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South African president unveils $26 billion virus relief plan

South African President Cyril Ramaphosa on Tuesday announced a 26 billion U.S. dollars relief package to support the economy and the vulnerable during the coronavirus pandemic.

In a special address to the nation, Ramaphosa announced “a massive social and economic support package of 500 billion rand (26.3 billion U.S. dollars), which amounts to about 10 percent of our GDP.”

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“The impact of the coronavirus requires an extraordinary coronavirus budget… the scale of this emergency program is historical,” he said.

Ramaphosa said South Africa was now entering the second phase of its COVID-19 response aimed at stabilizing the economy, addressing the decline in supply and demand and protecting jobs.

The president said around 2.6 billion U.S. dollars would go to the most vulnerable through grants and 250,000 food parcels would be distributed among citizens in need over the next two weeks.

Nearly 30 percent of South Africans were unemployed before the virus struck.

Trade union federation Cosatu welcomed the measures but called for big corporations to match the amount that the government has placed on the table. 

“Nothing less than a one trillion rand stimulus plan will be sufficient to turn our already bleeding economy around and save workers from the pain of skyrocketing unemployment levels,” Cosatu said in a statement.

Dire warnings 

An official study published earlier found that almost two-thirds of businesses believed the pandemic would have a “substantially worse impact” on them compared with the 2008-9 financial crisis. 

A portion of the virus relief funds will be redirected from the current budget and the rest would come from local sources such as the unemployment insurance fund and global partners and international finance institutions.

Opposition leader John Steenhuisen said approaching institutions such as the IMF and World Bank for the bulk of the funding for this package was “encouraging” especially “as these institutions have made available low interest, unconditional loans specifically for COVID-19 relief.”

South Africa is in its fourth week of a five-week lockdown imposed from March 25.

The country has so far reported 3,465 coronavirus infections and 58 people have died.

“Medical doctors inform us that we are still in the early stages of this pandemic,” Ramaphosa warned adding that the lockdown would not abruptly end but eased in phases.

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