Brenthurst Discussion Paper 2020
On Tuesday 21 April 2020, President Cyril Ramaphosa, had this to say about South Africa’s fight against the Covid-19 pandemic.
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. Our economic strategy going forward will require a new social compact among all role players – business, labour, community and government – to restructure the economy and achieve inclusive growth.
Building on the cooperation that is being forged among all social partners during this crisis, we will accelerate the structural reforms [emphasis added] required to reduce the cost of doing business, to promote localisation and industrialisation, to overhaul state-owned enterprises and to strengthen the informal sector.
The President was announcing the country’s largest-ever emergency spending plan to help South Africans cope with Covid-19 and its effects.
Describing it as ‘our economic response to stabilise the economy, address the extreme decline in supply and demand and protect jobs’, Ramaphosa said the government would spend some R500 billion – around 10% of GDP.
Measures announced included R100 billion for the protection of jobs and for job creation; R40 billion for income support for workers whose employers could not pay them; and an R200 billion loan guarantee scheme in partnership with the major banks. The scheme intrinsically forecasts the extent of the loss caused by Covid-19 in identifying the stimulus required.