Billions to be pumped into economy to lessen effects of lockdown

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A tourism relief fund, a R1.2bn package to beef up food production and R3bn for industrial funding — these are among the measures announced by the government to lessen the economic impact of the impending 21-day national lockdown.

The  lockdown, announced by President Cyril Ramaphosa on Monday night in an attempt to slow the spread of Covid-19 infections, kicks off at midnight on Thursday.

The  three-week shutdown will result in businesses that are not deemed essential closing up shop.

The containment measure is expected to have a crippling effect on an economy already hamstrung by slow growth and an unreliable power supply.

Land and rural development minister Thoko Didiza announced  on Tuesday that her department had set aside a package of R1.2bn to address the effects of the curtailment measures and  to ensure sustainable food production after the pandemic.

An additional R100m would be made available to the Land Bank to help farmers in distress, the minister said.

Didiza  said though the measures announced by Ramaphosa to deal with the pandemic would affect many businesses negatively, the country’s food supplies and agricultural production would not be compromised.

“The department of tourism has made an additional R200mavailable to assist small, micro and medium enterprises in the tourism and hospitality sector which will be under particular stress as a result of the travel restrictions imposed as part of the containment measures.

“This is amongst the interventions we believe will help to cushion our society from these economic difficulties,” tourism minister Mmamoloko Kubayi-Ngubane said.

“We are committed to putting people and their wellbeing first, ahead of profits, as part of a response to Covid-19.

“At the same time, we are committed to see the sector being able to pick up the pieces post the Covid-19, thus our role will be to respond and support the industry during this period.”

The fund would benefit SMMEs in all nine provinces and various tourism sub-sectors.

Kubayi-Ngubani said the dearth of business activities for more than a month could spell the end for such enterprises.

She said there would be a necessary degree of bias, in the government’s  mitigation measures, towards rural areas, townships, women, young people and people with disabilities.

Concerning large businesses, the government has looked at relief measures for those registered with the Unemployment Insurance Fund.

On Friday, the government announced certain exemptions from competition laws for banks to permit them to work together to devise programmes and relief measures to help small businesses, consumers and companies in distress.

Trade and industry minister Ebrahim Patel said the measures were meant to help banks co-ordinate on measures that could be used to support businesses and ordinary account holders during the lockdown period.

“In particular the exemptions will enable the banks to co-ordinate on matters like payment holidays and debt relief for businesses and individual citizens subject to financial stress, to put limitations on asset repossessions of business and individual citizens, and to co-ordinate on the extension of credit lines to individual and businesses subject to financial stress,” he said.

The exemptions, Patel said, would allow banks to work together to ensure the continuing functioning of the payment system as well as sharing information and resources to ensure continued availability of money at ATMs, branches and businesses.

“We have basically done extraordinary things to enable the banking system to remain strong and intact so that South Africans can access banks in the next three weeks,” he said.

The government also published a special government gazette on Tuesday enabling shopping mall owners and tenants to consider “co-ordinating their actions” and reach agreements to address matters such as payment holidays or rental discounts to tenants.

Patel said the regulations would place limitations on evictions to ensure shops and others whose income would fall sharply during the lockdown have the necessary flexibility and space to survive with as few adjustments as possible. — TimesLIVE 

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