President Cyril Ramaphosa has announced a new support package to help South African businesses and citizens.

He said the COVID-19 lockdown has been “absolutely necessary” to save lives in South Africa, and delay the spread of the virus.

The pandemic will take a heavy toll in the weeks and months to come, however, and will continue to be a problem for the country for the foreseeable future.

Ramaphosa said the economic response to the coronavirus and the national lockdown therefore needs to match the damage they have caused.

The next phase of the government’s plan to stimulate the economy will consist of a R500-billion package for citizens and businesses.

Following this, an infrastructure build programme will be implemented. The details of these plans will be shared in the coming days, said Ramaphosa.

R130 billion will be taken from the country’s existing budget and reprioritized to achieve this.

The UIF, global partners, and financial institutions – including the World Bank and IMF – have been approached on funding packages for the balance of the money South Africa will need.

The president said that funds will also be allocated the healthcare sector and to social initiatives to ensure people have enough money to survive, and food to eat.

As a result, a special 6-month COVID-19 social grant will be given to qualifying South Africans.

Furthermore, a R200-billion loan scheme will be launched to assist local businesses. Companies may apply to the loan scheme through local banks, potentially before the end of the month, said Ramaphosa.

Ramaphosa said the country’s economy will then be reopened gradually through a phased approach, while continuing to assess risks which are evident.

Damage to economy

The national lockdown has caused huge damage to the South African economy, admitted Ramaphosa.

Efficient Group economist Dawie Roodt told MyBroadband between 100,000 and 200,000 South African businesses could be shut down permanently due to the impact of the COVID-19 coronavirus.

He estimated that 1 million jobs could be lost as a result.

McKinsey & Co said in its recent Finding Africa’s Path report that between 9 million and 18 million formal jobs in Africa could be lost as a result of the coronavirus crisis and lockdowns implemented in countries.

A further 30 million to 35 million jobs could also see a reduction in wages and working hours.

Now read: Coronavirus impact may cost Africa over 100 million jobs