On 21 April President Cyril Ramaphosa addressed the nation to announce the creation of a R500 billion recovery and stimulus package to help South Africa out of its economic crisis, worsened by the COVID-19 pandemic. Sarah-Leah Pimentel shares her initial reaction to the president’s plan, her concerns over a lack of cooperation and goodwill, and offers ideas about how ordinary citizens can also do their part to rebuild the nation.
I listened to my president on 21 April with mixed feelings.
His calm and measured address filled me with confidence that we are being led by a man who has listened to his advisors, examined the information, weighed up the options, and articulated a strategy that is as practical as it can possibly be in times of extreme confusion and an uncertain future.
But I also felt an immense amount of anxiety. No matter how much money you throw at this problem of economic recovery, it’s never going to be enough. We are coming from a very weak economic base to begin with. The challenges, which were enormous before, now feel almost insurmountable.
A bottomless bucket
The R500 billion that Cyril Ramaphosa is proposing for the economic relief plan will be allocated to different sectors and activities, and his vision is laudable. My only hope is that it generate enough momentum to jumpstart the national economy and that, through it, we can create a better society than the one we had before.
However, before COVID-19 arrived, we were already geared for a growth rate of less than 1% for 2020. Investor confidence was low. Unemployment was high. Political trust was weak. An economic recovery package can help, but not fix what has been broken for 25 years. Reliant as we are on the global economy, is it even realistic to believe that we can rebuild an economy when the world is headed for its worst economic crisis in nearly a century?
For illustrative purposes only, without allocating the economic recovery funding to the various stages and stimulus strategies, I did a simple back-of-the-envelope calculation to get a sense of how much R500 billion really is in a population of 59 million, where nearly 40% of the working age population is essentially unemployed. If we were to divide the R500 billion into equal quantities for each South African citizen. Each citizen would only be allocated R8474. That is the national minimum wage for less than three months.
Of course, we know that is not even the real value of what citizens will be entitled to receive. We heard the more realistic values. We heard that for six months, R350 per month will go to those who are unemployed and do not receive UIF or a social grant. What does that even buy? How many mouths will need to be fed with that R350?
The R200 billion loan guarantee scheme will reportedly assist up to 700,000 businesses to pay their bills, keep their employees salaried, and (hopefully) jumpstart their activities. Government will provide more details on this stimulus package in the coming days.
READ — Grant increases, food vouchers in R500bn stimulus package, 21 April 2020 //
But another crude calculation shows that if this amount were to be equally divided by businesses in distress, it would provide operational costs of R285,714 per business. Divide that by six months. You get R47,619. Say you have 100 employees on your staff and all you’re doing is paying salaries. Each employee will be entitled to R476 per month.
And what about the homeless, undocumented migrants, those who have slipped through the system? Where will they find help? Already the food lines are increasing. How much worse will this situation become in one, two, five months from now?
Let us move away from the hard numbers and look at other factors that could derail Ramaphosa’s plan. We have already seen how administrators in the various municipalities are stealing food out of the mouths of this country’s poorest citizens. The President called them “unscrupulous” and promised that they will face the “full might of the law.”
No matter what he says, the sycophants will express their support and commitment to the economic recovery programme to the president’s face, but behind his back, many will look for loopholes and backdoors to siphon off much-needed funding to themselves, their friends and family. In many places, access to these funds will not be given to the most deserving and needy, but to those who are well-connected individuals who serve in the country’s municipalities and provinces.
It is hoped that the use of technology that the president mentioned can truly be leveraged to eliminate the possibility for corruption and theft.
The tenuous social compact
The President speaks to us about a “social compact,” calling on business, labour, community, and government to “restructure the economy and achieve inclusive growth.” He envisions a true “radical economic transformation” that goes far beyond the usual ANC political rhetoric. It is a vision of rebuilding a society from the ashes of COVID-19 that is more equitable and based on “fairness, empowerment, justice and equality.”
I want to believe him. I really do. I find it somewhat reassuring that the president’s plan met with little resistance from opposition parties. However, I wonder if many of our ministers, never mind lower-order politicians and leaders know the meaning of fairness, justice, or empowerment.
READ — South Africa’s Covid-19 economic stimulus plan — opportunity out of crisis, 21 April 2020 // Daily Maverick
We just have to look at how police and military officers have gone rogue in enforcing the lockdown, often at the cost of human life. As this crisis worsens, people will become more desperate and the defence forces will become increasingly fierce. We’ve watched the hot chicken and cigarette police fall over themselves to introduce additional measures that are pitiless and meaningless, just to show that they have the power to control our lives.
The social turmoil of poverty and the ongoing distrust of the authorities could very well erode what goodwill there may still be to increase cooperation between civil society and government. If every man and woman is going to be engaged in a battle for their lives as hunger and desperation increase, how much human goodness will be left for working together, for cooperating, for building the country we all dream of living in?
How comforting is it, really, to learn of the deployment of a further 70,000 troops, meaning that we’ll have more soldiers on the ground than at any time since the advent of democracy in South Africa? It can only mean that the President and his team expect resistance from the people. Open battles on the streets of South Africa will make mutual cooperation far harder.
Wherein lies our responsibility?
Most of this reflection has been sobering. It’s meant to be. I want everyone who reads this to be filled with a sense of the enormity of the task that has been placed into our collective hands.
In the face of such need, what can each of us do as individuals? For most, the only thing might be to stay at home as far as possible and reduce the chances of this virus lingering endlessly and continue to prevent our ability to get the economy going again. Others can offer only their willing service: to hand out warm cups of soup at the food lines, cook a pot of stew, or perhaps provide a few tins or bags of rice to feed the hungry. We cannot save everyone, but we can help one person.
Some, very few of us, may be in a position to do more. This is something has been sitting with me since the middle of Lent. I have been blessed to continue working during this time and at least in the immediate future, I will probably continue to receive some income. My investments look terrible, and for now, I prefer to not even look at what I have lost! They’re also not going to recover any time soon. Putting money into them might be the same as throwing it away.
This is clearly not a time for making money. I know that some may be tempted and have opportunity to make fortunes as others are losing theirs. But I truly believe that there can be no other response right now, than to do whatever is within the power and the means of each one of us to help.
Without intending this is as boast, I sat down with my finances and looked at the bills that need paying, the money I’m not spending because there is nowhere to go and nothing to do, and the amount that I would ordinarily put into my investments. From this I have set aside my own “economic package” and have earmarked organizations that are providing assistance to those who (for various reasons) will never receive a cent from the government’s recovery program and have set up monthly payments for them.
I am not doing anything extraordinary and certainly want no praise. It is simply my Christian and civic duty at this time to do what I can, no matter how small, to help us all have a fighting chance of getting through the tragedy that is about to hit this nation.
I echo my President when he says: “We shall recover. We shall overcome.” And eventually “we shall prosper.” But only if each of us is prepared to give something, not from our surplus but from what we would use for ourselves, as did the widow of the Gospels with her two coins.
And beyond all human intervention, truly, “may God bless South Africa and protect her people.”