South Africa: Ramaphosa's Government Steps Up to the Plate With R500bn Stimulus Plan

A South African government Twitter image, outlining an economic package announced on April 21, 2020.

There will also be a 'R200bn loan guarantee scheme in partnership with the major banks, the National Treasury and the South African Reserve Bank' to provide financial relief to companies and workers.

President Cyril Ramaphosa announced a R500-billion stimulus plan on Tuesday 21 April, to inject life into an economy on a Covid-19 ventilator. Much of the focus is on the poor and vulnerable, but it falls short of what some of the ANC's alliance partners such as Cosatu wanted. And the IMF was mentioned as a source of funding, which will make them see red.

Cosatu and some other groups linked to the ANC wanted a trillion rand, but R500-billion is about 10% of South Africa's GDP, which is contracting as you read this, so it may soon amount to a bigger percentage. A lot of political wrangling would have gone into this but Ramaphosa needed to do something bold and big.

"The pandemic requires an economic response that is equal to the scale of the disruption it is causing," he said in a televised address.

Money does not grow on trees - Finance Minister Tito Mboweni is in the Cabinet to remind his colleagues of that salient fact...

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