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A much-anticipated Cabinet meeting that sat via teleconference on Wednesday to plan SA’s response to the Covid-19 coronavirus ended inconclusively with no resolutions reached.
The meeting was expected to finalise an economic recovery plan for South Africa as the extended lockdown threatens to plunge the country’s ailing economy deeper into recession.
However, all proposals made on the day by the five clusters – the economic sectors, investment, employment and infrastructure development; governance, state capacity and institutional development; social protection, community and human development; international cooperation, trade and security; and the justice, crime prevention and security clusters – have been put off until later.
The clusters have been asked to work together to produce one consolidated document to serve before the next Cabinet meeting due to take place on Monday.
While the details of all the proposals were not disclosed, City Press understands finance minister Tito Mboweni took two crucial proposals, aimed at addressing income support for the most vulnerable and supporting firms under distress, to the meeting.
The first proposal presented by Mboweni was requesting a loan guarantee backed by the Treasury to enable banks to extend new credit to financial strained firms.
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Mboweni is understood to have also presented an income support proposal that was endorsed by labour and organised business in various forms.The proposal was that social welfare grants be increased by R500 for the next three months to assist those dependent on them throughout the lockdown period.
Although the Cabinet meeting was expected to shed some light on what relief measures would be added to initiatives that have already been announced by the state for the initial 21-day lockdown, Cabinet members concluded that they needed more time to digest all the proposals presented on the day.
“Cabinet resolved that more discussions and consultations are required before the final consolidated plan is approved to be shared with the nation,” acting Cabinet spokesperson Phumla Williams said last night.
She clarified that “the presentations were a culmination of the work done by all the Cabinet clusters, focusing on the country’s economic recovery as a consequence of the Covid-19 pandemic” and the recent downgrading of SA by rating agencies Moody’s Investors Service and Fitch has been taken into account.
When President Cyril Ramaphosa addressed the nation last week, he promised that Cabinet would “give details of an economic plan” for the country as the nationwide lockdown was extended for an additional two weeks until the end of the month.
“Cabinet will be developing a comprehensive package of urgent economic measures to respond both to the immediate crises and to the severe economic challenges that we must confront in the months ahead,” said Ramaphosa.
Just a day before the sitting of Parliament Public Enterprises Minister Pravin Gordhan finally drew a line in the sand and turned down a request from SAA’s business rescue practitioners for an additional R10-billion funding.
Williams confirmed through the statement that “Cabinet has also directed ... Gordhan to prepare an updated report on SAA, for discussion at the upcoming meeting [on April 20]”.
SAA needs R7.7 billion to fund the next stage of business rescue. It is expected the unavailability of funding will lead to its “structured wind-down”.
While Cabinet finalises the country’s economic recovery plan, the Reserve Bank has already increased liquidity in financial markets, eased interest rates and put in place measures that will assist commercial banks to offer forbearance, measures that will hopefully be enough for businesses to ride out the tide over the lockdown period.
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