QUESTION 1 ON THE ECONOMIC RECOVERY PLAN 

Honourable Members,

The global coronavirus pandemic is both a health crisis and an economic crisis.

As we have acted to protect the health and lives of all our people, we have also had to limit the severe economic impact.

Our economic response can be divided into three phases.

The first phase began in mid-March when we declared the coronavirus pandemic as a national disaster.

This included a broad range of measures to mitigate the worst effects of the pandemic on businesses, communities and individuals.

The measures included tax relief, the release of disaster relief funds, emergency procurement, wage support through the UIF and funding to small businesses.

Towards the end of April, we embarked on the second phase of our economic response, which included a R500 billion support package to stabilise the economy and protect jobs.
 
This has entailed a temporary increase in payments to social grant beneficiaries, a special COVID-19 grant of R350 a month for six months to the unemployed, and a loan guarantee scheme of R200 billion to support small and medium-sized businesses.

It is worth noting that the R500 billion fiscal support package is worth around 10 percent of GDP, larger than equivalent support measures announced by other emerging markets in the G20.

The third phase is a comprehensive economic strategy to drive the recovery of our economy as we emerge from the pandemic. 
 
Given the massive impact that coronavirus is expected to have on jobs, our immediate task is to create employment.

We will do this by expanding public employment programmes, increasing investment in public infrastructure and services, and enabling greater job creation by the private sector. 

Progress is being made within government to increase investment in infrastructure, with several major projects ready for implementation.

Next week, the Presidency will be convening the Sustainable Infrastructure Development Symposium, which brings together funders, policy makers, state owned enterprises, academic and the private sector to look at investment opportunities in infrastructure.

We should see infrastructure investment that mobilises funding from a variety of public, private and multilateral sources as a significant part of the stimulus that our economy needs.

This pandemic has highlighted the vital importance of the informal sector and of small businesses in meeting the basic needs of our people. 

Our programme of economic recovery needs to provide greater support to these enterprises, which provide income and employment for many young people. 

At the same time, we will implement key reforms that support long-term growth.

These include measures to support the building of energy capacity, reforms to improve port capacity and efficiency and the licensing of high-demand spectrum.

We have also been focused on the measures required to protect African economies and ensure that they effectively recover from the effects of the pandemic.

In my capacity as Chairperson of the African Union, I have held several engagements with leaders and institutions in the international community to call for a comprehensive economic package to provide economic relief to African economies.

This package would need to include debt and interest waivers, which will provide poorer countries the much-needed fiscal space to deal with the economic ramifications of the virus. 

I have also appointed six AU Special Envoys to solicit financial support for the continental effort from G20 countries, international organisations and the African and international business communities.

They have also made significant progress in mobilising material support for African countries to respond to the pandemic.

To date a total of $61.5 million has been pledged for both the AU COVID-19 Response Fund and the Africa Centres for Disease Control and Prevention. 

It will take long to recover the economic loss due to coronavirus, and although we do not yet know the full impact of the pandemic, we are starting that recovery now.

I thank you. 


QUESTION 2 ON POSITIVE EVIDENCE IN RELATION TO DECISION TO INSTITUTE A NATION-WIDE LOCKDOWN

Honourable Members,

In determining the appropriate response to the global coronavirus pandemic, government has been informed by the advice of scientists, by the experiences of other countries and from the guidance of the World Health Organization and the Africa Centres for Disease Control and Prevention.

The decision to institute a nation-wide lockdown was informed, among other things, by epidemiological analyses based on the available evidence of the rate at which the number of coronavirus cases was increasing.

This provided modelled estimates of over 1 million infections at peak. 

Recently, the country’s Covid-19 Modelling Consortium has generated optimistic and pessimistic estimates of between 3.4 to 3.7 million cases by 1 November this year.

The initial estimates pointed to the need to act quickly and decisively before the epidemic curve reached what scientists call the ‘inflection’ point. 

The inflection point is when the curve changes from a slow and steady increase in cases to one with an exponential growth.

South Africa had an opportunity to act early before its inflection point had been reached. 

We made the decision to implement a lockdown when there were 274 confirmed cases in the country. 

At that time, scientists estimated that South Africa already had over 1,000 cases, many of which had not been identified yet, due to limited screening and stringent testing criteria.

By the time I announced the lockdown on Monday 23 March, the number of confirmed cases had risen to 402, and by the time the lockdown took effect on Friday 27 March there were 1,170 cases.

A prolonged delay in implementing stringent measures would have meant that South Africa would have missed the window of opportunity to achieve a significant flattening of the curve. This could have led to a runaway epidemic with potentially catastrophic consequences for our health care services.

In the three weeks before the nation-wide lockdown, the number of coronavirus cases was doubling every two days. 

During the course of the level 5 lockdown, cases were on average doubling only every 15 days. 

Since we began the easing of the lockdown, during alert levels 4 and 3, the doubling time has been around 12 days.

In other words, the lockdown enabled the country to start to flatten the curve, delaying community transmission for long enough to prepare our health facilities and implement public health responses.

I thank you.


QUESTION 3 ON MEASURES TAKEN TO EASE THE NATIONAL-LOCKDOWN 

Honourable Members,

As I indicated in the earlier reply, our response to the coronavirus pandemic has been informed by the advice of our scientists, the experiences of other countries and the guidance from bodies like the World Health Organization and the Africa Centres for Disease Control and Prevention.

Much of the scientific input we have received has come from the Ministerial Advisory Committee on COVID-19, which was established by the Minister of Health.

Through the course of the pandemic, the Ministerial Advisory Committee, which brings together scientists, clinicians and researchers from a range of relevant disciplines, has assisted government in various areas of the response.

The Committee helped develop the country’s eight-phase strategy, in which a strict lockdown was just one phase, with specific objectives and a finite timeframe.

In deciding on when to begin the gradual and systematic easing of the lockdown, government was guided by the views of the scientists, the experience of other countries and wide-ranging consultations.

It also took into account the economic and social disruption caused by the lockdown, and the devastating impact it was having on people’s incomes and livelihoods.

In providing guidance, the Ministerial Advisory Committee used the level of community transmission as the basis for determining the state of the pandemic in the country.

At that time, the proportion of coronavirus tests that were positive had been consistently low for a long time and had remained in a narrow range of 1.5% to 3.5% for several weeks in all parts of the country except in the Western Cape. 

In arriving at this decision, due consideration was given to the criteria suggested by the World Health Organization for countries to transition from lockdown to re-opening of normal social activities. 

These criteria are:

Firstly, that disease transmission is under control.

Secondly, that health systems are able to ‘detect, test, isolate and treat every case and trace every contact’.

Thirdly, that hot spot risks are minimised in vulnerable places, such as nursing homes.

Fourthly, that schools, workplaces and other essential places have established preventive measures.

Fifthly, that the risk of importing new cases ‘can be managed’.

Lastly, that communities are fully educated, engaged and empowered to live under a new normal.

In an advisory to the Minister, the Ministerial Advisory Committee noted that some of the WHO criteria may not be appropriate for South Africa. 

Unlike several other countries, South Africa deliberately implemented a lockdown early in the progression of the disease as a strategy to delay transmission. 

We did this knowing that we would not be able to bring transmission under control by the time we had to ease the lockdown, but that it would give us the time we needed to strengthen our health system and put a comprehensive public health response in place.

The WHO has supported South Africa in this approach.

In considering the transition from alert level 5 to alert level 4 and, subsequently, to alert leve 3, I engaged with numerous stakeholders including business, labour, community representatives, political party leaders, premiers, mayors, traditional leaders and the religious sector among others, as part of government’s consultation process.
 
As the National Coronavirus Command Council, we remain committeed to consult widely with diverse stakeholders in taking decisions that will both protect the lives of our people and support their livelihoods.

I thank you.


QUESTION 4 ON MEASSURES TO PUT TOWNSHIP AND RURAL ENTERPRISES AT THE CENTRE OF ECONOMIC GROWITH

Honourable Members,

Just before the coronavirus outbreak in South Africa, Cabinet had approved the Township and Rural Entrepreneurship Programme. 

This programme is aimed at putting township and rural enterprises at the centre of economic growth. 

According to research commissioned by the Department of Small Business Development, the informal sector has a central role in the South African economy as it accounts for 18% of total employment and contributes towards the livelihoods of millions of people. 

The pandemic has assisted the implementation of this critical intervention, which seeks to bring marginalised people and areas into the mainstream economy. 

As part of our package of responses to the pandemic, we have been providing financial and non-financial assistance to the informal sector to cushion workers from the economic effects of COVID-19.

We have also taken measures to support households that rely on income from informal businesses by topping up social grants over a six month period and introducing a special COVID-19 grant of R350 a month over six months for unemployed people. 

Financial assistance to informal businesses has taken the form of grants, loans and credit facilities that informal businesses can access to sustain their livelihoods. 

The non-financial interventions include business development support services that help informal businesses to improve their business management capabilities.

This will assist informal businesses, should they wish, to make the transition to micro, small and medium-sized businesses in the formal sector. 

This would make it easier for them to benefit from government incentives, SMME programmes and procurement opportunities.

The Department of Small Business Development has introduced programmes targeted at specific sub-sectors of the informal economy.

To cite some examples, over the medium term these programmes aim to support 100,000 spaza shops and general dealers, 50,000 artisanry businesses, 15,000 hairdressers, beauticians and other personal care businesses, 50,000 vegetable street vendors and butcheries, and 10,000 informal restaurants.

Other programmes include the Small Scale Automotive Aftermarket Support Scheme to support 5,000 informal businesses over 12 months, and the Bakeries and Confectioneries Support Programme, targeting 3,500 businesses over 12 months.

Some of these programmes have already been implemented and are gaining traction.

Through these programmes, which prioritise black-owned, youth-owned and female-owned SMMEs, thousands of jobs have been saved and a significant number of SMMEs have been kept in business. 

I thank you.


QUESTION 5 ON THE EFFECTIVENES OF CURRENT CHAPTER 9 INSTITUTION IN DEALING WITH CORRUPTION

Honourable Members,

There are sufficient law enforcement agencies to deal with incidents of corruption.

These include institutions like the National Prosecuting Authority, the Directorate for Priority Crime Investigation in the SAPS and the Special Investigating Unit.

The Office of the Auditor-General and the Financial Intelligence Centre also play important roles in detecting instances of corruption.

The Auditor-General will be taking additional measures, including proactive auditing, to ensure the proper use of COVID-19 funding.

We have also established the NPA’s Investigating Directorate to focus on corruption cases arising from the Zondo Commission of Inquiry into State Capture and other commissions.

We also have a progressive legislative framework for addressing the escalating number of investigations, prosecution and trial of serious forms of corruption. 

These include the Prevention of Organised Crime Act and the Prevention and Combating of Corrupt Activities Act.

I am advised that the Justice, Crime Prevention and Security Cluster is undertaking work to revamp the criminal justice system, which will include the strengthening of the governance arrangements, intelligence-driven and prosecution-led investigations and mechanisms for the recovery of ill-gotten proceeds.

We therefore take the view that the establishment of a new independent Chapter 9 institution to focus on grand corruption may not be necessary at this stage.

However, we should continue to consider all available options to ensure that we eradicate corruption across society.

I thank you.


QUESTION 6 ON MEASURES TO BE IMPLEMENTED TO ADDRESS THE KEY STRUCTURAL CONSTRAINTS IN THE ECONOMY 

Honourable Members,

Even before the coronavirus pandemic, South Africa’s economy has been experiencing low growth over a number of years.

Despite significant progress since the advent of democracy, our country remains characterised by high levels of poverty, inequality and unemployment. 

The pandemic has exposed some of the structural faultlines in our economy, including the vulnerability of small businesses and those in the informal economy. 

Therefore, as we repair the damage caused by the pandemic, we will be implementing measures to address the key structural constraints in the economy. 

These include the mismatch between skills produced and the new skills required in a 21st century economy, and the spatial patterns of development that keep millions of workers far away from workplaces.

We will also need to address the reality of a poorly-developed small and medium business sector within an economy that has large concentration of market share and ownership in too few hands.

We will need to provide access to capital for many young entrepreneurs, women-owned enterprises and black industrialists.

As we rebuild the economy after coronavirus, we will speed up structural reforms that can unleash enterprise and capitalise on the digital economy and the larger markets that are possible through the African Continental Free Trade Area.

Already, steps have been taken in a number of areas to address these challenges. 

These include the industry masterplans that have been developed in sectors such as automobile manufacturing, clothing and textiles, poultry production and the sugar industry.

They include the reforms in energy policy and the decision to release spectrum in the market; and the competition market inquiries that are beginning to have an impact on data prices, access to trading spaces and health care provision. 

If we are to achieve an inclusive economy, we need to deal with the historical injustices in relation to land ownership, access and use.

Expediting land reform for a more productive economy without weakening our fiscal position will require, among other things, a social compact between the state and private landowners on how to release more land. 

The initiative by Anglo American to donate land to the state is an indication of what is possible if we share a common vision as a country.

Another example is the PALS initiative in the Witzenberg valley, where commercial farmers have been working with local communities and farm workers to promote land reform.

Government is working with the agricultural industry to develop a sector plan, which will focus on growth areas such as the livestock, wool and grain industries. 

Recent auctions have highlighted livestock wealth among black farmers, which indicates that an inclusive, targeted initiative has the potential to transform the livestock value chain.

The release of state-owned land and post-settlement support has commenced. 

Over 100,000 hectares have already been allocated to successful beneficiaries, and the intention is to release all the remaining 700,000 hectares by the end of the financial year.

Transformation must be pursued with greater vigour so that we have more equitable outcomes and a greater number of jobs. 

Above all, building a more inclusive economy will enhance longer-term growth, productivity and development for all South Africans

I thank you.

Date: 

Thursday, June 18, 2020 - 17:45

Tags: 

President Cyril Ramaphosa