By Andrew Lapping, Chief Investment Officer at Allan Gray



As South Africans, we want our country to prosper and the quality of life for all those living within our borders to improve. Millions live in total poverty and rely on family or intermittent work to get by: life is tough, and often short, as malnutrition and hardship take their toll. The most effective way to lift people out of poverty and improve quality of life is through education and economic growth.&nbsp;



I am concerned that our government’s lockdown approach and the subsequent economic hardship inflicted on our people will cost more lives than it can save. I realise this is a controversial statement in a context where people are very fearful and understandably concerned about their health and the wellbeing of their families. An effective government must make difficult decisions that involve trade-offs and cost-benefit analysis. I am not saying we should trade lives for economic growth; I am saying we must consider how we can save as many lives as possible and give better lives to as many South Africans as possible with our limited resources.&nbsp;



President Cyril Ramaphosa’s initial lockdown decision was justified to buy time in order to gather our health resources and prepare our hospitals. It was never meant to be a strategy to eliminate the COVID-19 virus – this is an impossibility. The idea behind lockdown is that the same number of people get ill, but the infections are spread over a longer time in an effort not to overwhelm the health system. Our government’s lockdown strategy has morphed into something else entirely.&nbsp;



As new information emerges, it seems the virus mortality rate is substantially less than many feared, and many of the more alarmist predictions that led to lockdowns across the globe have proven to be flawed. The government must absorb this information, particularly given the youthful South African population.



There are two important questions:



<ul><li>How many COVID-19 fatalities can be avoided through the lockdown?</li><li>What is the economic, and therefore human, cost of the lockdown?&nbsp;</li></ul>



I will not go into detail on the potential number of lives saved by the lockdown. There is a great deal of information available* that indicates the lives saved by this strategy will be minimal unless the lockdown means the number of infections can be supressed until a vaccine becomes available. Data indicates the mortality rate for those below 70 years of age is less than 0.2%; only 2.9% of South Africa’s population is older than 70. Furthermore, lockdowns or a lack thereof, seem to make little difference to the total number of cases a country experiences. It sounds tragic and defeatist, but it is not possible to make the virus disappear through lockdown, particularly in a country like South Africa.&nbsp;



Economic and human costs are two sides of the same coin. Studies indicate that mortality rates double with job losses. A smaller economy means fewer resources to allocate to healthcare and education in future. National Treasury thinks up to seven million people could lose their jobs. This could lead to tens of thousands of additional deaths.&nbsp;



The stimulus package outlined by the government is R500bn. SARS thinks tax collection could fall by R250bn this year as a result of the shutdown.&nbsp;Given government reallocations, this means additional debt of&nbsp;approximately R500bn in a single year. The economic damage will linger, tax collections are unlikely to recover to previous levels for years to come. The&nbsp;R50bn interest bill on this additional debt burden means&nbsp;R50bn less to spend on education, healthcare or other services – not just in 2020, but in perpetuity.&nbsp;



An extreme worst-case scenario for South Africa is 150&nbsp;000 COVID-19 deaths (most models indicate worst-case scenarios of 50 000). This is based on 50% of people contracting the virus with a 0.5% fatality rate. (A more likely worst case is a 0.2% mortality rate of 50% of the population, which is 60 000). This is a huge number of deaths and a great tragedy. Let’s assume the lockdown manages to reduce the number of fatalities by 50% by supressing the illness until a vaccine is discovered: This would be an incredible success. 75 000 lives would be saved. The direct cost per life saved in this scenario is R6.6 million; indirect costs will be far greater. I know this puts a price on human life but, unfortunately, this is what government has to do every day when allocating resources. On&nbsp; the other end of the spectrum, if the disease can’t be stopped, and a vaccine is not discovered, then almost no lives will be saved from COVID, but we will have destroyed the economy, increased government debt by R500bn, and lost a great number of lives through higher mortality not related to COVID. South Africa’s 2020 budget called for healthcare spending of R229bn and police expenditure of R221bn: small amounts in comparison.



Sadly, because South Africa is a poor country, we have a very high mortality rate, and therefore low life expectancy. 410 000 South Africans die from natural causes each year, including 37 000 people from TB and 32 000 from diabetes. In addition, 15 000 die in road accidents and 21 000 are murdered. These deaths are equally tragic and perhaps even more so as they are often preventable.&nbsp;



Unlike Europe, South Africa has a limited social security net and an informal economy. Many people have no savings and have lost their livelihood with the lockdown. Hunger is an immediate reality. Malnourished children are disadvantaged for the remainder of their lives due to stunting. The government provides a child grant, but there are millions of immigrant children who have no access to this grant.&nbsp;



Just as economic growth and prosperity save lives, economic destruction and poverty cost lives.&nbsp;



So why am I writing this now? Firstly, every week the lockdown continues, the economic cost compounds. Since the lockdown was enacted six weeks ago, I have urged government to consider the full picture, including the human and economic costs of their decisions, and I have provided them with balanced data. I have detailed how this data indicates the lockdown strategy is tragically flawed. We can no longer afford to blame “the virus”, when the vast majority of the job losses and suffering is the consequence of a strategy that has not fully accounted for the human cost of the lockdown on the economy. I hope that in making this commentary I am contributing to a heightened awareness of the issues, not emotion, underpinning this discourse.



Secondly, it is to reiterate how we think about managing your portfolios against this backdrop. We all have our views on what is the right or wrong strategy for government. However, most importantly for us as investors, we must deal with the situation as it is, and invest your funds accordingly to protect capital and maximise long-term returns.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

COVID-19: South Africa eases lockdown to revive battered economy

Op-Ed: Counting the economic cost of South Africa’s lockdown

In order to help <a href="https://www.cnbcafrica.com/coronavirus/2020/04/25/these-are-the-sectors-sa-is-considering-reopening-in-phase-4/">small and medium enterprises</a>, support the <a href="https://www.cnbcafrica.com/videos/2020/04/24/sa-economy-to-begin-a-gradual-reopening-on-1-may/">economy</a> and save jobs, the South African Reserve Bank (SARB) and the National Treasury are partnering with members of the Banking Association South Africa (BASA) to roll out a <a href="https://www.cnbcafrica.com/videos/2020/04/24/is-r800bn-stimulus-enough-for-markets/">R200 billion Covid-19 loan scheme</a>.



The scheme will allow qualifying <a href="https://www.cnbcafrica.com/article/2020/04/28/how-10000-covid-19-hit-companies-blundered-and-missed-out-on-millions/">businesses</a> to apply for loan funding from their primary bank for three months of operational costs, such as salaries, rent and supplier payments.



The statement below provides more details:



Covid-19 Loan Scheme for Small and Medium Enterprises



The R200 billion Covid-19 loan scheme is the outcome of the South African Reserve Bank (SARB) and the National Treasury partnering with members of the Banking Association South Africa (BASA) to help small and medium enterprises, support the economy and save jobs. The scheme will allow qualifying businesses to apply for loan funding from their primary bank for three months of operational costs, such as salaries, rent and supplier payments. All loans will be subject to bank credit approvals.



The Covid-19 loan scheme is a special credit facility that is being disbursed on behalf of SARB and National Treasury, using the infrastructure of the banking industry. Risk-sharing mechanisms in the scheme balance the need for government to support qualifying businesses, with ensuring the continued safety and soundness of the banking system. Similar schemes have been rolled out in over 50 countries in recent weeks.



Funding for these Covid-19 loans will be provided to banks by the SARB through a special financing mechanism. Any losses on the loans will first be offset against any margins earned on a bank’s portfolio of Covid-19 loans. Losses thereafter will be offset against a guarantee fee payable to the National Treasury by banks. Any further losses thereafter will be shared, with the first six percent being absorbed by the banks and the net balance absorbed by the National Treasury. Each bank will sign a bilateral agreement with the SARB, covering their participation in the scheme. The SARB will in turn contract with the National Treasury.



The scheme – which will start with an initial R100 billion &#8211; will be launched as soon as all the necessary legal agreements are in place. All parties are working around the clock to implement the scheme as quickly as possible after these agreements are finalised. While the finer details of the Covid-19 loan scheme and the related application process are still being finalised, the following principles will apply:



<ul><li>The Covid-19 loan scheme is a commercial arrangement and requires a credit application process, through which banks must evaluate if the business will likely be able to service all its commitments after the pandemic and lockdown. Banks are not obliged to extend Covid-19 loans and business owners may be required to sign surety.</li></ul>



<ul><li>The size of the Covid-19 loan will be calculated on the three-month funding requirement of certain operating expenses of the business, as approved by the bank, to be disbursed in monthly tranches.</li></ul>



<ul><li>Banks will not profit from the provision of the SARB guarantee. However, the administrative cost of facilitating the loans and the cost of capital will be recovered.</li></ul>



<ul><li>In the event of default, the Covid-19 loan would be subordinated to all other creditor claims.</li></ul>



<ul><li>The repayment of shareholder loans or dividends, using these funds, is expressly prohibited.</li></ul>



To qualify for the standardised Covid-19 loan, businesses, including sole proprietors, must inter alia:



<ul><li>Have a turnover under R300 million per annum</li></ul>



<ul><li>Be in good standing with their bank, prior to the onset of the Covid-19 pandemic</li></ul>



<ul><li>Be registered with the tax authority</li></ul>



<ul><li>Have insufficient normal borrowing capacity to fully fund its monthly operating expenses</li></ul>



<ul><li>Be adversely impacted by the lockdown.</li></ul>



Companies that may qualify for a Covid-19 loan, are advised to contact their primary bank. The launch date of the scheme and further details are expected to be announced shortly.



During the initial phases of the scheme, some processing backlogs will be inevitable. Banks undertake to work though these as quickly as possible and ask clients to be understanding of the challenges our staff have operating in the lockdown.



The R800 billion economic relief and stimulus package announced by President Cyril Ramaphosa and the Minister of Finance, Tito Mboweni, is an urgent and necessary part of saving lives and livelihoods, as the country unites to curb the pandemic. It will do much to alleviate poverty, hunger and uncertainty in our communities.



As important as they are, these emergency measures are not a sustainable solution to the devastating social and economic damage caused by the pandemic. We call on the President to urgently implement the ‘third phase’ of his economic recovery strategy: infrastructure development, structural reforms and sustainable transformation, to kickstart inclusive economic growth, create jobs and boost consumer and investor confidence. We need to rebuild a new and better economy for all South Africans. We hope these measures will be reflected in the extraordinary budget, which is yet to be announced. It is essential for both lives and livelihoods that we safely and fully reopen the economy as soon as possible.



Issued on behalf of The Banking Association South Africa



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

ArcelorMittal South Africa fined R3.64 million over hydrogen sulfide emissions

How SA’s R200bn Covid-19 loan scheme for small businesses works

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South Africa&#8217;s President Cyril Ramaphosa, in his capacity as AU chair, recently chaired a virtual summit of the continental block in light of developments around COVID-19.

How the AU plans to cushion Africa from COVID-19 crisis

On Thursday South Africa&#8217;s President Cyril Ramaphosa said there would be a <a href="https://www.cnbcafrica.com/coronavirus/2020/04/23/sa-to-phase-out-lockdown-these-are-the-details/">gradual phasing out of lockdown</a>, which was <a href="https://www.cnbcafrica.com/news/2020/03/23/breaking-nationwide-lockdown-announced-in-south-africa/">implemented in March</a> to contain the rapid spread of COVID-19. Starting on the 1st of May the country will move from phase 5 to phase 4, here is a list of industries the country will reopen in the various phases, subject to change after consultation with business, labour and civil society: <a href="https://www.cnbcafrica.com/wp-content/uploads/2020/04/2020-04-25-Permitted-goods-services-and-movement-Public-Version.pdf">https://www.cnbcafrica.com/wp-content/uploads/2020/04/2020-04-25-Permitted-goods-services-and-movement-Public-Version.pdf</a>

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These are the sectors SA is considering reopening in phase 4

South Africa&#8217;s President Cyril Ramaphosa on Thursday evening announced the gradual phasing out of the country&#8217;s <a href="https://www.cnbcafrica.com/coronavirus/2020/04/09/sa-extends-lockdown-by-two-weeks-until-end-april/">35-day lockdown</a> based on five-phases.



In his address to the nation Ramaphosa said the country is currently on phase five. 



He said from Friday 1st May the country will move to phase four. 



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&#8220;When we move to phase four our borders will remain closed to international travel, except for the repatriation of South African nationals and foreign citizens,&#8221; he said. Adding that no travel will be allowed between provinces except for the transportation of goods and exceptional circumstances such as funerals.



READ: <a href="https://www.cnbcafrica.com/coronavirus/2020/04/21/covid-19-sa-announces-r500bn-stimulus-package-about-10-of-gdp/">COVID-19: SA announces R500bn stimulus package; about 10% of GDP</a>



In phase four:



<ul><li>People will be able to exercise under strict conditions.</li><li>The elderly and those with underlying conditions must stay at home.</li><li>The selling of cigarettes will resume. </li><li>Bars, shebeens, conference and convention centres, entertainment venues, cinemas, theatres, and concerts will remain closed.</li><li>Concerts, sporting events, and religious, cultural and social gatherings will not be allowed until it is deemed safe for them to continue.</li></ul>



Ramaphosa added the country&#8217;s ministers will announce which industries will be impacted by phase four. 



Businesses that will be allowed to resume operations will need to do so in a phased manner, first preparing the workplace for a return to operations, followed by the return of the workforce in batches of no more than one-third, he said.



For more on COVID-19 in Africa visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>



The relevant ministers will provide details on the phased reopening of schools, Ramaphosa added. 



See below for his full statement&#8230;



STATEMENT BY PRESIDENT CYRIL RAMAPHOSA ON SOUTH AFRICA’S RESPONSE TO THE CORONAVIRUS PANDEMIC, UNION BUILDINGS, TSHWANE



My Fellow South Africans,



It has been exactly seven weeks since the first case of the coronavirus was confirmed in our country.



Since then, all our lives have changed in fundamental ways.



As a nation we have been forced to take aggressive action against an invisible enemy that threatened our lives and the lives of our loved ones.



We have been forced to adapt to a new way of living, in a short space of time.



As we enter the fifth week of an unprecedented nation-wide lockdown – and as we look to the future – we should remember why we are here.



The novel coronavirus, which was identified in the Chinese city of Wuhan in December last year, has spread rapidly across the world.



To date, over 2.6 million confirmed cases have been reported worldwide.



The actual number of people infected is likely to be far higher.



The coronavirus causes the disease known as COVID-19, a respiratory illness for which humans currently have no immunity and for which there is no known cure.



The coronavirus is passed from person to person in small droplets from the nose and mouth that can be transmitted by direct contact, on surfaces we touch or when an infected person coughs or sneezes when they are close to another person.



Most infected people exhibit only mild symptoms; some do not show any symptoms at all.



But there are people who develop severe symptoms and require hospitalisation.



These are usually older people and those who suffer from underlying conditions such as heart disease, diabetes, chronic respiratory disease and cancer.



For some of these people, COVID-19 is fatal.



Across the world, more than 185,000 people have succumbed to the disease.



Here in South Africa, at least 75 people have lost their lives.



Because the coronavirus can spread so rapidly through a population, it can overwhelm even the best-resourced health system within a matter of weeks.



This is what has occurred in many countries across the world, and it is precisely what we, as South Africa, have gone to great lengths to prevent.



Very few health systems across the world – if any – are prepared for a sudden and exponential increase in people requiring treatment for a severe respiratory illness.



As a result, if the virus spreads too quickly, there are not enough hospital beds, intensive care units, ventilators, personal protection equipment or medicine for everyone who needs them.



To make matters worse, people who are suffering from other conditions or need emergency procedures are unable to get the care they need.



And in such circumstances, many lives that could have been saved, are lost.



I am reiterating these basic facts – which by now are probably familiar to many of you – because they explain the actions we have taken to date and they inform the measures I am announcing this evening.



From the moment we declared the coronavirus pandemic to be a national disaster on Sunday 15 March, our objective was to delay the spread of the virus.



We have sought to avoid a massive surge in infections and an uncontrollable increase in the number of people needing medical care.



Our approach has been based on the principles of social distancing, restriction of movement and stringent basic hygiene practices.



By delaying the spread of the virus, we have had time to prepare our health facilities and mobilise some of the essential medical supplies needed to meet the inevitable increase in infections.



And it is in so doing, that we hope to save tens of thousands of lives.



There is clear evidence that the lockdown has been working.



Together with the other measures we have taken – such as closing our borders – and the changes in behaviour that each of us has made, the lockdown has slowed the progression of the pandemic in the country.



The World Health Organization has commended South Africa for acting swiftly and for following scientific advice to delay the spread of the virus.



Yet, while a nation-wide lockdown is probably the most effective means to contain the spread of the coronavirus, it cannot be sustained indefinitely.



Our people need to eat. They need to earn a living. Companies need to be able to produce and to trade, they need to generate revenue and keep their employees in employment.



We have accordingly decided that beyond Thursday 30 April, we should begin a gradual and phased recovery of economic activity.



We will implement a risk adjusted strategy through which we take a deliberate and cautious approach to the easing of current lockdown restrictions.



We have decided on this approach because there is still much that is unknown about the rate and manner of the spread of the virus within our population.



The action we take now must therefore be measured and incremental.



This approach is guided by the advice from scientists who have advised that an abrupt and uncontrolled lifting of restrictions could cause a massive resurgence in infections.



We cannot take action today that we will deeply regret tomorrow.



We must avoid a rushed re-opening that could risk a spread, which would need to be followed by another hard lockdown, as has happened in other countries.



We have to balance the need to resume economic activity with the imperative to contain the virus and save lives.



To achieve this, we have developed an approach that determines the measures we should have in place based on the direction of the pandemic in our country.



As part of this approach, there will be five coronavirus levels:



Level 5 means that drastic measures are required to contain the spread of the virus to save lives.



Level 4 means that some activity can be allowed to resume subject to extreme precautions required to limit community transmission and outbreaks.



Level 3 involves the easing of some restrictions, including on work and social activities, to address a high risk of transmission.



Level 2 involves the further easing of restrictions, but the maintenance of physical distancing and restrictions on some leisure and social activities to prevent a resurgence of the virus.



Level 1 means that most normal activity can resume, with precautions and health guidelines followed at all times.



To ensure that our response to the pandemic can be as precise and targeted as possible, there will be a national level and separate levels for each province, district and metro in the country.



We are currently at Level 5, which requires a full national lockdown to contain the spread of the virus.



This is the highest level of lockdown and was imposed when drastic action was necessary to curb transmission.



The National Coronavirus Command Council will determine the alert level based on an assessment of the infection rate and the capacity of our health system to provide care to those who need it.



We have undertaken a detailed exercise to classify the different parts of the economy according to the risk of transmission in that sector, the expected impact of the lockdown, the economic contribution of the sector and the effect on livelihoods.



The relevant Ministers will provide a detailed briefing on the classification of industries and how each is affected at each level.



We will give all industry bodies an opportunity to consider these details and, should they wish, to make submissions before new regulations are gazetted.



The National Coronavirus Command Council met earlier today and determined that the national coronavirus alert level will be lowered from level 5 to level 4 with effect from Friday the 1st of May.



This means that some activity will be allowed to resume subject to extreme precautions to limit community transmission and outbreaks



Some businesses will be allowed to resume operations under specific conditions.



Every business will have to adhere to detailed health and safety protocols to protect their employees, and workplace plans will be put in place to enable disease surveillance and prevent the spread of infection.



All businesses that are permitted to resume operations will be required to do so in a phased manner, first preparing the workplace for a return to operations, followed by the return of the workforce in batches of no more than one-third.



In some cases, a sector will not be able to return to full production during Level 4 while the risk of infection remains high.



These will be spelt out next week following a final round of consultations.



Businesses will be encouraged to adopt a work-from-home strategy where possible.



All staff who can work remotely must be allowed to do so.



The relevant Ministers will provide details on the process for the phased re-opening of schools and other educational institutions.



As we gradually ease the restrictions, it is necessary that many of the measures to contain the spread of the virus remain in place.



When the country moves to level 4 on 1 May:



Our borders will remain closed to international travel, except for the repatriation of South African nationals and foreign citizens.



No travel will be allowed between provinces, except for the transportation of goods and exceptional circumstances such as funerals.



Public transport will continue to operate, with limitations on the number of passengers and stringent hygiene requirements, including that all passengers must wear a face mask.



The public is encouraged to stay at home, other than for essential personal movement, doing essential work and work in sectors that are under controlled opening. People can exercise under strict public health conditions.



All gatherings, apart from funerals and for work, will remain prohibited.



Those who are elderly, and those with underlying conditions, must remain at home and take additional precautions to isolate themselves.



The sale of cigarettes will be permitted.



The range of goods that may be sold will be extended to incorporate certain additional categories. These will be detailed by the relevant Ministers.



It is important to note that several restrictions will remain in place regardless of the level of alert for as long as the risk of transmission is present:



Bars and shebeens will remain closed.



Conference and convention centres, entertainment venues, cinemas, theatres, and concerts will remain closed.



Concerts, sporting events, and religious, cultural and social gatherings will not be allowed until it is deemed safe for them to continue.



The coronavirus is spread by contact between people.



If people do not travel, the virus does not travel.



We know, for example, that just one funeral in Port St Johns and one religious gathering in Mangaung contributed to a spate of infections in their respective provinces.



From the evidence we have, we know that 75 percent of confirmed coronavirus cases are found in just six metro municipalities – Johannesburg, Ekurhuleni, Cape Town, Buffalo City, EThekwini and Mangaung.



It is therefore essential that we do everything in our means to restrict the movement of people and – although it runs counter to our very nature – to reduce the contact that each of us has with each other.



Ultimately, it is our own actions, as individuals, that will determine how quickly the virus spreads.



If we all adhere to instructions and follow public health guidelines, we will keep the virus under control and will not need to reinstate the most drastic restrictions.



We can prevent the spread of coronavirus by doing a few simple things.



Wash your hands frequently with soap and water or use an alcohol based sanitiser.



Keep a distance of more than one metre between yourself and the next person, especially those who are coughing and sneezing.



Try not to touch your mouth, nose and eyes because your hands may have touched the coronavirus on surfaces.



When you cough or sneeze cover your mouth and nose with your bent elbow or a tissue, and dispose of the tissue right away.



As we begin the easing of lockdown restrictions from the beginning of May, we are calling on all South Africans to wear a face mask whenever you leave home.



Our clothing and textile industry – including many small businesses – are gearing up to produce these masks on a mass scale.



The extraordinary measures that we have put in place to combat the coronavirus pandemic have been matched by the extraordinary contributions of many South Africans.



We pay tribute to them, the nurses, the doctors, the scientists and the community screening field workers who are leading our public health response.



We are committed to ensuring that they have all the resources they need – including adequate personal protection equipment and other recognition – to undertake the work that is being asked of them.



As we slowly ease the lockdown restrictions, we are substantially and rapidly increasing our public health response.



We have already seen a huge increase in community screening and testing.



Guided by advice from the World Health Organization and the Africa Centres for Disease Control and Prevention, we have joined other African countries in placing mass screening and testing at the centre of the next phase of our response.



Earlier in the week, I announced an additional allocation of R20 billion to our health response to ensure that we have the beds, medicine, equipment and personnel required when the country experiences the peak of infections.



This evening, I also want to pay tribute to those who are providing essential services and goods – the truck, taxi, bus and train drivers; the workers on farms, in stores, at power stations, at water plants, at petrol stations, in banks and in call centres; the law enforcement officials and security personnel.



It is thanks to your efforts that we have been able to make such valuable progress in combating this pandemic.



As part of expanding this effort, I have employed over 70,000 defence force personnel to assist with various parts of our coronavirus response.



Until now, those defence force members that have been deployed have supported the South African Police Service in their responsibilities.



They will continue to do so, but they will also be providing assistance in other essential areas, such as the provision of water supply, infrastructure maintenance and health services.



This is a crucial moment in our struggle against the coronavirus.



It is a time for caution.



It is a time to act responsibly.



It is a time for patience.



There is no person who doesn’t want to return to work.



There is no company that does not want to re-open.



There is no student who does not want to return to their studies.



Yet, we are all called upon, at some time in our lives, to make great sacrifices for our own future and for the future of others.



There are times when we must endure hardship and difficulty, so that we can enjoy freedom and prosperity into the future.



During the past five weeks, we have demonstrated to the entire world what a nation can achieve with courage, determination and solidarity.



We must not give up now.



I am asking you to stay strong.



I am asking you to remain united.



Stay home, stay safe.



Thank you for all that you have done and continue to do.



May God bless South Africa and protect her people.



I thank you.

Ramaphosa tests negative for coronavirus as South Africa to begin lockdown

CR-lockdown

SA to phase out lockdown, these are the details

By Piet Mouton, CEO of PSG and it board 



We would like to make the following points on Covid-19 – Firstly, please note that these are the current thoughts of the PSG Group Board. Even though we have read numerous articles, have listened to experts from both sides, are constantly thinking about the consequences of the pandemic and obtain input from all those around us, none of us have a medical background. We are also aware of the fact that the President may address certain or all of our concerns this evening. PSG Group is a company that employs more than 20,000 people throughout various industries within our group. We pay salaries, we pay taxes and we have contributed positively to our economy for the past 25 years. We as PSG Group lie awake at night as we have a major responsibility to all our employees and their families, to our clients, our suppliers, our bankers, our Government and ultimately to the people of our country. To remain quiet during this crisis is unfortunately no longer an option for us and silence will certainly not be of benefit to anyone.



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 We must start by congratulating President Ramaphosa and his cabinet on the quick and decisive way in which they acted to address the pandemic. It is great to see that our leadership and country can act swiftly and with purpose. That we can stand together to achieve a common goal. We understand from various medical opinions published in the media, that we have potentially bought enough time to be as ready as one can be to face what may come. Mr. President, whatever we say hereafter is not to criticize your administration or question your actions. You are between a rock and a hard place and we do not envy your position. It is not an easy task to balance different concerns. But here is the issue as we see it – the lockdown and especially the potential extension or failure to adequately relax restrictions are causing severe damage to what is left of our fragile economy. The longer it takes to come out of the lockdown, the worse it will be going forward for every citizen of South Africa. Alternatively, if we have a system whereby we move in and out of lockdown depending on the number of infections, this too will have a similar disastrous effect. The only option is a continued lockdown of the elderly and frail until the virus is contained or a vaccine becomes available, while the economy operates as close to normal as possible. Please understand us correctly – we are NOT arguing economy over lives. BUT the truth is that lives are inextricably linked to the economy. Our survival and wellbeing depend on whether and how quickly our economy recovers. Our economy is struggling, and we are running at a significant budget deficit with already worrying levels of debt, high unemployment and struggling parastatals. We do not have the means to provide meaningful relief packages on a sustainable basis without further loading the debt burden to such an extent that we may never be able to repay it, or struggle to do so. South Africa has recently been downgraded to junk status and has been assigned a negative outlook – so any new debt will become even more expensive. We entered this Covid-19 war already wounded. Government’s primary source of income to address the pandemic, drive relief and provide stimuli for economic growth is one of the things that is under attack…namely tax collection. More than 80% of tax revenue is derived from personal tax, corporate tax and VAT. Many businesses earn no revenue at the moment, while others do very little: o As a result, significant less VAT and corporate tax will be collected: o Businesses have stopped paying their rent and other suppliers as they simply cannot afford to – resulting in a very negative economic spiral and ever-decreasing VAT and income tax revenue. o As far as individuals are concerned, they too have stopped paying rent, servicing debt and consumer spending is down significantly as a result of the lockdown. Again, less economic activity means less VAT. &#8211; We can expect most companies that survive the lockdown to make significantly lower profits, if any, for the year – so very little corporate tax will be collected. Similarly, tax losses will also have a negative impact on future year tax revenue for Government. &#8211; According to Stats SA, 42% of formal sector business surveyed fear they will not have the financial resources to survive and 85% have already seen a decline in revenue. o There will be significant job losses – which translates to the loss of personal tax revenue, loss of spending power for the individual and an increase in Government grants to be paid. o Most of our SMEs do not have surplus reserves – many of them will close forever with a consequent loss of jobs and tax. Relief funds may assist a few, but most will unfortunately not make it. o The decrease in interest rates is understandable given the state of the economy, but it will not be enough to assist most SMEs and will do very little for the man in the street – and again tax collections will suffer. It is therefore clear to us that Government will experience a significant decline in tax revenue resulting in the already noteworthy budget deficit widening even further. We must ask ourselves realistically – where is the money going to come from to revigorate the economy and pay for an ever-increasing social bill? Less people will be able to contribute to the South African treasury and far more will become utterly dependent on it. Yes, the Solidarity Fund, to which we also contribute, is a worthy initiative to assist but may not be enough. According to a recent study, the economy is losing R13bn per day during the lockdown, and we will still lose billions even if we partially open or totally open up the economy. On Tuesday evening, President Ramaphosa announced a R500bn economic support package representing 10% of South Africa’s GDP. This will comprise various measures and will seemingly be funded by the likes of the World Bank, the IMF and the BRICS Development Bank, as well as the reallocation of previously set budgets and the utilization of UIF reserves. Although an admirable effort, realistically we need to be clear it will in the end mainly be a relief intervention directed towards preventing a fullblown humanitarian disaster rather than an economic stimulus. Again, a further increase in debt of this magnitude will unfortunately have dire long-term consequences for our economy and our country.



We understand that COVID-19 will be part of our reality for the foreseeable future. In the President’s announcement on Tuesday, he hinted at a phased relaxation of the lockdown restrictions of which the details will only be announced later today. We don’t want to deter from the President’s message, but we are trying to convey a reality as we see it and to emphasize that South Africa cannot afford to long or to slowly to revert normal activities. My father, who I greatly admire, taught me that you cannot just sit back and complain if you don’t have a better solution. Furthermore, it is of no use that I nod my head to everything proposed by Government, but behind closed doors differ as so many people in the business community do. No one wants to make unpopular statements and become a target on social media for those who will later also be the first to claim what should have been done. This has never been our style. We therefore publicly request Government to carefully consider the extent of further restrictions and the urgency to return to economic activity. We believe South Africa should act much faster in lifting restrictions to rejuvenate the economy. We agree with scientists that we should protect the elderly and those with compromised immunity with continued isolation protocols in place for them. We too have elderly loved ones, as well as friends who suffer from cancer and other diseases that make them especially vulnerable – and we want them protected. The rest of us, however, need to get back to work. We agree with Government that a lot more testing should be done as we move forward. Further, we need to understand that in the absence of any vaccine for the disease in the short to medium term, we need to obtain herd immunity sooner rather than later. We acknowledge that this means more people will be infected and that some may become very ill. There will undoubtedly be a cost of lives, but we’re afraid that if we are bluntly honest with one another we are heading for an immense cost of lives in any event. If not from Covid-19, from starvation, social unrest, crime and a myriad of other chronic diseases which will follow. The fabric of our society will also be severely affected and damaged – polarization of people will be driven to the extreme. Just one example where it is very evident, is the closing of schools – those with digital means can home school to some extent while the poor are again left behind and exposed – and an educated youth is our future. The consequences are severe no matter which way we argue it. Please do not consider our abbreviated opinion as being heartless – it is exactly because we care about the well-being and the future of our citizens, our children, your children and our country which we all love that we’re speaking up. It will not help if we sugar coat our message today to appease a specific group or endear ourselves to the popular view. We need to be honest about what lies ahead if we want to win the war – not just against Covid-19, but against the hardship that will follow. We are a South African company heavily invested in South Africa. We continue to invest our shareholders’ money, to support Government efforts, to create jobs and to assist in growing the economy for the benefit of all stakeholders. In theory and on paper one can therefor plan a release of restrictions over several months, but in practice, given the state of our economy, we unfortunately do not have the luxury of time to do so. South Africans are resilient, entrepreneurial and hard-working human beings. Together with Government we can overcome Covid-19, we can get our economy going again, we can lessen the impact of future hardship and the future cost of lives… BUT we need to act faster to relax restrictions and reignite our economy on which all of our lives ultimately depend

Piet Mouton 1

PSG CEO Piet Mouton’s impassioned plea to SA’s President: act faster in lifting restrictions to rejuvenate the economy

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Andy Duplessis, Managing Director, FoodFoward SA spoke to CNBC Africa about Ramaphosa’s R500bn COVID-19 stimulus package and that the aid reaches the intended beneficiaries.

FoodFoward SA feeding South Africa’s hungry amid COVID-19 crisis

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Last night South African President Cyril Ramaphosa announced a R500 billion economic recovery stimulus package as a national response to deal with the devastating impact of the Covid-19 pandemic on the country. Joining CNBC Africa to unpack this is Economist, Mike Schüssler.

COVID-19: How will SA fund its R500bn economic stimulus package?

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South Africa’s consumer price inflation slowed to 4.1 per cent year-on-year in March, from 4.6 per cent in February. The main contributors to the 4.1 per cent annual inflation rate were food, non-alcoholic beverages; housing and utilities. Joining CNBC Africa to unpack more is Patrick Kelly, Chief Director at Stats SA.

SA’s consumer inflation slows to 4.1% y/y in March – these were the main drivers

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Joining CNBC Africa to discuss the mix of global and local market news is Edgar Mafoko, Investment Portfolio Manager at FNB.

SA announces R500bn COVID-19 economic stimulus package

South Africa&#8217;s President Cyril Ramaphosa announced an R500 billion ($26bn) stimulus package to deal with the <a href="https://www.cnbcafrica.com/coronavirus/2020/04/14/covid-19-sa-economy-to-shed-a-million-jobs-and-shrink-by-up-to-10-per-cent/">devasting economic impact of COVID-19</a> and a <a href="https://www.cnbcafrica.com/coronavirus/2020/04/09/sa-extends-lockdown-by-two-weeks-until-end-april/">35-day lockdown</a>. 



He said the money would come from its adjustment budget, the Unemployment Insurance Fund and <a href="https://www.cnbcafrica.com/coronavirus/2020/04/14/covid-19-sa-will-leave-no-stone-unturned-in-obtaining-funding-from-multilateral-institutions-to-assist-its-economy-finmin-mboweni/">multilateral institutions</a>.



The World Bank, the New Development Bank, the International Monetary Fund and African Development Bank have been approached for funding.



 Measures introduced to assist the economy include:



<ul><li>R20 billion to assist efforts that address the pandemic.</li><li>R20 billion for municipalities for the provision of emergency water supply, increased sanitisation of public transport and facilities, and providing food and shelter for the homeless.</li><li>A six-month temporary COVID-19 grant of R50 billion. This means that child support grant beneficiaries will receive an extra R300 in May and from June to October they will receive an additional R500 each month. All other grant beneficiaries will receive an extra R250 per month for the next six months.</li><li>A special Covid-19 Social Relief of Distress grant of R350 a month for the next 6 months will be paid to individuals who are currently unemployed and do not receive any other form of social grant or UIF payment.</li><li>R100 billion for protection of jobs and to create jobs.</li><li>R40 billion for income support payments for workers whose employers are not able to pay their wages.</li><li>R200 billion loan guarantee scheme to be introduced to help businesses pay salaries, rents and suppliers. Companies with a turnover of less than R300 million a year can participate.</li></ul>



A phased approach will be taken to reopen the economy of which Ramaphosa said he will address the nation on Thursday. 



See below for his full statement&#8230;



My Fellow South Africans,



It is 25 days since South Africa began a nation-wide lockdown to contain the spread of the coronavirus.



It has demanded of you great fortitude and endurance.



It has caused you much suffering and required much sacrifice.



Once again, I salute you and I thank you.



The coronavirus pandemic has disrupted your lives and damaged our economy.



Its severity will continue to take a heavy toll in the weeks and months to come.



The pandemic has resulted in the sudden loss of income for businesses and individuals alike, deepening poverty and increasing hunger.



The urgent and dramatic measures we have taken to delay the spread of the virus have been absolutely necessary.



They have given us the space to better respond to the inevitable rise in infections and to thereby save tens of thousands of lives.



While the nation-wide lockdown is having a devastating effect on our economy, it is nothing compared to the catastrophic human, social and economic cost if the coronavirus could spread among our people unchecked.



Medical scientists and our doctors inform us that we are still in the early stages of this pandemic.



Without proven therapeutic medicines or a vaccine, we can expect this to continue as a problem for the foreseeable future.



Our foremost priority now is to intensify the health interventions needed to contain and delay the spread of the disease and to save lives.



To date, the coronavirus has taken the lives of at least 58 people in our country.



This is a loss that we all mourn, for we know the pain and the anguish of their loved ones.



From the more than 126,000 tests conducted, 3,465 confirmed cases of coronavirus have been identified.



More than 2 million people have been screened in communities across the country and, of these, over 15,000 have been referred for testing.



Alongside this unprecedented public health effort are the measures we are taking to protect livelihoods, to stave off hunger and destitution and to set our economy on a path of recovery.



This evening, I wish to address you on our economic and social response to this global health emergency.



The pandemic requires an economic response that is equal to the scale of the disruption it is causing.



Our economic response can be divided into three phases.



The first phase began in mid-March when we declared the coronavirus pandemic as a national disaster.



This included a broad range of measures to mitigate the worst effects of the pandemic on businesses, on communities and on individuals.



The measures included tax relief, the release of disaster relief funds, emergency procurement, wage support through the UIF and funding to small businesses.



We are now embarking on the second phase of our economic response to stabilise the economy, address the extreme decline in supply and demand and protect jobs.



As part of this phase, we are announcing this evening a massive social relief and economic support package of R500 billion, which amounts to around 10% of GDP.



The third phase is the economic strategy we will implement to drive the recovery of our economy as the country emerges from this pandemic.



Central to the economic recovery strategy will be the measures we will embark upon to stimulate demand and supply through interventions such as a substantial infrastructure build programme, the speedy implementation of economic reforms, the transformation of our economy and embarking on all other steps that will ignite inclusive economic growth.



We will outline this in coming days.



Over the past few days, we have been in consultations with various stakeholders.



We have met with business, labour and the community constituency in NEDLAC.



We have met with Premiers, MECs and Metro Mayors and with the members of the Presidential Economic Advisory Council.



Following these meetings, Cabinet considered various proposals and finalised the social relief and economic support package that stands at the centre of the second phase of our economic response.



This involves:



Firstly, an extraordinary health budget to respond to coronavirus,



Secondly, the relief of hunger and social distress,



Thirdly, support for companies and workers,



Fourthly, the phased re-opening of the economy.



The impact of the coronavirus requires an extraordinary coronavirus budget – of&nbsp; around R500 billion – to direct resources towards fighting the pandemic.



This will include the reprioritisation of around R130 billion within the current budget.



The rest of the funds will be raised from both local sources, such as the Unemployment Insurance Fund, and from global partners and international finance institutions.



To date, the World Bank, International Monetary Fund, BRICS New Development Bank and the African Development Bank have been approached and are working with the National Treasury on various funding transactions.



Some of these institutions have created financing packages that are aimed at assisting countries that are having to address the coronavirus crisis like us.



This funding will be used, in the first instance, to fund the health response to coronavirus.



An amount of R20 billion will be directed to addressing our efforts to address the pandemic.



If we are to successfully manage the anticipated surge in cases and ensure that everyone who needs treatment receives it, we must provide for additional expenditure on personal protective equipment for health workers, community screening, an increase in testing capacity, additional beds in field hospitals, ventilators, medicine and staffing.



The nation-wide lockdown has had a negative impact on the revenue of municipalities at a time when the demands on them are increasing.



Additional funding of R20 billion will therefore be made available to municipalities for the provision of emergency water supply, increased sanitisation of public transport and facilities, and providing food and shelter for the homeless.



Details will be announced in the adjustment budget tabled by the Minister of Finance.



Another significant area that requires massive additional expenditure is the relief of hunger and social distress in our communities across the country.



While we have put in place measures to protect the wages of workers in the formal economy and have extended support to small, medium and micro-sized businesses, millions of South Africans in the informal economy and those without employment are struggling to survive.



Poverty and food insecurity have deepened dramatically in the course of just a few weeks.



To reach the most vulnerable families in the country, we have decided on a temporary 6-month Coronavirus grant.



We will direct R50 billion towards relieving the plight of those who are most desperately affected by the coronavirus.



This means that child support grant beneficiaries will receive an extra R300 in May and from June to October they will receive an additional R500 each month.



All other grant beneficiaries will receive an extra R250 per month for the next six months.



In addition, a special Covid-19 Social Relief of Distress grant of R350 a month for the next 6 months will be paid to individuals who are currently unemployed and do not receive any other form of social grant or UIF payment.



The Department of Social Development will issue the requirements needed to access and apply for this funding.



We have recognised that the food distribution capacity of government is not adequate to meet the huge need that has arisen since the start of the epidemic.



The South African Social Security Agency – SASSA – will within days implement a technology-based solution to roll out food assistance at scale through vouchers and cash transfers to ensure that help reaches those who need it faster and more efficiently.



In addition, to fill the immediate need, the Department of Social Development has partnered with the Solidarity Fund, NGOs and community-based organisations to distribute 250,000 food parcels across the country over the next two weeks.



We are deeply disturbed by reports of unscrupulous people abusing the distribution of food and other assistance for corrupt ends.



We will not hesitate to ensure that those involved in such activities face the full might of the law.



While there are several interventions that already exist within government to deal with the extremely high unemployment such as the Expanded Public Works Programme and the community works programme, these are not enough.



The coronavirus crisis will lead to many people losing their jobs.



An additional R100 billion will be set aside for protection of jobs and to create jobs.



Since the declaration of a state of national disaster over a month ago, government has put in place a range of measures to support workers’ wages and assist companies in distress.



By the end of today, the UIF’s special COVID-19 benefit has paid out R1.6-billion, assisting over 37,000 companies and 600,00 workers.



R40 billion has been set aside for income support payments for workers whose employers are not able to pay their wages.



We continue to provide assistance – in the form of loans, grants and debt restructuring – to SMMEs, spaza shop owners and other informal businesses.



The value of this assistance to date is over R100 million.



An additional amount of R2 billion will be made available to assist SMEs and spaza shop owners and other small businesses.



The IDC facility to support companies to procure or manufacture personal protective equipment has been utilised in the past few weeks, with finance of R162 million approved to date.&nbsp;



Other forms of support have been extended to artists, athletes and technical personnel, as well as to waste pickers and public works participants in the environment sector.



While these measures are providing obvious relief to many companies and workers, it is clear that there is a far greater need across the entire economy.



We will therefore be introducing a R200 billion loan guarantee scheme in partnership with the major banks, the National Treasury and the South African Reserve Bank.



This will assist enterprises with operational costs, such as salaries, rent and the payment of suppliers.



In the initial phase, companies with a turnover of less than R300 million a year will be eligible.



It is expected that the scheme will support over 700,000 firms and more than 3 million employees through this difficult period.



A number of the banks are ready to roll out the product before the end of the month.



Government is also working on additional support measures for vulnerable and affected sectors like the taxi industry.



In addition to existing tax relief measures, we will also be introducing a 4-month holiday for companies’ skills development levy contributions, fast-tracking VAT refunds and a 3-month delay for filing and first payment of carbon tax.



To assist a greater number of businesses, the previous turnover threshold for tax deferrals is being increased to R100 million a year, and the proportion of PAYE payment that can be deferred will be increased to 35 percent.



Businesses with a turnover of more than R100 million a year can apply directly to SARS on a case-by-case basis for deferrals of their tax payments.



No penalties for late payments will be applicable if they can show they have been materially negatively impacted in this period.



Taxpayers who donate to the Solidarity Fund will be able to claim up to an additional 10 percent as a deduction from their taxable income.



In total these tax measures should provide at least R70 billion in cash flow relief or direct payments to businesses and individuals.



The Minister of Finance will provide further details on the above and other tax-related announcements.



In the implementation of all these measures, we are determined to ensure that women, youth and persons with disability received particular attention and support.



The South African Reserve Bank has also made an important contribution to support the real economy.



In line with its Constitutional mandate, it has cut the repo rate by 200 basis point, in effect unlocking at least R80 billion in the real economy, and taking other steps to provide additional liquidity to the financial system.



Several commercial banks and insurance companies have also assisted the economic relief effort by, among other things, delaying or reducing instalment payments, providing debt relief, and waiving bank fees for grant beneficiaries.



The fourth area on which Cabinet has resolved is the phased re-opening of the economy.



We will follow a risk-adjusted approach to the return of economic activity, balancing the continued need to limit the spread of the coronavirus with the need to get people back to work.



As I have said previously, if we end the lockdown too soon or too abruptly, we risk a massive and uncontrollable resurgence of the disease.



We will therefore follow a phased approach, guided by the best available scientific evidence, to gradually lift the restrictions on economic activity.



As we do so, we remain firm in our resolve to contain the transmission of the virus.



We will therefore need to act with agility and flexibility in the weeks and months ahead, and respond to the situation as it develops.



On Thursday, I will address the nation on the measures that will be taken beyond the nation-wide lockdown to re-open the economy.



This crisis will not last forever, and the day will come when these measures are no longer needed.



Until then, however, we must ensure that all of our people receive adequate support.



The scale of this emergency relief programme is historic.



It demonstrates that we will not spare any effort, or any expense, in our determination to support our people and protect them from harm.



We will – and we must – do whatever it takes to recover from this human, social and economic crisis.



Our country and the world we live in will never be the same.



We are resolved not merely to return our economy to where it was before the coronavirus, but to forge a new economy in a new global reality.



Our economic strategy going forward will require a new social compact among all role players – business, labour, community and government – to restructure the economy and achieve inclusive growth.



Building on the cooperation that is being forged among all social partners during this crisis, we will accelerate the structural reforms required to reduce the cost of doing business, to promote localisation and industrialisation, to overhaul state owned enterprises and to strengthen the informal sector.



We will forge a compact for radical economic transformation that ensures that advances the economic position of women, youth and persons with disabilities, and that makes our cities, towns, villages and rural areas vibrant centres of economic activity.



Our new economy must be founded on fairness, empowerment, justice and equality.



It must use every resource, every capability and every innovation we have in the service of the people of this country.



Our new economy must open new horizons and offer new opportunities.



Over the past month, South Africans have opened their hearts each other.



Even at this moment when such great sacrifice is demanded of us, we look to a better future with optimism.



Even as we find ourselves at a moment of great peril, even as great sacrifices are demanded, even as we dare not allow our vigilance to waver, we look ahead to a better future.



I have faith in the strength and resilience of ordinary South Africans, who have proven time and time again – throughout our history – that they can rise to the challenge.



We shall recover.



We shall overcome.



We shall prosper.



May God bless South Africa and protect her people.



I thank you.



ISSUED BY THE PRESIDENCY OF THE REPUBLIC OF SOUTH AFRICA

ramaphosa

COVID-19: SA announces R500bn stimulus package; about 10% of GDP

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CEOs of JSE listed companies have heeded Cyril Ramaphosa’s call to join the 30 per cent pay cut club to fight against the COVID-19 pandemic. Some are contributing to the Solidarity Fund, others to emergency funds for staff, while Massmart’s executives are contributing 230 tons of food to FoodForward South Africa over the next three months. Kuseni Dlamini, Chairman of Massmart joins CNBC Africa for more.

COVID-19: Massmart’s execs take pay cuts to help feed the hungry

By Chris Bishop.



President Cyril Ramaphosa urged South Africa business not to throw in the towel in the face of COVID-19 for fear that it could many other send companies under.



Several times in his speech, President Ramaphosa referred to the damage COVID-19 is doing to an economy already reeling from a down grade to junk by Moody’s last week. This week, the South African Reserve Bank warned that the lockdown could cause 370,000 people to lose their jobs and force 1,600 businesses to go under.



“I would like to appeal to all&nbsp; large businesses not to resort to &nbsp;force majeure and stop paying their suppliers and rental commitments , as such practice has a domino effect on all other businesses dependent on that chain,” says President Ramaphosa in a broadcast to the nation.



President Ramaphosa said cabinet would be working towards a comprehensive support plan for the economy during the lockdown that has been extended to the end of April.



For now, the government is trying to pour tranches of cash into the economy to try to keep money in workers’ pockets and food on the table.



President Ramaphosa applauded employers who continued to pay salaries during the lockdown and said R40 billion was in the UIF – unemployment insurance fund – to help workers who had lost income. He said R356 million had been paid out since the lockdown.



Small businesses could claim from a R500 million relief fund and R1.2 billion would be put up to help small scale farmers survive the lockdown, in which the food supply is a huge concern.



The Solidarity Fund – set up at the lockdown by the President – gathered R500 million in its first week and has now raised R2.2 billion. &nbsp;It has spent a billion Rand on gloves, test kits and will set aside R400 million to help poor households.



On top of this, Vodacom has given 20,000 cell phones to health workers to help them use an app in the fight against COVID-19. The Industrial Development Corporation has set aside R3 billion to buy essential medical supplies. &nbsp;



President Ramaphosa also pledged that his deputy, ministers and their deputies, plus the provincial premiers, would all give a third of their salary for the next three months to the Solidarity Fund.



“We shall recover. We shall overcome. May God bless South Africa and protect her people,” concluded Ramaphosa as he concluded his speech announcing the two week extension to the lockdown. &nbsp;



Certainly, South African business is likely to welcome all the help it can get.

Why business should not throw in the towel in the face of COVID-19

SA extends lockdown by two weeks until end April

Chairperson of the African Union (AU) and President of the Republic of South Africa Cyril Ramaphosa has reaffirmed the union’s support for the <a href="https://www.cnbcafrica.com/coronavirus/2020/04/09/covid-19-how-the-who-word-on-africa-could-influence-sa-big-lockdown-choice/">World Health Organization’s (WHO)</a> efforts to combat the global COVID-19 pandemic.



The AU furthermore commends all who have supported and pledged to support <a href="https://www.cnbcafrica.com/news/2020/04/09/covid-19-drives-sub-saharan-africa-toward-first-recession-in-25-years-world-bank-report/">Africa’s response to COVID-19</a> by reinforcing healthcare systems and helping to mitigate the social and economic impact of the virus.



For more information, read the statement below:



DATE : WEDNESDAY, 08 APRIL 2020



AFRICAN UNION REAFFIRMS ITS UNWAVERING SUPPORT TO WHO



The Covid-19 pandemic is already the most serious health emergency in generations, and it is far from over. The Coronavirus pandemic has undoubtedly changed our ways of life; impacted on the capacities of our health infrastructure and has disrupted the economic supply value chain with attendant negative impact on global economies. As the world grapples with the challenge of the Coronavirus, there is a need for solidarity, unity of purpose and better coordination to ensure that we are able to overcome this common enemy.



It is within this context, that the Chairperson of the African Union and President of the Republic of South Africa, HE Cyril Ramaphosa reaffirms his appreciation for the exceptional leadership of the Director-General of the World Health Organization (WHO), Dr Tedros Adhanom Ghebreyesus, from the very earliest stages of this unprecedented global health crisis.



The African Union has also commended the management of Dr Tedros in leading the global response to the pandemic.



Overall the AU recognises and appreciates the good work that has been undertaken by the WHO and notes with a sense of satisfaction the various initiatives and measures that are continuously undertaken by the organisation to mitigate the spread of the pandemic such as mobilising resources, sharing the real-time information and providing the technical and material support.



On a daily basis, the WHO has been an essential technical and scientific partner to the African Union and the Africa Centers for Disease Control and Prevention (Africa CDC), as we work to mitigate the pandemic which has now reached nearly every member state.



The African Union has seen Dr Tedros in action before when he and the world class WHO health experts led global efforts to fight against Ebola Outbreak in the Democratic Republic of the Congo. In appreciation of these efforts, the African Union extends its unwavering support to the WHO and its Director-General.



The AU calls upon international community to join hands to support the efforts of the DG and the entire WHO family as they lead global efforts to fight this pandemic. If there was a time for global unity, solidarity and cooperation, this is that time. Working together, we will be able to overcome this challenge.



While all our countries are facing daunting and frustrating tasks to contain the spread of the pandemic, we should avoid temptation to apportion blame to any individual, institution or any country at a time when we should all be working together. We should work together to confront our common enemy in the form of COVID-19; and we should not allow ourselves to be distracted by anything else. Our success against this pandemic will only be realised through collaboration, cooperation and most importantly through global solidarity.



The most potent weapon against Covid-19 remains international cooperation and solidarity, as we have seen around the world. The African Union has seen firsthand the groundswell of international cooperation since the onset of this pandemic and wishes to commend all who supported and have pledged to support Africa’s response to Covid-19 by reinforcing our health systems and helping to mitigate the social and economic impact. These partners include the G20, China, the United States, the European Union, the Jack Ma Foundation, among others.



The African Union extends its appreciation to all medical personnel who are in the forefront of the battlefield for their selflessness and diligence.



President Ramaphosa further calls on all African Union members and international partners to maintain and reinforce this international cooperation and collaboration in the difficult weeks and months ahead.



May we all continue, as a collective, to play our part to combat this pandemic with vigour and determination in order to return our lives to normalcy.



ISSUED BY THE PRESIDENCY OF THE REPUBLIC OF SOUTH AFRICA AND CHAIRPERSON OF AFRICAN UNION



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

African Union reaffirms support for WHO amid COVID-19 pandemic

JOHANNESBURG (Reuters) &#8211; South African petrochemicals giant Sasol Ltd on Wednesday cut its guidance for synthetic fuel production and liquid fuel sales for this financial year due to a three-week nationwide lockdown linked to coronavirus.



Sasol is now expecting to produce approximately 7.3-7.4 million tons of synfuel against the previously guided range of 7.7–7.8 million tons, the company said in a statement to the Johannesburg Stock Exchange.



It is also targeting sales of 50–51 million barrels of liquid fuel for the financial year 2020, against 57–58 million barrels previously, it said.



Synfuel or synthetic fuel is a form of liquid fuel made from coal in South Africa. Sasol is the world’s biggest producer of motor fuel from coal.



South African President Cyril Ramaphosa imposed a nationwide lockdown at the end of March to contain spread of the deadly coronavirus, which has already <a href="https://www.cnbcafrica.com/news/2020/04/02/south-africa-needs-hundreds-of-thousands-of-covid-19-tests-health-minister/">infected 1,749 people in the country and killed 13</a>.



The lockdown, which prompted rating agency <a href="https://www.cnbcafrica.com/coronavirus/2020/04/03/fitch-downgrades-sa-2/">Moody’s to downgrade the country’s sovereign rating to junk</a>, crashed domestic demand at a time when the economy had already slipped into a recession.



It is projected to contract further in the current financial year.



“Sasol’s management team is in the process of proactively identifying further measures to provide an additional buffer against short-term volatility,” said the company in its statement, referring to the fall in demand in the country.



The group, which is also <a href="https://www.cnbcafrica.com/earnings/2020/03/17/sasol-plans-2bn-rights-issue/">facing high debt levels and falling oil and chemical prices</a>, said it has decided to suspend production at its inland crude oil refinery Natref from April 9.



“A decision was also made by Sasol to reduce daily production rates at our Secunda Synfuels Operations (SSO) by approximately 25%,” it said.



A further reduction in rates may be required depending on further developments in the fuels market, the company added.



However, Sasol said despite the suspension of output at the Natref refinery and lower production rates at SSO, the country’s current demand for fuels and chemicals, including sanitisers, will be met.



It had said on March 31 that its full-year results could be hit by potential disruptions to production, supply chains and construction as the coronavirus continued to spread across the world.



(Reporting by Promit Mukherjee; Editing by Jan Harvey)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN21Q0WO-OZABS">https://af.reuters.com/article/investingNews/idAFKBN21Q0WO-OZABS</a> and is republished with its permission.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

South Africa’s Sasol cuts production, sales target due to COVID-19 lockdown

Amid the global COVID-19 pandemic and 21-day lockdown faced by South Africans, First National Bank has announced <a href="https://www.cnbcafrica.com/videos/2020/04/03/sas-banks-reveal-how-small-businesses-can-apply-for-the-r1bn-oppenheimer-fund/">additional measures to assist small and medium-sized enterprises</a> battling with funding in the country.



In addition to the implementation of financial relief systems for individual and business customers, FNB has expressed commitment towards assisting SMEs through, “alternative funding support, critical business support resources, links to various government resources and private funding initiatives.”



The following is a statement on behalf of First National Bank:



FNB extends additional help to assist SMEs with alternative funding and resource support



6 April 2020 – In addition to the various COVID-19 measures implemented to provide relief to individual and business customers, FNB has further committed to helping small businesses with alternative funding support, critical business support resources, links to various government resources and private funding initiatives.



Given the various relief interventions needed by small businesses across different sectors, FNB has launched a portal under the “COVID-19 – For My Business” menu on the FNB App or Online Banking, where SME customers in need of help can register their requests for assistance.This will enable the bank to obtain information and present potentially relevant relief solutions.



“The first phase of alternative funding that we are excited to make available to SME customers via the portal is from the South African Future Trust (SAFT), a Public Benefit Organisation established by Nicky and Jonathan Oppenheimer to extend financial assistance to employees of South African SMMEs who are at risk of losing their jobs or will suffer a loss of income because of COVID-19,” says Jesse Weinberg, Head of the SME Customer Segment at FNB.



FNB has received a range of queries from SME customers on various topics from SMEs, from assisting them with cashflow relief on their existing credit and merchant services facilities with the bank, to general requests such as resources and guidance on obtaining alternative funding support for their businesses.&nbsp;



“Requests registered by SMEs through our portal will enable us to rapidly assess the situation and requests of these businesses to determine possible financial and non-financial assistance that could help them,” adds Weinberg.



A challenge for many small and medium-sized businesses is that they often have limited access to funding, whether in the form of bank credit or alternative sources. In times of an economic down-turn or crisis, these businesses are some of the most vulnerable as they generally have less access to liquidity to weather the storm than larger businesses.



FNB SMEs can register their interest to apply for the South African Future Trust (SAFT) funding by completing the SME assessment found under the “COVID-19 – For My Business” menu on the FNB App or FNB Online Banking.



SMEs who meet the following criteria could be eligible for the funding as determined by SAFT:



<ul><li>The business has an annual turnover below R25m</li><li>The business can clearly demonstrate the impact of COVID-19 on their operations; the business must have been in good financial health prior to 1 March 2020.</li><li>The business must have been trading for at least 24 months</li><li>Confirmation of permanent employment status of employee</li><li>The business must have its main bank account with FNB and be in good standing with the bank; demonstrated sound banking behaviour maintained a good credit history</li></ul>



For more information on SAFT visit <a href="https://secure-web.cisco.com/1s3rkD1cj8AGmG18fuJ2x_AyOubeXbdWvhiXPo8wZ_fmWLNsrU01mXeBoxjCwGmtfWv0_7G5MnIEPL_jXEIIIUVQ93d3CyIARz5pRNgDbia73tmakzFlkFJDMQmUIp81qp2Ws3DkUNZlwngU0dQCKCk85ggzzNgh1omemqUvK287zcye7g3WZf8AX8ROyIEsVmeJPFiiq58tRsXlTsTvwIzxaC5SYIJB9WSr4dJcgOMy0hJ-vC35u4l02Q7YJ5XHxP25MtZ9Fq-SW1y9D2B3bt0b9czIZr6VkYTK5dqRoViPNPfbPXoJMCSr7WDOAdJxxWL66c87g7X50OzKbZGyKog/https%3A%2F%2Fopp-gen.com%2Fsaft%2F">https://opp-gen.com/saft/</a>



“As announced in President Cyril Ramaphosa&#8217;s address to the nation, we have pledged R1bn to extend a financial lifeline to employees of South African Small, Medium, and Micro-sized Enterprises (“SMMEs”). Our aim is to mitigate the immediate economic impact of the COVID-19 crisis by keeping companies in business and protecting jobs, in order to fast-track South Africa’s economic recovery after this pandemic. Our response, in collaboration with the South African Government and private sector, is to create a structure that will extend direct financial support to SMME employees who are at risk of losing their jobs or will suffer a loss of income because of COVID-19,” said Nicky and Jonathan Oppenheimer.



“In much the same way as our SME clients are dealing with unprecedented uncertainty, we too realised we also needed a different approach to respond to the crisis and try extend help our SMEs in a more holistic way,” concludes Weinberg.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Administrators propose sales plan for SA retailer Edcon, see potential job cuts

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Cyril Ramaphosa

Op-Ed: Counting the economic cost of South Africa’s lockdown

How SA’s R200bn Covid-19 loan scheme for small businesses works

How the AU plans to cushion Africa from COVID-19 crisis

These are the sectors SA is considering reopening in phase 4

SA to phase out lockdown, these are the details

PSG CEO Piet Mouton’s impassioned plea to SA’s President: act faster in lifting restrictions to rejuvenate the economy

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COVID-19: How will SA fund its R500bn economic stimulus package?

SA’s consumer inflation slows to 4.1% y/y in March – these were the main drivers

SA announces R500bn COVID-19 economic stimulus package

COVID-19: SA announces R500bn stimulus package; about 10% of GDP

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Why business should not throw in the towel in the face of COVID-19

SA extends lockdown by two weeks until end April

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South Africa’s Sasol cuts production, sales target due to COVID-19 lockdown

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