South Africa unveils 500 billion rand rescue package

South African President Cyril Ramaphosa has announced a 500 billion rand rescue package to cushion the economic blow of the coronavirus pandemic.

David Doyle reports.

South Africa's rand strengthened against the dollar early on Wednesday (April 22) after President Cyril Ramaphosa announced a 500 billion rand rescue package to cushion the continent's most industrialized economy.

In an address on national television, Ramaphosa said the current crisis requires an "economic response that is equal to the scale of the disruption it is causing." That response is equivalent to 10% of GDP, and has seen Pretoria approach global finance institutions such as the World Bank, International Monetary Fund and African Development Bank - primarily to fund healthcare interventions.

The rest of the package is made up of 130 billion rand from reprioritised spending and other local sources and 200 billion in loan guarantees in partnership with the central bank, finance ministry and commercial banks.

Sub-Saharan Africa's worst-hit nation responded firmly to the global crisis with Ramaphosa implementing some of the toughest measures anywhere in the world.

They included a five-week lockdown with the army deployed to enforce it, a ban on alcohol sales and mass testing.

While the measures appear to have been effective they have also wreaked havoc on an economy already in recession - threatening to push South Africa's poor deeper into poverty.

South Africa's largest trade union federation had urged the government to fund a roughly one trillion rand stimulus plan to prevent unemployment, in a country where a third of the population are out of work, rising above 50%.

Ramaphosa resisted that call, but has pledged to prioritize the quote "relief of hunger and social distress across our communities" including by increasing child-support grant payments and paying special benefits to those who are unemployed.