman Mkhuleko Hlengwa.
“We welcome additional support for unemployed South Africans who do not receive financial assistance from the FIU (Unemployment Insurance Fund) or Sassa (South African Social Security Agency) over the next six months. Increases in children’s allowances, pensions and Disability are welcome. “
The party also welcomed measures to help the private sector and small, micro, and medium-sized enterprises through the additional measures announced to save three million jobs.
“We expect more announcements about the presentation of the adjustment budget by the Minister of Finance, Tito Mboweni, and social aid measures by the Minister of Social Development, Lindiwe Zulu, in the coming days.
“In just 25 days after the national shutdown, we have seen the government machinery running and we commend the efforts of all South Africans, particularly our health workers,” said Hlengwa.
“The IFP echoes Ramaphosa’s sentiments that the damage and impact on the economy is serious, yet we are hopeful that we will overcome these socio-economic challenges together.”
The party said its top priority was to delay the spread of Covid-19 and try to flatten the curve.
“The IFP reiterates our call to South Africans to comply with the national closure regulations and to stay safe and stay indoors.”
FF Plus: ‘A step in the right direction’
Freedom Front Plus (FF Plus) said Ramaphosa’s economic stimulus package was a “step in the right direction.”
“There are certain aspects of the stimulus package that are lacking in detail and the FF Plus is of the opinion that the payment of the newly designated social subsidies should be approached with caution as people will quickly become dependent on it and may be difficult to eliminate. “said FF Plus leader Pieter Groenewald.
He added that it was important not to create dependency on the state, but to create jobs and business development.
“The focus on the country’s poor and vulnerable is strong, but it is important to note that the definition of ‘vulnerable’ in South Africa has changed. People who were not vulnerable before the restriction and were part of the middle income group that then it provided employment, now they are vulnerable.
“It is important that the country’s budget be re-prioritized. Important aspects include allocating the health budget, alleviating hunger and other social problems, assisting and supporting businesses, and unlocking the economy,” he said. Groenewald.
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The FF Plus said it agreed with the economy’s gradual rollback approach based on risk analysis from different sectors.
“It is the logical approach to follow the steps that must be taken to tackle the pandemic locally. The party also defends its position that no aid can be linked to conditions of empowerment. Equality must apply.
“The details of commercial loans are largely lacking and it is unclear what the repayment agreement will entail. Issues such as the interest rate and whether it will be on a deferred payment basis are not known.”
“The FF Plus has already made several proposals on how to unlock the economy. Risk analysis is one of them, allowing certain provisions to be removed so that people can return to work and businesses, as sole proprietors., to get going. The FF Plus expects this to be taken into account in Ramaphosa’s recommendations on Thursday. “
ANC: “We pledge to carry out our strong oversight to ensure that aid reaches beneficiaries”
The ANC welcomed the Covid-19 financial aid efforts announced by Ramaphosa.
ANC chief whip Pemmy Majodina welcomed the progress made on the health front through the mass detection and assessment community initiative undertaken thus far and greeted health workers on the front line. ” for their heroic efforts amidst many challenges. ”
“In addition, we ask our communities to come forward for this massive screening and testing initiative, and to comply with the hygiene and prevention measures outlined by the Department of Health.
“The three-phase, far-reaching and multi-pronged approach will see measures such as tax relief; the release of disaster relief funds; R500 billion in social relief and [an] economic support package to be described in the coming days, including business support in the form of tax relief and FIU wage support. “
Recognizing that the announced measures are the product of a social pact between the government, companies, workers and the Nedlac community constituency, Majodina thanked the “feeling of great patriotism and disinterest that accompanied this social pact.”
“As ANC in Parliament, we welcome these measures as they will alleviate hunger in the most vulnerable communities, especially among the unemployed, children, women and the elderly, as well as help municipalities to provide water services for emergency, sanitation of public transportation, public infrastructure, food and shelter for homeless people. “
The ANC said it was committed to playing its role in “robust oversight” to ensure that such stimulus disaster relief reaches the intended beneficiaries.
“We encourage and urge all public officials responsible for carrying out this national mandate to rise to the occasion and diligently implement all of these decisions in a nonpartisan manner,” added Majodina.
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