Written by 20:07 Statements

The R500 Billion Stimulus Package Announced By President Ramaphosa

DATE: 23 April 2020

The Black Business Council (BBC) appreciates the economic and social measures announced by President Ramaphosa, which amount to around 10% of the Gross Domestic Product (GDP), to drive the recovery of our economy. The President has demonstrated bold leadership under very difficult and unprecedented circumstances facing the country. The economy was bleeding jobs, had rising inequality and poverty even before the Covid-19 pandemic. The downgrade by Moody’s to junk status did not help the situation either.

Additional support for Small, Medium and Micro-sized Enterprises (SMMEs)

We raised the insufficiency of the previous (R500m) financial relief and support with the President of the Republic at The National Economic Development and Labour Council (Nedlac). As such, we welcome the R2 billion extra support for Spaza shops and SMMEs. This will go a long way in providing relief to the self-employed and other vulnerable SMMEs sectors of our economy. We are working closely with the Minister of Small Business Development to ensure that the benefits reach the intended beneficiaries.

Corruption and fraudulent conduct by those in power

We have noted with shock, acts of corruption and criminality regarding the food parcels meant for the poor and vulnerable of the country. Corruption erodes the people’s trust in government and undermines the social compact and contract that is in existence and has a disproportionate impact on the underprivileged and most defenceless in our society. We call on all citizens to be vigilant at all times and to report perpetrators to the law enforcement agencies. The harshest punishment should be meted against those who are found guilty of these actions.

Socio-Economic Transformation

The BBC is fully aware of and acknowledges that the country is facing a crisis of unprecedented proportions. We also note that the Constitution of the Republic of South Africa and other laws are not suspended during this period. As such, the Broad-Based Black Economic Empowerment (B-BBEE) remains law and in place and as such, should not be undermined in haste.

We need to use the opportunities provided by the crisis to deepen our socio-economic transformation, in order to accelerate the participation of black business in the mainstream economy, instead of reversing some of the gains made. To this end, we are fully behind the Minister of Tourism, Ms Mmamoloko Kubayi-Ngubane in her efforts to transform the tourism sector.

We call on both big business and government to ensure that this period is used to procure goods and services from SMMEs as well as black, youth and women-owned companies.

R200 billion loan-guarantee programme

We welcome the loan-guarantee scheme to help banks extend credit to businesses and support the economy in recovering from the coronavirus pandemic. We, however, caution the banks not to misuse this opportunity by including and adding their non-performing loans, that have nothing to do with covid-19, to the equation. In addition, we are of the view that other Licenced Financial Service Providers should also be given an opportunity to participate in this economic opportunity.

Localisation and reindustrialisation of the economy post Covid-19

SA has adopted an importation strategy that has unfortunately promoted job creation in other countries, mainly India and China. Now the importation preference strategy has backfired as we scramble to source basic medicines and medical consumables such as paracetamol, masks, gloves and swabs for conducting tests, personal protective equipment (PPE) and other basic commodities that are not complicated to manufacture locally. Covid-19 has revealed to us that we do not have a secure supply of the medicines that are essential to the nation’s livelihood, which is premised on strong, sustainable local manufacturing.

We call for the urgent development of a localisation and reindustrialisation plan for South African which should be implemented as soon as possible to safeguard National Security.

Loans from International Monetary Fund (IMF), World Bank and BRICS Bank

We need to be assured that any loan procured on behalf of South Africa should not seek to undermine and compromise the sovereignty of the country. In addition, we are against any attempt to utilise any portion of the loan/s for regular operational expenditure of government.

The past few weeks have been characterised by SOLIDARITY amongst all sectors of society (Business, Labour, Government and Civil Society). We call upon each of us, to continue in the same spirit of unity moving forward, as we rebuild the economy.

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