South Africa turns its attention to social inequality

24 Apr 20

South African president Cyril Ramaphosa has announced a Covid-19 economic rescue package equivalent to 10% of his country’s GDP.


Ramaphosa enacted a lockdown more swiftly and more strictly than many other governments with similar case numbers of the coronavirus, which has taken its toll on the economy.

His “massive social and economic support package” of 500bn rand (£21.4bn), will be financed by reprioritising R130bn from the country’s original budget, as well as through borrowing and other local sources, the president said in a televised address.

“The pandemic requires an economic response that is equal to the scale of the disruption it is causing,” said Ramaphosa.

He said the country is moving on to the “second phase” of its response to Covid-19 - the first being the lockdown.

So far, South Africa has recorded 58 deaths from the virus, but the lockdown has exacerbated deep inequality across its society.

During the past few weeks, poverty and food insecurity have become stark for many South Africans, and in some areas the government has faced protests about food shortages.

Ramaphosa said R50bn will go towards the most in need, with additions being made to child support and other benefit payments. Municipal governments will get R20bn to improve water supplies, improve sanitation and provide food and shelter to the homeless during the crisis.

The government is also in talks with the World Bank, the IMF, the African Development Bank and the New Development Bank regarding financing its immediate healthcare response to the virus.

The third phase of South Africa’s response will be aimed at driving demand while the economy recovers.

Ramaphosa said the government is planning “substantial” infrastructure spending and “speedy” economic reforms, the details of which will be made public in the coming days and weeks.

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