‘Rebuild from SAA’s ashes’: Eight big quotes from Mboweni’s address
That might just be the final nail in the coffin for SAA. Finance minister Tito Mboweni has explained how Mzansi will fund this economic recovery.
Cyril Ramaphosa has told the nation how South Africa will spend billions to save the economy, and Tito Mboweni was left with the less glamorous job of explaining where the cash will come from. The finance minister has detailed exactly how the government will fund this response to the global health crisis – and South African Airways (SAA) could find itself as the lamb to the slaughter.
During lockdown, business and trade has come to a standstill. We are going to need a lot of help to get through this nightmare, and it appears that the required assistance will arrive by the barrel load.
As well as generating funds domestically, SA is getting a cash injection from some of the world’s biggest financial institutions. But it would appear there isn’t enough money on the table to save SAA. Here are the highlights of Mboweni’s speech, and all the financial interventions coming our way.
Eight significant quotes from Tito Mboweni’s economic recovery address:
The real price of saving the economy revealed
“SARB have already unveiled a monetary and policy package of their own. This takes our total economy-wide measures over R800 billion. Let me say that again – our combined fiscal and monetary policy package is over R800 billion. This is a major fiscal and monetary policy response.”
Mboweni explains where the cash is going – which is good news for SASSA
“We have R20 billion in the health budget The government will substantially increase our social security net, with R50 billion going towards SASSA grants. Child support grant beneficiaries will receive an extra R300 in May.”
“From June to October, each caregiver will receive an extra R500. All other social grants will receive an extra R250 per month.”
Debt suspensions in place
“The banking sector has announced measures to postpone clients’ debt repayments. We need to think beyond the role of the state alone and keep funds in the economy.”
The Solidarity Fund is already doing its thing
“The National Credit Guarantee Scheme will be available for businesses who make R300 million or less in annual revenue. We have already spent R1bn on medical necessities by using money from the Solidarity Fund.”
Mboweni reveals IMF, World Bank to loan us money
“We are in constant conversation with the World Bank and we are entitled to a loan of up to $55-60 million (around R1 billion). We are also entitled to applying for funds from the New Development Bank. IMF has indicated that SA is eligible for $4.2bn (R77 billion).”
People are trying "to make a mountain out of an anthill" on South Africa approaching the IMF and World Bank, says Mboweni, given "we too are entitled" to those lenders' pandemic facilities that have relatively light conditions.— Joseph Cotterill (@jsphctrl) April 24, 2020
Mboweni also wants to use this opportunity to create new jobs
“Our manufacturing sector must look closely at how we can create more local goods and avoid an over-reliance on China. So, how can we reinvent the economy? How can we find employment for our youth? Maybe a mass hiring of people for anti-livestock fencing along highways, or anti-fire bricks to prevent veld fires?”
SAA is on the scrapheap
“We will need a new national carrier. Minister Gordhan spoke about building a new airline from the ashes of SAA. We must build new towns, renovate our harbours and agriculture boards.”
And finally… Tito snaps at a question he doesn’t like
“We are not in that business of printing money after we’ve provided such an elaborate explanation on how we’re gonna source funding.”