South Africa’s President has announced an R500 billion stimulus package. This stimulus package will provide funds to fight the virus, social protection to vulnerable families, relief for workers and companies affected by the pandemic, and targeted fiscal and financial support measures. R20 billion will be set aside for the health sector, while R50 billion will be distributed as grants for social relief like child and caregiver grants.

The money will be derived from shifting budgetary plans, along with borrowing from local and international institutions. This includes loans from multilateral lenders like the World Bank, International Monetary Fund (IMF), BRICS New Development Bank, and the African Development Bank. Through the African Union, Africa’s leaders have already asked the international community for $100 billion to help the continent fight the virus. The IMF has since granted $500 million of debt-relief funds for some of Africa’s poorest nations, giving hope to the rest.

South Africa will also provide new tax support like:

Increasing the expanded employment tax incentive amount from R500/month to R750/month
A four-month holiday for skills development levy contributions to help assist businesses with cash flow
Postponing payment of excise taxes on tobacco products and alcoholic beverages
Granting additional time for filing and paying carbon tax liabilities
A postponement of planned corporate taxes
Fast-tracking of value-added (VAT) refunds

Companies will also be given access to the government's R200-billion loan guarantee scheme.

"We are resolved not merely to return our economy to where it was before the coronavirus, but to forge a new economy in a new global reality. Our economic strategy going forward will require a new social compact among all role players — business, labour, community and government — to restructure the economy and achieve inclusive growth," President Cyril Ramaphosa stated in an address to the nation.

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