South African President Cyril Ramaphosa announced a historic rescue package worth billions of dollars to help stabilise the economy during the COVID-19 pandemic.
In a speech to the nation late Tuesday, Ramaphosa said the government plans to spend 500 billion rand (27 billion U.S. dollars) to support the economy and the country’s 58 million people.
That is about 10 per cent of the country’s gross domestic product.
In South Africa, 58 people have died from COVID-19, and 3,400 people have tested positive for the novel coronavirus.
The country imposed a lockdown a few weeks ago to stem the spread of the new coronavirus, which Ramaphosa said had a “devastating effect on our economy.”
Millions of South Africans in the informal economy or with no work are fighting for survival, Ramaphosa asserted, while poverty and food insecurity have increased dramatically in the past few weeks.
As part of the economic support package, a six-month grant of 50 billion rand (2.6 billion dollars) is to be set aside to help those most badly affected by the virus.
In addition, 100 billion rand (5.26 billion dollars) are set aside to protect jobs.
Ramaphosa said while parts of the funds will be raised through the budget and local institutions, he also hopes for international support.
“To date, the World Bank, International Monetary Fund, Brics New Development Bank and the African Development Bank have been approached and are working with the National Treasury on various funding transactions,” he said.
South Africa has been struggling with structural economic problems, high unemployment and an unreliable power supply for years.