Cabinet’s delays won’t cut it in Corona crisis

16 April 2020

While many South Africans are running out of food, many more face imminent unemployment, and thousands of small businesses face closure, it beggars belief that the national Cabinet has failed to reach any decision on further economic interventions. This is a signal failure of responsibility, and is unacceptable.

The Democratic Alliance (DA) calls on the Cabinet to commit to a comprehensive economic stimulus package, along the lines of the R300 billion in proposals we have made, without any further delay.

This should include a Cabinet decision to submit an urgent application to international financial institutions for billions of dollars that these institutions have made available at very low rates specifically for Covid-19 response.

The ANC has squabbled over approaching international financial institutions (IFIs), in particular the IMF. This squabbling is wasting valuable time, as other countries get ahead of us in line to access IMF relief funds. If low-interest funds are being offered for Covid-19 relief efforts, we should not hesitate to access these now.

This package should include:

An emergency budget being tabled digitally or as soon as lockdown is over;

A R 1000 additional direct cash payment for every social grant recipient for the next three months, to support the unemployed and those most vulnerable to hunger;

An additional allocation to the Department of Health to fund emergency procurement of hospital beds, ventilators, protective equipment and to pay for more medical staff working longer hours; and

Additional direct support to small and medium businesses in distress.

A comprehensive economic stimulus is not a matter that can be delayed. The country faces full blown economic depression, not just recession, with devastating human consequences. We are already beginning to see the first signs of what these consequences will be, with South Africans beginning to go hungry.

In the coming days, these people will disregard all lockdown restrictions if these restrictions mean they cannot eat. If they also cannot earn income, this will lead to looting.

The US$60 million (R1.1 billion) that Tito Mboweni said he would be seeking from IFIs is totally inadequate. South Africa needs much more money from IFIs, largely because we are broke and do not have the fiscal space to pursue an expansive economic bailout package from domestic sources.

If the government is unable to lead on the economy, they should ask for help. The DA is ready and willing to provide comprehensive economic proposals to get our economy working again.

Issued by Geordin Hill-Lewis,DA Shadow Minister of Finance, 16 April 2020