- President Cyril Ramaphosa said 1.7 million fewer people were employed in the third quarter of 2020 than in the first quarter.
- The president said more than R70 billion in tax relief was extended to businesses in distress.
- He added that, in the third quarter of 2020, the South African economy was 6% percent smaller than it was in the last quarter of 2019.
President Cyril Ramaphosa told Parliament during his 2021 State of the Nation Address (SONA) that the South African economy needed an urgent fix after the already beleaguered economy was rocked by the Covid-19 pandemic for much of last year.
The 2021 SONA was the first of its kind, with the pandemic and national lockdown at adjusted Level 3 prompting Parliament to organise a cheaper-than-usual hybrid joint sitting.
Ramaphosa used his speech to outline the ructions in the South African economy, adding that the economy - which consistently struggled to achieve growth well beyond 1% annually - shrank in size and that this was now one of South Africa’s most urgent challenges.
"First, we must defeat the coronavirus pandemic. Second, we must accelerate our economic recovery. Third, we must implement economic reforms to create sustainable jobs and drive inclusive growth. And finally, we must fight corruption and strengthen the state," said Ramaphosa.
Ramaphosa reminded members of Parliament that, in the third quarter of 2020, the South African economy was 6% percent smaller than it was in the last quarter of 2019.
"There were 1.7 million fewer people employed in the third quarter of 2020 than there were in the first quarter, before the pandemic struck. Our unemployment rate now stands at a staggering 30.8%," Ramaphosa said.
Ramaphosa said over R70 billion in tax relief was extended to businesses in distress and R18.9 billion in loans have been approved for 13 000 businesses through the loan-guarantee scheme. The loan-guarantee scheme was envisaged to provide R200 billion in assistance.
Ramaphosa highlighted the social and economic relief package introduced in April last year as a programme that would assist with kickstarting the economy as South Africa continues to navigate its way through the pandemic.
"It identified measures worth a total of R500 billion – or about 10% of our GDP – to provide cash directly to the poorest households, to provide wage support to workers and to provide various forms of relief to struggling businesses," said Ramaphosa.
He said 18 million people received additional grant payments through these relief measures, including the Unemployment Insurance Fund's Temporary Employer-Employee Relief Scheme (UIF TERS) lifting more than five million people "above the food poverty line".
"To date, more than R57 billion in wage support has been paid to over 4.5 million workers through the special UIF TERS scheme. More than R1.3 billion has been provided in support mainly for small- and medium-sized businesses," he said.