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COVID-19: SA taxi industry to get R1bn bailout
Transport minister Fikile Mbalula announced that government will give the taxi industry a once-off R1 billion ‘ex gratia’ payment to help buffer it against the lock-down. Mbalula adds that government is still to debate changing regulations to allow debating changes to the country’s lock-down regulation to allow for 100 per cent capacity in taxis. Maroba Maduma, Communications Executive at SA Taxi joins CNBC Africa for more.
Fri, 19 Jun 2020 16:20:57 GMT
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AI Generated Summary
- The South African taxi industry receives a R1 billion 'ex gratia' payment from the government as COVID-19 financial relief.
- Challenges persist regarding the adequacy of the relief funds and the need for additional support from the government and private sector.
- SA Taxi explores innovative solutions, such as low-interest loans, to provide financial assistance to struggling taxi operators and owners.
The South African taxi industry, a vital component of the country's economy, has been hit hard by the COVID-19 pandemic and subsequent lockdown measures. Transport Minister Fikile Mbalula recently announced a R1 billion 'ex gratia' payment to assist the industry in navigating these turbulent times. However, questions loom over whether this relief will be sufficient to address the financial strain faced by taxi operators and owners. Maroba Maduma, Communications Executive at SA Taxi, shed light on the challenges and possible solutions in a recent interview with CNBC Africa.
Maduma expressed support for the government's financial assistance but also raised concerns about the adequacy of the funds allocated. He noted that while the relief is a step in the right direction, more substantial support from both the government and the private sector is necessary. SA Taxi has been proactive in providing relief to its client base, offering repayment extensions and increased installment options. Despite these efforts, the industry continues to grapple with significant financial impacts, with cash flows taking a hit.
One of the key issues discussed was the possibility of extending the relief measures beyond the initial three months. Maduma explained that extending the relief would pose challenges, including potential job losses within SA Taxi. Instead, the company has proposed collaborating with the banking sector to provide low-interest loans to small business owners in the taxi industry, leveraging government guarantees to offer much-needed financial support.
Another pressing concern is the number of taxi owners struggling to meet their financial obligations. Maduma highlighted that while many clients have taken advantage of the relief options, some continue to make payments. SA Taxi faces the delicate task of balancing financial sustainability with supporting clients during these difficult times. Additionally, Maduma addressed the issue of high-interest rates, noting that the company operates as a development credit provider and serves a high-risk client base, which can impact interest rates. Despite this, efforts have been made to reduce interest rates and expand access to finance.
As discussions continue on the future of the taxi industry and the implementation of support measures, stakeholders must work together to ensure the sector's resilience and sustainability. The challenges faced by the industry underscore the need for strategic interventions and collaborative efforts to navigate the evolving financial landscape in a post-pandemic world.
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