R36 billion relief to deal with Covid-19, unrest impact

By Reuters Time of article published Jul 28, 2021

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Cape Town - South Africa plans to offer about R 36 billion in support to businesses and individuals affected by Covid-19 restrictions and recent unrest, the finance ministry said on Wednesday.

The recent unrest in South Africa probably caused destruction worth some R50 billion rand, finance minister Tito Mboweni said in a media briefing.

The package will be funded by better government revenue collection and by shifting around some spending, senior officials told a news conference, addressing measures announced by President Cyril Ramaphosa on Sunday.

The country has been hard hit in the past turbulent weeks after the economic effects of the Covid-19 pandemic were compounded by unrest in parts of Gauteng and KwaZulu-Natal.

Soldiers were deployed after the rioting in the two provinces claimed 337 lives as of last count last week, the government said.

More than 200 businesses including factories, warehouses, malls, major retail stores, shops and factories were destroyed by violent unrest earlier this month. Disgruntled citizens took to the streets after former president Jacob Zuma was jailed and the subsequent violence government has categorised as an attempted insurrection.

Shelves were emptied while major roads including roads including the N3, N2 and M7 were blockaded. More than 30 trucks were destroyed on the N3 near Mooiriver. Operations and economic activity in both provinces were brought to a grinding halt.

Mboweni said eThekwini accounted for almost a third of the overall damage.

“For the life of me, I cannot understand how burning a shopping centre resolves anything at all. It doesn’t, how burning trucks at the Mooiriver Plaza resolves anything, it doesn’t.

“The estimates are about R50 billion but if you understand how economics functions - there is the immediate damage of R50 billion but the multiplier effects are huge,” he added.

Government further vowed to extend support to uninsured businesses that were affected by the violence.

The South African Special Risks Insurance Association (Sasria) has committed to expedite payments of valid claims from the unrest and is working together with private insurers to ensure that assessments are completed timeously.

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