A special package of R500 million has been set aside for trade finance to import essential medical products to fight the coronavirus outbreak, Minister of Trade and Industry Ebrahim Patel announced on Tuesday.
The amount forms part of a package of more than R3 billion put together by the department of Trade, Industry and Competition and the Industrial Development Corporation, which falls within its oversight. The funds are meant to help vulnerable firms and to fast-track funding to companies that are critical in efforts to address the impact of the coronavirus, Patel said.
The minister was on Tuesday speaking at a briefing in Pretoria with ministers in the economic cluster. They laid out their action plans to mitigate the impact of the Covid-19 outbreak on the economy. This followed an announcement by President Cyril Ramaphosa on Monday that there would be a nationwide lockdown of 21 days, enforced from Thursday at midnight.
The president also announced that tax subsidies and financial support would be provided for small businesses and individuals during the crisis.
Patel weighed in on the funding from the IDC, which will support South African businesses. Apart from the R500 million set aside for essential medical products, R700 million will be made available for working capital, equipment and machinery. The funds will also be used to prioritise food security, by addressing surges in demand and to support supply chains that may be interrupted by the closure of large companies.
Working capital will be made available to ensure energy security and to support component manufacturers. "The IDC has made R3 billion available in the next quarter to support businesses during this crisis," the minister said.
Essential services which do not normally fall within the industrial sectors will also be considered to benefit from funding, Patel said.
The IDC is in contact with its business partners to consider loan repayment options and possibly deferment of due payments on a case-by-case basis. These details will be published on the IDC website later on Tuesday, Patel said.
So far the department, along with the Competition Commission have relaxed competition rules for banks during this time to support the coordination of their responses to the impact of the pandemic. They can work together to devise programmes and relief measures to assist small businesses, consumers and firms in distress, Patel said.
These measures include payment holidays and debt relief. So far Nedbank and Standard Bank have announced programmes to support clients.
A competition exemption will also be introduced for shopping mall owners to similarly coordinate in providing relief to tenants, such as rental discounts or payment holidays and limitations of evictions, the minister said. The details will be gazetted on Tuesday.
For now, these will cover personal care functions, restaurants and clothing, footware and home textiles, but the list will be expanded, the minister said.