South Africa announces $26 billion to help struggling nation

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People queue on a soccer field to be screened and tested for COVID-19 at Lenasia South, south Johannesburg, South Africa, Tuesday, April 21, 2020, during a campaign aimed to combat the spread of Coronavirus. (AP Photo/Themba Hadebe)

JOHANNESBURG – South Africa’s president on Tuesday announced an “extraordinary budget” of $500 billion rand ($26 billion) to address the huge socioeconomic effects of the coronavirus pandemic, saying that “our country and the world we live in will never be the same again."

President Cyril Ramaphosa in a national address said the “historic” amount is roughly 10% of the GDP of sub-Saharan Africa's most developed country. The top priorities are combating the virus and relieving “hunger and social distress” as millions of South Africans struggle to survive under lockdown, he said.

One-tenth of the new special budget will go toward the country’s most vulnerable people over the next six months in one of the world’s most unequal nations. The pandemic has exacerbated inequalities, Ramaphosa said.

“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,” he said, adding that “our new economy must be founded on fairness, empowerment, justice and equality.”

Poverty and food insecurity have deepened dramatically since the lockdown began on March 27, Ramaphosa said, and he acknowledged that government food distribution has been unable to meet the “huge need.” Some 250,000 food parcels will be distributed over the next two weeks, said the president, who strongly condemned reports of officials diverting aid.

Local media reports have described in stark detail how families are trying to practice social distancing in crowded shacks in informal settlements. Some communities have been in the dark for weeks or months, unable to meet electricity payments, Clean water often comes from shared community taps, if at all.

Ramaphosa said other priorities for the new budget include the protection of companies and workers in a country where the economy had been struggling even before the pandemic. The lockdown has halted most economic activity, with only essential service workers in sectors like food and healthcare allowed to operate.

A large part of the workforce is in the low-income informal sector. Ramaphosa announced special increases to the monthly social grants upon which about 16 million of South Africa’s 57 million people rely for survival.