South Africa announces $26 billion to help struggling nation

JOHANNESBURG – South Africa’s president on Tuesday announced an “extraordinary budget” of $500 billion rand ($26 billion) to address the huge socioeconomic effects of the coronavirus pandemic, saying that “our country and the world we live in will never be the same again.”

President Cyril Ramaphosa in a national address said the amount is roughly 10% of the country’s GDP. The top priorities are combating the virus and relieving “hunger and social distress” as millions of South Africans struggle to survive, said Ramaphosa, adding that the budget will be described more fully in the coming days.

One-tenth of the new special budget will go toward the country’s most vulnerable people over the next six months in one of the world’s most unequal nations. The pandemic has exacerbated the inequalities, Ramaphosa said.

“We are resolved not merely to return our economy to where it was before the coronavirus, but to forge a new economy in a new global reality,” he said.

“Our economic strategy going forward will require a new social compact among all role players — business, labor, community and government — to restructure the economy and achieve inclusive growth,” said Ramaphosa.

As hunger grows, some 250,000 food parcels will be distributed across the country over the next two weeks, said Ramaphosa, who strongly condemned reports of officials diverting food aid.

Other priorities include the protection of companies and workers in a country where the economy had been struggling even before the pandemic.

Ramaphosa said the virus and measures to contain it will continue to take a severe toll “in the weeks and months to come,” with many people losing their jobs. Unemployment already had been 29%.

South Africa’s lockdown is set to continue until May 1. The measures have taken a toll but are “absolutely necessary” to save tens of thousands of lives, Ramaphosa said.

“If we end the lockdown too soon or too abruptly, we risk a massive and uncontrollable resurgence of the disease,” the president said. The loosening of the lockdown will take a “risk-adjusted approach,” he added.

He said he will address the nation on Thursday with details.

“We will therefore follow a phased approach, guided by the best available scientific evidence, to gradually lift the restrictions on economic activity,” said Ramaphosa. “We remain firm in our resolve to contain the transmission of the virus.”

South Africa has the most confirmed virus cases in Africa with 3,465.

Ramaphosa also announced special increases to the monthly social grants upon which about 16 million of South Africa’s 57 million people depend for survival. A large part of the workforce is in the low-income informal sector, which has been hard-hit by the lockdown.

The lockdown has halted most economic activity, with only essential service workers in sectors like food and healthcare allowed to operate.

South Africa’s central bank is projecting the GDP of the most developed economy in sub-Saharan Africa will fall by up to 6.1% this year.


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