South Africa: Treasury Unveils R38 Billion Package to Help Financially Battered Households and Businesses Survive Pandemic, Orgy of Violence

analysis

The biggest intervention is financial support for Sasria - helping the state-owned insurer to expeditiously honour claims from insured businesses whose properties were damaged. The insurer will receive a taxpayer-funded cash injection of R3.9-billion.

The package of relief measures to support households and businesses affected by the Covid-19 pandemic and the recent violence in KwaZulu-Natal and Gauteng will cost the fiscus (or the South African taxpayer) R38.8-billion, National Treasury has revealed.

The biggest intervention is financial support for Sasria - helping the state-owned short-term insurer to expeditiously honour claims from insured businesses that have suffered damages to their properties.

Sasria will receive a R3.9-billion cash injection from the government, said Treasury's director-general, Dondo Mogajane, on Wednesday. Sasria expects insurance claims arising from the recent looting and anarchy to be so daunting that it cannot independently fund insurance claims from its balance sheet.

Claims from insured businesses are expected to be between R15-billion and R20-billion, but business partners at the National Economic Development and Labour Council (Nedlac) expect claims to run to more than R30-billion. Sasria only has less than R15-billion (in fact, about R12-billion) on its balance sheet, which is not enough for the insurer to independently settle insurance claims....

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