By Lehlohonolo Lehana.
Finance minister Tito Mboweni says Treasury will need at least R27 billion to reinstate the R350 Covid-19 Social Relief of Distress (SRD) grant.
In a media briefing on Wednesday, Mboweni said that this amount will see the grant extended until the end of March 2022.
While the cost is high, especially with the added burden of the recent looting and unrest, Mboweni said that the extended grant was necessary.
“This R350 no matter how small it might be goes a long way in assisting our people. It will cost R27 billion, which we have to find in the system,” he said. “We are in a position that we can afford this R27 billion up to the end of March.”
Mboweni added that Treasury projections now show that South Africa is likely to only return to pre-covid economic levels by 2023, with an estimated R15 billion in damage caused by looting and unrest in Durban in eThekwini alone.
President Cyril Ramaphosa announced the reintroduction of the R350 Social Relief of Distress (SRD) grant on Sunday (25 July) as part of the government’s relief measures around Covid-19 and the recent social unrest.
While the grant is set to remain in place until March 2022, the president has also recently said that the government is considering the feasibility of introducing a permanent basic income grant.
Mboweni said that this did not add to positive value in the economy, which was expected to rebound 4.2 percent after contracting by 7 percent in 2020.
“The impact of the restrictions occasioned by Covid-19 has had serious negative implications for the economy,” Mboweni said.
Treasury director-general Dondo Mogajane said there was a R36bn package available to provide financial support for all spheres of society.
Mogajane said Sasria would be allocated about R3.9 billion “immediately” to ensure that in need businesses were supported.
Further to this, employment tax incentives of about R5 billion were releasing back to businesses in the form of their employment initiatives.
Mboweni added that Sasria would immediately commence paying out insurance claims “in order to assist those business to come back to life”.
“Sasria is a very special mechanism which was developed, unfortunately – but now we’re benefiting from it – during the apartheid periods to cover for riots, destruction of property and so on.”
Together with other insurance companies, the Minister said Sasria was speeding up the assessment process, the damage assessment process so that they can be able to assist companies to come back to life.