President Cyril Ramaphosa on Tuesday announced a R500 billion stimulus package, an equivalent to 10% of gross domestic product (GDP), to boost the country’s economy which has been battered by COVID-19 outbreak.
Ramaphosa said the money will be raised through redirecting around R130 billion within the current budget, the Unemployment Insurance Fund ( UIF) and from global financing institutions such as the New Development Bank, International Monetary Fund and World Bank.
stimulate demand and supply through interventions such as a substantial infrastructure build programme, the speedy implementation of economic reforms, the transformation of our economy and embarking on all other steps that will ignite inclusive economic growth,” he said.
The South African Reserve Bank bank last week said South Africa’s GDP will plunge by a mammoth 6.1% this year and that roughly 1600 firms will close shop.
The Free Market Foundation calculated that the economy lost R10 billion a day during the lockdown.
Ramaphosa also announced measures to protect companies and the economy from going under.
the major banks, the National Treasury and the South African Reserve Bank for businesses.
He said companies with a turnover of less than R300 million a year will be eligible to benefit from the scheme – in a move expected to support more than 700,000 firms and more than 3 million employees.
In addition to existing tax relief measures announced last month, he added, the government will also be introducing a 4-month holiday for companies’ skills development levy contributions and fast-tracking VAT refund.
delay for filing and first payment of carbon tax amongst other plethora of interventions.
