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President Cyril Ramaphosa addressed the nation on Tuesday night about additional economic and social aid measures that will be part of the national response to the Covid-19 pandemic in the future.
You can read the full text of his speech at the end of this article.
His speech arose from the recent deliberations of which he was part of with the Cabinet, the National Council of Coronavirus Command, the Coordinating Council of the President and the National Council of Economic Development and Labor, among others.
He told the country that experts had told him that the outbreak was still in its early stages.
The President focused on the economic responses the government is taking and will take to mitigate the worst effects of the pandemic.
He said that after the first phase of closure, now was the time to embark on the second phase of interventions to stabilize the economy, save jobs and businesses.
Ramaphosa said R500 billion would be spent, approximately 10% of the country’s GDP. He called it a “massive package of social and economic support.”
R200 billion of this would be disbursed in the form of loans to companies that need cash flow to survive the closure of the economy and the new global recession.
A series of tax relief measures would see some R70 billion in the pockets of companies and staff that are currently suffering.
Taxpayers who donate to the solidarity fund could claim up to an additional 10% as a deduction from their taxable income.
“To help more companies, the threshold for tax deferrals will be R100 million a year.”
R100 billion would be spent to protect jobs and even create them.
“We will follow a risk-adjusted approach to the return of economic activity, balancing the need to limit the spread of the virus and the need for people to return to work.
“R40 billion has been set aside for income support for employees whose employers cannot afford to pay wages.”
R50 billion would also be spent on a temporary increase in social subsidies for beneficiaries, as part of the third phase of the responses.
Child support recipients would receive an additional R500 through October, with a lower down payment of R300 next month. R250 per month would be paid to all other beneficiaries for the next six months. R350 per month would be paid to the unemployed who do not receive any other form of subsidy.
The social development department would oversee the request and the disbursement of funds.
The government is implementing a series of aid measures to support the most vulnerable South Africans during this difficult time and to respond to the impact of the blockade on workers and companies. # COVID19SA #CoronaVirusSA pic.twitter.com/5tSw535MIB
– Presidency | South Africa ???????? (@PresidencyZA) April 21, 2020
The fourth phase was about making the economy grow and grow again, and Ramaphosa said the outline for this plan will be delivered in the coming days, including how the country’s gradual reopening will occur.
He said R500 billion would be spent to fight the epidemic, with money coming from local and international sources. The World Bank, the African Development Bank, the International Monetary Fund, the New Development Bank had been contacted. R20 billion would have to be spent immediately on health measures.
Ramaphosa said he would give more details on Thursday about the gradual steps that will be implemented to slowly lift the blockade.
“We will follow a gradual approach. As we do so, we remain steadfast in our determination to contain the virus. We will have to act flexibly in the coming weeks and months. “
The government would prioritize protective equipment for workers and increase the number of hospital beds and ventilators. An additional R20 billion would be awarded to municipalities for emergency water supply, public transportation and sanitation, and to provide food and shelter to the homeless.
The president recognized that the country and the world “will never be the same again.”
“We are determined not only to return our economy to where it was before the virus, but to forge a new economy in a new global environment.”
In closing, he said he had faith in the strength and resilience of ordinary South Africans who have proven time and time again that they could meet any challenge presented to our country.
“We will recover, we will overcome and we will prosper.”
COMPLETE SPEECH:
My South African colleagues,
It has been 25 days since South Africa started a national blockade to contain the spread of the coronavirus.
It has required great strength and endurance.
It has caused you much suffering and required much sacrifice.
Once again, I greet you and thank you.
The coronavirus pandemic has affected their lives and damaged our economy.
Its severity will continue to have a high cost in the coming weeks and months.
The pandemic has resulted in the sudden loss of income for businesses and individuals alike, deepening poverty and increasing hunger.
The urgent and dramatic measures that we have taken to delay the spread of the virus have been absolutely necessary.
They have given us the space to better respond to the inevitable increase in infections and thereby save tens of thousands of lives.
While the national blockade is having a devastating effect on our economy, it is nothing compared to the catastrophic human, social and economic cost if the coronavirus could spread among our people without control.
Medical scientists and our doctors inform us that we are still in the early stages of this pandemic.
Without proven therapeutic drugs or a vaccine, we can expect this to continue as a problem for the foreseeable future.
Our top priority now is to intensify the health interventions necessary to contain and delay the spread of the disease and save lives.
To date, the coronavirus has killed at least 58 people in our country.
This is a loss that we all regret, because we know the pain and anguish of your loved ones.
Of the more than 126,000 tests performed, 3,465 confirmed cases of coronavirus have been identified.
More than 2 million people have been evaluated in communities across the country, and of these, more than 15,000 have been referred for testing.
Along with this unprecedented public health effort, there are steps we are taking to protect livelihoods, prevent hunger and misery, and put our economy on a recovery path.
This afternoon, I wish to address you on our economic and social response to this global health emergency.
The pandemic requires an economic response that is equal to the magnitude of the disruption it is causing.
Our economic response can be divided into three phases.
The first phase began in mid-March when we declared the coronavirus pandemic a national disaster.
This included a wide range of measures to mitigate the worst effects of the pandemic on businesses, communities, and individuals.
The measures included tax relief, the release of disaster relief funds, the emergency acquisition, salary support through the FIU and financing for small businesses.
We are now embarking on the second phase of our economic response to stabilize the economy, address extreme declines in supply and demand, and protect jobs.
As part of this phase, we announced tonight a massive package of social aid and economic support of R500 billion, which represents around 10% of GDP.
The third phase is the economic strategy that we will implement to promote the recovery of our economy as the country emerges from this pandemic.
The measures we will take to stimulate demand and supply through interventions such as a substantial infrastructure construction program, the rapid implementation of economic reforms, the transformation of our economy and the implementation of all the other steps that will ignite will be fundamental to the economic recovery strategy. inclusive economic growth.
We will describe this in the coming days.
In the past few days, we have been in consultations with various stakeholders.
We have met with companies, workers and the community at NEDLAC.
We have met with the Prime Ministers, the MECs and the Mayors of Metro and with the members of the Presidential Economic Advisory Council.
After these meetings, the Cabinet considered several proposals and finalized the package of social aid and economic support that is at the center of the second phase of our economic response.
This involves:
First of all, an extraordinary health budget to respond to the coronavirus,
Second, the relief of hunger and social anguish,
Third, support for companies and workers,
Fourth, the gradual reopening of the economy.
The coronavirus impact requires an extraordinary coronavirus budget of around R500 billion to direct resources towards the fight against the pandemic.
This will include prioritizing around R130 billion within the current budget.
The rest of the funds will be raised from both local sources, such as the Unemployment Insurance Fund, and from global partners and international financial institutions.
To date, the World Bank, the International Monetary Fund, the New BRICS Development Bank and the African Development Bank have approached and are working with the National Treasury on various financing transactions.
Some of these institutions have created funding packages aimed at helping countries that have to deal with the coronavirus crisis like us.
This funding will be used, in the first instance, to fund the health response to the coronavirus.
An amount of R20 billion will go to address our efforts to tackle the pandemic.
If we want to successfully manage the expected increase in cases and ensure that everyone in need of treatment receives it, we must provide additional costs for personal protective equipment for health workers, community screening, an increase in the ability to testing, additional beds in field hospitals, ventilators, medicine and staffing.
The national blockade has had a negative impact on the incomes of the municipalities at a time when the demands on them are increasing.
Therefore, additional funds worth R20 billion will be awarded to municipalities for emergency water supply, increased sanitation of public transport and facilities, and the provision of food and shelter for the homeless.
Details will be announced in the adjustment budget presented by the Minister of Finance.
Another important area that requires massive additional spending is the relief of hunger and social distress in our communities across the country.
While we have implemented measures to protect workers’ wages in the formal economy and have extended support to small, medium and micro-businesses, millions of South Africans in the informal economy and those without jobs are struggling to survive.
Poverty and food insecurity have dramatically deepened over the course of a few weeks.
To reach the most vulnerable families in the country, we have decided on a 6-month temporary Coronavirus grant.
We will direct R50 billion to alleviate the plight of those who are most desperately affected by the coronavirus.
This means that child support subsidy recipients will receive an additional R300 in May and from June to October they will receive an additional R500 each month.
All other grant recipients will receive an additional R250 per month for the next six months.
In addition, a special R350 Covid-19 Social Relief of Distress grant will be paid per month for the next 6 months to people who are currently unemployed and do not receive any other form of social grant or FIU payment.
The Department of Social Development will issue the necessary requirements to access and request this financing.
We have recognized that the government’s food distribution capacity is inadequate to meet the enormous need that has arisen since the beginning of the epidemic.
The South African Social Security Agency (SASSA) will implement a technology-based solution within a few days to implement large-scale food assistance through vouchers and cash transfers to ensure that aid reaches those in need. faster and more efficient.
In addition, to meet the immediate need, the Department of Social Development has partnered with the Solidarity Fund, NGOs, and community organizations to distribute 250,000 food packages across the country over the next two weeks.
We are deeply concerned by reports of unscrupulous people who abuse food distribution and other assistance for corrupt purposes.
We will not hesitate to ensure that the people involved in such activities face the full power of the law.
Although there are several interventions within the government to deal with extremely high unemployment, such as the Expanded Public Works Program and the community works program, these are not enough.
The coronavirus crisis will lead many people to lose their jobs.
An additional R100 billion will be set aside for job protection and job creation.
Since the declaration of a state of national disaster more than a month ago, the government has put in place a series of measures to support workers’ wages and help struggling businesses.
As of today, the FIU’s special benefit COVID-19 has paid R1.6 billion, helping more than 37,000 companies and 600.00 workers.
R40 billion has been set aside for income support payments for workers whose employers cannot pay their wages.
We continue to provide assistance, in the form of loans, grants, and debt restructuring, to SMEs, spaza store owners, and other informal businesses.
The value of this assistance to date exceeds R100 million.
An additional R2 billion will be made available to help SMEs and spaza store owners and other small businesses.
The IDC facility to help companies purchase or manufacture personal protective equipment has been used in recent weeks, with R162 million in financing approved to date.
Other forms of support have been extended to artists, athletes and technical personnel, as well as recyclers and participants in public works in the environmental sector.
While these measures provide obvious relief to many companies and workers, it is clear that there is a much greater need across the economy.
Therefore, we will present a R200 billion loan guarantee scheme in partnership with major banks, the National Treasury and the Reserve Bank of South Africa.
This will help companies with operating costs, such as wages, rent, and supplier payments.
In the initial phase, companies with a turnover of less than R300 million per year will be eligible.
The scheme is expected to support more than 700,000 companies and more than 3 million employees during this difficult period.
Several banks are ready to launch the product before the end of the month.
The government is also working on additional support measures for vulnerable and affected sectors such as the taxi industry.
In addition to existing tax relief measures, we will also feature a 4-month holiday for business skills development fundraising contributions, fast VAT refunds, and a 3-month delay for filing and first payment of tax on carbon.
To help more companies, the previous turnover threshold for tax deferrals is increased to R100 million a year, and the proportion of PAYE payment that can be deferred will increase to 35 percent.
Companies with a turnover of more than R100 million a year can request SARS directly on a case-by-case basis for deferrals of their tax payments.
Late payment penalties will not apply if they can demonstrate that they have been adversely affected in this period.
Taxpayers who donate to the Solidarity Fund may claim up to an additional 10 percent as a deduction from their taxable income.
In total, these tax measures should provide at least R70 billion in cash flow relief or direct payments to companies and individuals.
The Minister of Finance will provide more details on the above and other tax related announcements.
In implementing all of these measures, we are determined to ensure that women, youth and people with disabilities receive individual care and support.
The Reserve Bank of South Africa has also made an important contribution to support the real economy.
In line with its constitutional mandate, it has reduced the repurchase rate by 200 basis points, unlocking at least R80 billion in the real economy and taking other measures to provide additional liquidity to the financial system.
Various commercial banks and insurance companies have also assisted in the economic relief effort, inter alia, by delaying or reducing installment payments, providing debt relief and waiving bank fees for grant recipients.
The fourth area in which the cabinet has resolved is the gradual reopening of the economy.
We will follow a risk-adjusted approach to the return of economic activity, balancing the continuing need to limit the spread of the coronavirus with the need to get people back to work.
As I said earlier, if we end the block too soon or too abruptly, we run the risk of a massive and uncontrollable resurgence of the disease.
Therefore, we will follow a gradual approach, guided by the best available scientific evidence, to gradually lift restrictions on economic activity.
As we do so, we remain firm in our determination to contain the transmission of the virus.
Therefore, we will need to act with agility and flexibility in the coming weeks and months, and respond to the situation as it unfolds.
On Thursday, I will speak to the nation about steps that will be taken beyond the national blockade to reopen the economy.
This crisis will not last forever, and the day will come when these measures are no longer necessary.
Until then, however, we must ensure that all of our people receive adequate support.
The scale of this emergency aid program is historic.
It shows that we will spare no effort or expense in our determination to support our people and protect them from harm.
We will, and must, do what is necessary to recover from this human, social and economic crisis.
Our country and the world we live in will never be the same.
We are determined not only to return our economy to where it was before the coronavirus, but to forge a new economy into a new global reality.
Our future economic strategy will require a new social pact between all actors (business, labor, community and government) to restructure the economy and achieve inclusive growth.
Building on the cooperation that is being forged among all the social partners during this crisis, we will accelerate the necessary structural reforms to reduce the cost of doing business, promote localization and industrialization, overhaul state-owned enterprises, and strengthen the informal sector.
We will forge a pact for radical economic transformation that ensures that the economic position of women, youth, and people with disabilities advances, and that makes our cities, towns, villages, and rural areas vibrant centers of economic activity.
Our new economy must be based on equity, empowerment, justice and equality.
It must use each resource, each capacity and each innovation that we have at the service of the people of this country.
Our new economy must open new horizons and offer new opportunities.
Over the past month, South Africans have opened up to each other.
Even at this time when so much sacrifice is required of us, we look forward to a better future.
Even when we are in a moment of great danger, even when great sacrifices are demanded, even if we dare not allow our vigilance to falter, we look towards a better future.
I have faith in the strength and endurance of ordinary South Africans, who have proven time and time again throughout our history that they can rise to the challenge.
We will recover
Overcome.
Let’s prosper
May God bless South Africa and protect his people.
Thank you.
ISSUED BY THE PRESIDENCY OF THE REPUBLIC OF SOUTH AFRICA
You can reproduce the address as provided below.
In his weekly letter to the nation yesterday, Ramaphosa offered a frank assessment of the current situation almost a month after the imposed shutdown to limit the spread of Covid-19.
He said the government chose “to err on the side of precaution” by implementing disaster measures that critics say have caused more damage to the economy than necessary.
The president admitted that the inequalities and hunger highlighted by the coronavirus outbreak are due not only to the past of apartheid but to a “fundamental failure in our post-apartheid society.”
He promised that he would soon provide more clarity on the direct measures that would be taken to ensure that the most vulnerable South Africans do not have to worry about the origin of their next meal.
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