By Chris Bishop



This week, on May 5 at 1400 CAT to be precise, CNBC Africa will be stepping into a new era by hosting its first ever virtual panel discussion that will not only be beamed live to 16 million households across Africa, but also will be on zoom.



It will be called Business Tomorrow and will focus on the revival of business in Africa whenever the COVID-19 pandemic lifts and allows commerce to breathe. Predictions are grim – more than a million jobs are expected to be lost and tens of thousands of companies are likely to go to the wall.



So, when we discussed in the newsroom this week the first topic for the first discussion it a no brainer – small business. These foot soldiers of the economy are likely to bear the brunt of the hard times – many were struggling long before the pandemic and the downgrade to junk status by the rating agencies.



Into this discussion will be throwing one word that is my pet topic – industrialization. I think this is a good way to create wealth on the way out of a desperate spot by making goods and parts and pieces that the world needs and can be exported to earn hard currency.



Now politicians throw the word industrialization around all the time, after all, it sounds good in speeches – I often wonder whether policy is as good.



A new generation of industrialists is scarce, but more scarce is the investment and backing from the banks to make it happen and maybe also the will among entrepreneurs to get their hands dirty.



I have been interviewing and studying entrepreneurs in Africa for more than a quarter of a century and I have often wondered whether is the lack of will on the side of many entrepreneurs to get down into the grimy world of industry. After all, it is not as sexy as IT, or the digital world, and it is less likely to get you into the glossy magazines on TV chat shows.



But it is rewarding and long term and people will always need fashioned metal until the day you can email a machine to a factory or 3D print it.



A distant part of my family is a testament to this and has been fashioning metal profitably for the nearly 200 years.



My great-great-great grandfather Stephen Grainger started out, with virtually nothing, in his poor back yard in a place called Dudley in the Black Country in the English midlands – so called because, even when I was a child, most of the buildings were blackened with industrial smoke. It was a hive of steam, tapping and welding and out of the Black Country came the world’s machines, tools, grinders, smelters, guns, cars and motorcycles



Stephen Grainger had little education, but a burning desire to make it as an industrialist and started out by dragooning his family into swinging hammers all day to make nails in the back yard. The family worked hard to build the wealth down the generations. My great-grandfather William worked as a striker – the skilled man who swings the sledgehammer for the blacksmith – in the Grainger factory.



All along the profits were invested to build small factories – one of which is working away as I write this in the Black Country nearly 200 years after the family made its first nail.



I went to see the family factory about 25 years ago and my relatives showed me proudly the many boxes full of little metal clips for shop shelves everywhere from Hong Kong to Sydney. It lacks glory, maybe, the family is never likely to make the cover of a glossy magazine, but they’re always likely to make money. The industrial enterprise has fed thousands of people in the last two centuries. Maybe many entrepreneurs and families in Africa can turn the same humble beginnings into a solid industrial base that is probably needed more now than ever.

Chris-Bishop1-e1386950379894[1]

Opinion : Could Industrialists lead the way up and out of COVID-19?

April 29 (Reuters) &#8211; Investment holding firm PSG Group Ltd said on Wednesday it was “seriously considering” separating its stake in Capitec Bank to avoid an increase in administrative burden under a new legislation that may deem it a status of financial conglomerate.



PSG Group is the largest shareholder in Capitec Bank, with a near 31% stake. PSG has a market capitalisation of ZAR 36.92 billion ($2.00 billion).



($1 = 18.4924 rand)



(Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/commoditiesNews/idAFL3N2CH1W4">https://af.reuters.com/article/commoditiesNews/idAFL3N2CH1W4</a> and is republished with its permission.

SA’s PSG Group considers unbundling stake in Capitec Bank

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



<ul class="wp-block-list"><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 class="wp-block-list"><li>Have a turnover under R300 million per annum</li></ul>



<ul class="wp-block-list"><li>Be in good standing with their bank, prior to the onset of the Covid-19 pandemic</li></ul>



<ul class="wp-block-list"><li>Be registered with the tax authority</li></ul>



<ul class="wp-block-list"><li>Have insufficient normal borrowing capacity to fully fund its monthly operating expenses</li></ul>



<ul class="wp-block-list"><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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During the recent gloomy days of being confined to one’s house due to the national lock-down and practising social distancing, renowned cartoonist Zapiro has been busy creating hilarious and sharply truthful cartoons of the Covid-19 virus in South Africa. Zapiro joins CNBC Africa for more on the impact that Covid-19 is having on his business and how he is coping with the lock-down.

Renowned cartoonist Zapiro on how the coronavirus crisis impacts his work

The South African National Treasury is replacing measures relating to the <a href="https://www.cnbcafrica.com/covid-19/">COVID-19</a> Disaster Management Central Emergency Procurement Strategy.



The replacement follows concerns about the procurement process, stating that the approach adopted has excluded a number of domestic suppliers and has covered too wide an array of goods, especially goods that can be manufactured locally.



The following statement provides more information:



Measures for COVID-19 emergency procurement



National Treasury is replacing measures relating to Covid-19 Disaster Management Central Emergency Procurement Strategy, namely Instruction Note 3 of 2020/21 and Circular 101. The new measures will be Instruction Note 5 of 2020/21 for PFMA institutions and Circular 102 for MFMA institutions. The new Instruction Note and Circular will be on the National Treasury website soon.



The replacement follows various representations that have raised concerns about the procurement process, that the approach adopted has excluded a number of domestic suppliers and that it covered too wide an array of goods, especially goods that can be manufactured locally. The replaced Instruction Note and Circular were an initial response to the outbreak of the pandemic, and was to allow for urgent procurement of critical health products at a time of great global shortages. Given the rapid changes in demand for specialised products like testing kits and ventilators and further exacerbated by export bans, a national regulatory approach to procure goods centrally was required.



The Covid-19 pandemic has brought about a new environment, necessitating procurement regulations to keep up with the rapid changes of demand. In the past few weeks there has been an increase in the number of companies able to respond to the emergency procurement needs.



National Treasury is fully committed to the Constitutional objective of having fair, equitable, transparent, competitive and cost-effective procurement processes that take into account the need for procuring essential health products required to fight the COVID-19 pandemic. These processes should be compliant with the country’s imperatives of promoting structural transformation and broadening participation in the economy to strengthen economic development and empowerment of previously disadvantaged groups and individuals.



In response to the changing demand and supply as well as to give effect to the strict monitoring and reporting measures required during times of emergency procurement, the new Instruction Note and Circular will:



<ul class="wp-block-list"><li>provide measures to put in place for COVID-19 emergency procurement</li><li>open the supply of these products to all suppliers conforming to specifications and are registered on the Central Supplier database (CSD) of government. https://secure.csd.gov.za/]</li><li>outline the required PPE item specifications according to the Department of Trade, Industry and Competition (DTIC), National Department of Health and World Health Organisation requirements</li><li>outline the maximum prices at which government will procure these PPE items</li><li>outline the emergency procurement, monitoring and reporting requirements</li></ul>



Issued by National Treasury



Date: 28 April 2020



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

International travel for South Africans is now allowed, this is how it will work

SA National Treasury introduces new measures for COVID-19 emergency procurement

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The fight against COVID-19 must include a climate change strategy that rebuilds stronger, inclusive economies geared for low carbon growth. That’s according to Former Nigerian Finance Minister and MD of the World Bank Dr Ngozi Okonjo-Iweala who was recently appointed to the WHO’s Covid19 special envoy. This follows her appointment to the African Union’s COVID-19 envoy earlier this month. Dr Okonjo Iweala joins CNBC Africa for more.

Ngozi Okonjo-Iweala on why climate change should be part of Africa’s COVID-19 strategy

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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

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The African Economic Research Consortium (AERC) has noted that the social and economic issues in Africa that were already highly fragile have now become increasingly more serious due to the current COVID-19 health crisis. The organisation has developed some solutions that may aid African economies during these times. Professor Njuguna Ndung&#8217;u, Executive Director of African Economic Research Consortium joins CNBC Africa for more.

AERC on how fragile African economies can survive the COVID-19 crisis

By Zaynab Mohamed – Political Analyst



After Prime Minister Thomas Thabane deployed the army on the streets of Maseru over the weekend, South African mediators were sent to ease the tensions.



Two-day talks between stakeholders were concluded, with Deputy Prime Minister Monyane Moleleki and South African mediator Jeff Radebe signing an agreement which stated that, among other things, the processes of Parliament must continue to ensure that Mr Thabane will leave office with “dignity, grace and security”.



Mr Radebe told journalists that the “timeline is immediate” for Mr Thabane’s exit.



Mr Thabane, however, does not agree. The 80-year-old prime minister fired back in an interview published in the Lesotho Times on Thursday, April 23, saying, “People that I don’t report to [are] setting the time for my departure, their own convenient time. They have no right to do so … I don’t understand what all this rush is about. I am not going to give in to their demands.”



When the army was deployed, there were rumours that Police Commissioner Holomo Molibeli had been arrested. It later emerged that, although Mr Molibeli was not arrested, Mr Thabane did, in fact, order his arrest and that of two of his subordinates, but Lieutenant General Mojalefa Lesoela, the commander of the Lesotho Defence Force, refused to carry out this order.



Mr Thabane earlier (unsuccessfully) attempted to fire Mr Molibeli after he charged Mr Thabane with playing a part in the murder of his ex-wife Lipolelo Thabane.



The deal to form a new coalition government signed by the All Basotho Congress (ABC) and the Democratic Congress (DC) is now supported by enough MPs to guarantee the 61-seat threshold. Two of Mr Thabane’s current coalition partners, the Basotho National Party (BNP) and the Reformed Congress of Lesotho (RCL), support the ABC-DC coalition and so does a smaller opposition party, the Popular Front for Democracy (PFD).



Now that parliamentary proceedings can go ahead, steps towards the vote of no confidence are being taken.



The Senate will be sitting on Friday, April 24, to approve an amendment bill which advises King Letsie III to dissolve Parliament if Mr Thabane loses a vote of no confidence. Once approved by the Senate, the amendment bill will then have to be signed into law by King Letsie.



Then the lower house will sit for the vote of no confidence, which Mr Thabane looks certain to lose.



By deploying the army to restore order, Mr Thabane showed his willingness to resort to violence, but with General Lesoela refusing to carry out his orders, bloodshed was avoided this time.



With all odds against him – a murder case, a vote of no confidence, and a disobedient army boss – we would assume that Mr Thabane would have cut his losses by now.



However, he still stands firm, making us wonder what he still has planned for the mountain kingdom.

Op-Ed: Thabane puzzled by “all this rush”

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This week we are looking at managing and coping with the financial burden that is left in the wake of the COVID-19 pandemic. Joining CNBC Africa to unpack finance savvy tips and recommendations for individuals during this time is Katlego Mei, Financial Planner at Verso Wealth.

How to best manage your finances during the COVID-19 pandemic

Business & markets reacts to Ramaphosa’s R500bn COVID-19 stimulus plan

Business & economists react to Ramaphosa’s R500bn COVID-19 stimulus plan

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The COIVD-19 global pandemic is leaving individuals to face the social impact of the pandemic such as unemployment, business closures and pay cuts which are creating huge financial strains on citizens. South Africa is of particular concern with high unemployment rates and a cure needed for economic recovery, CNBC Africa is joined by financial wellness coach Samke Mhlongo, Founder and Chief Executive of The Next Chapter for more on how individuals should be planning in these difficult times.

How should you handle your finances during the COVID-19 crisis?

SA President Ramaphosa announces R500bn COVID-19 relief plan (full speech)

By Chris Bishop



The good news is South Africa’s dark load shedding days could be over as another bleak winter looms. The bad news is maybe not for long because of more than a decade of low maintenance at Eskom’s creaking, ageing, coal-fired power stations; plus design problems at the new ones.



If you are wondering why there have been no power cuts over the last few weeks, the lockdown for COVID-19 has seen a huge dip in demand, for the 30,000 MW in the national grid, of between 6,000 and 9,000 MW. That is enough power to light up three cities the size of Johannesburg&#8230;



The lockdown means Eskom has been able send more gangs of maintenance workers into power stations across the land to mend and restore some of the broken and run down equipment.



“During these past three weeks we have doubled our maintenance from more than 4 200 MW to 9 500 MW. This will put Eskom in a good place to meet rising demand and generate electricity without resorting to load shedding. Even though it is impossible to make guarantees about load shedding,” &nbsp;&nbsp;says SIkonathi Mantshantsha, the spokesperson for Eskom.



A lot also rides on changes to the new coal-fired power stations, Medupi and Kusile, in the country’s northern Limpopo province. &nbsp;Foundations were laid more than a decade ago, but the power stations were full of problems as well as being behind time and over budget. &nbsp;



“We must caution the people of South Africa always that our equipment and our generators are quite unreliable and old. So we can never give guarantees until we have fixed the design faults at our new power stations at Kusile and Medupi. Then, once we have done that, we hope never to use the world load shedding again” says Mantshantsha.&nbsp;



Yet, Chris Yelland, an electrical engineer&nbsp; who has been analysing Eskom for more than 20 years, says the maintenance is merely what is merely what is known in the trade as “opportunistic maintenance” that can be done quickly and at short notice and may not last long. He likened it to patching a bicycle puncture instead of fitting a new tyre. &nbsp;



“It will be merely fixing patching up boiler tubes and mending water and oil leaks,” says Yelland. &nbsp;



“What has not been done for years is a major overhaul; this requires a shutdown so you can open up the boilers, turbines and does what they call deep level maintenance. It is something that is expensive and takes a lot of planning. You need to bring experienced specialists from the equipment manufacturers, from around the world. You need to have spare parts on standby.”



Yelland says the maintenance that has been done is good news for the national grid, but questions how long South Africa’s creaking power stations can struggle on.   



By Chris Bishop



The good news is South Africa’s dark load shedding days could be over as another bleak winter looms. The bad news is maybe not for long because of more than a decade of low maintenance at Eskom’s creaking, ageing, coal-fired power stations; plus design problems at the new ones.



If you are wondering why there have been no power cuts over the last few weeks, the lockdown for COVID-19 has seen a huge dip in demand, for the 30,000 MW in the national grid, of between 6,000 and 9,000 MW. That is enough power to light up three cities the size of Johannesburg&#8230;



The lockdown means Eskom has been able send more gangs of maintenance workers into power stations across the land to mend and restore some of the broken and run down equipment.



“During these past three weeks we have doubled our maintenance from more than 4 200 MW to 9 500 MW. This will put Eskom in a good place to meet rising demand and generate electricity without resorting to load shedding. Even though it is impossible to make guarantees about load shedding,” &nbsp;&nbsp;says SIkonathi Mantshantsha, the spokesperson for Eskom.



A lot also rides on changes to the new coal-fired power stations, Medupi and Kusile, in the country’s northern Limpopo province. &nbsp;Foundations were laid more than a decade ago, but the power stations were full of problems as well as being behind time and over budget. &nbsp;



“We must caution the people of South Africa always that our equipment and our generators are quite unreliable and old. So we can never give guarantees until we have fixed the design faults at our new power stations at Kusile and Medupi. Then, once we have done that, we hope never to use the world load shedding again” says Mantshantsha.&nbsp;



Yet, Chris Yelland, an electrical engineer&nbsp; who has been analysing Eskom for more than 20 years, says the maintenance is merely what is merely what is known in the trade as “opportunistic maintenance” that can be done quickly and at short notice and may not last long. He likened it to patching a bicycle puncture instead of fitting a new tyre. &nbsp;



“It will be merely fixing patching up boiler tubes and mending water and oil leaks,” says Yelland. &nbsp;



“What has not been done for years is a major overhaul; this requires a shutdown so you can open up the boilers, turbines and does what they call deep level maintenance. It is something that is expensive and takes a lot of planning. You need to bring experienced specialists from the equipment manufacturers, from around the world. You need to have spare parts on standby.”



Yelland says the maintenance that has been done is good news for the national grid, but questions how long South Africa’s creaking power stations can struggle on. 



“You are talking about old plants, in pushing that plant you really are doing damage…For the past decade, this maintenance has not been done by the book. It is like servicing a car, the cost of not servicing costs more in the long term than servicing it.”

A baptism of fire for new Eskom boss Andre de Ruyter

No more power cuts?  Yes, but for how long?

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A number of JSE listed companies are delaying the publication of financial results and annual reports, saying COVID-19 lock-downs are making it hard for their auditors to conduct a proper audit process. Joining CNBC Africa for this discussion are Tara Smith, Department of Professional Practice in South Africa at KPMG, Stephen Ntsoane, EY&#8217;s Assurance Leader for South Africa and Andrew Mackie, Managing Partner, Africa Audit &#038; Assurance, Deloitte &#038; Touche.

How the auditing profession is navigating COVID-19 shocks

South Africa’s Department of Employment and Labour announced on Monday that it had paid a total of R1.1 billion to beneficiaries of the Unemployment Insurance Fund (UIF), from April 16 to date.



As part of its response to the <a href="https://www.cnbcafrica.com/news/2020/04/21/south-african-economy-to-shrink-4-9-in-2020-sarb-to-cut-rates-in-may-poll/">COVID-19 pandemic</a>, the Department has issued a directive for relief to be provided to contributors who have lost income or required to take annual leave as a result of the <a href="https://www.cnbcafrica.com/videos/2020/04/20/african-billionaire-christo-wiese-on-covid-19-crisis-and-its-impact-on-sas-economy/">coronavirus outbreak</a>.



The following statement provides more details:



DEPARTMENT OF EMPLOYMENT AND LABOUR PAYS OUT COVID-19 BENEFITS TO WORKERS



The Minister of Employment and Labour Thulas Nxesi has called on employers who are registered with the Unemployment Insurance Fund (UIF) to apply for the Covid-19 benefits through theTemporary Employer/Employee Relief Scheme on behalf of their employees.



As part of its response to the Covid-19 pandemic, the Department has issued a directive for relief to be provided to contributors who have lost income or required to take annual leave as a result of the Coronavirus breakout.



To date, the UIF has received just over 55&nbsp;268 applications from employers representing about 1 601 767 employees. In total, the UIF has over 1 800 000 employers registered on its database representing more than 8-million workers.



Of the received applications, the UIF has processed 37 673 employer applications which means that 606 462 employees will receive their benefit.&nbsp; About 9 938 applications couldn’t be processed due to errors and the affected companies have been notified to correct their applications and resubmit. Some of the errors identified relate to incorrect banking details, making it impossible for payments to be processed.



As of today, the cumulative amount paid from April 16 to date is R1.1-billion.



“The UIF is working round the clock to meet the extraordinary volumes of requests for assistance presented by the Covid-19 pandemic. The Covid-19 benefit scheme will provide much needed relief to employees who have been laid off work or unable to earn an income due to Covid-19,” said Minister Nxesi.



Minister Nxesi has also acknowledged that the UIF system is under pressure as the Fund is currently experiencing extraordinary volumes of requests due to the Covid-19 pandemic. The Minister says the department is in discussion with other public entities and the private sector to build additional capacity in order to fast track the processing of applications and payments thereof.



“We have acknowledged that our system was not designed to accommodate the increased volumes of requests that we are witnessing due to the Covid-19. We have already taken steps to mitigate this risk. We have asked the South African Revenue Service to work with us to resolve the backlog we are currently experiencing. SARS has responded positively and they are sending a team to work with the UIF to ensure that we distribute funds to deserving beneficiaries as swift and cost-efficient as possible. We have equally engaged other private sector companies to work with UIF to enhance the capacity of our IT system to respond to the growing number of requests,” said Minister Nxesi.



Besides the COVID-19 TERS benefits, the department continues to pay normal benefits. To this end, people who have already been approved to claim do not need to phone or go online. The continuation benefits will be paid at specified dates.



As part of being more responsive to claimants, the UIF call center which initially had 75 agents, has increased its capacity and now has 200 agents manning the toll-free number (0800 030&nbsp;007). More call center agents will be added should the need arise.



“These are important interventions that would go a long way towards alleviating some of the challenges we have been experiencing. The President has enjoined all of us to ensure that citizens are not unnecessarily inconvenienced as a result of the pandemic. As the Department of Employment and Labour we realise the critical role we have to play and we are encouraged by the spirit of solidarity both in the public and private sector and we are doing our utmost best to ease the hardship on workers,” concluded Minister Nxesi.



Employers can apply via <a href="http://www.ufiling.co.za/">www.ufiling.co.za</a> or contact the UIF on 0800 030&nbsp;007.



Issued by the GCIS on behalf of the: Department of Employment and Labour



20 April 2020



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

South African Labour Department pays out R1.1 billion COVID-19 benefits to workers

By Vuyani Ndaba



JOHANNESBURG (Reuters) &#8211; South Africa’s <a href="https://www.cnbcafrica.com/news/2020/04/15/poor-wealth-forecasts-for-south-africa-due-to-covid-19-sa-wealth-report/">economy will contract sharply this year</a> as activity is hit by the coronavirus outbreak, despite expectations the <a href="https://www.cnbcafrica.com/videos/2020/04/20/why-sarb-should-step-in-to-save-sa-companies-that-are-too-big-to-fail/">central bank</a> will cut interest rates again in May, a Reuters poll found on Monday.



The country is <a href="https://www.cnbcafrica.com/videos/2020/04/20/covid-19-martin-kingston-on-how-to-flatten-sas-recession-curve/">already in recession</a>, with the economy expected to have contracted 1.9% last quarter and to shrink an unprecedented 23% this quarter, the poll showed.



<a href="https://www.cnbcafrica.com/videos/2020/04/14/sarb-cuts-rates-by-100-basis-points-to-record-low/">Another rate cut from the central bank</a> &#8211; which cut 100 basis points from borrowing costs on March 19 and then again on April 14 &#8211; is expected to help the finance ministry, which has already ramped up borrowing.



Economists now expect the economy to shrink 4.9% this year before recovering with 2.0% growth next year. Last month’s survey had suggested 0.3% and 1.2% expansions, respectively.



The forecasts showed huge levels of uncertainty due to a <a href="https://www.cnbcafrica.com/coronavirus/2020/04/09/sa-extends-lockdown-by-two-weeks-until-end-april/">country-wide lockdown</a>. Even the most optimistic <a href="https://www.cnbcafrica.com/videos/2020/04/20/african-billionaire-christo-wiese-on-covid-19-crisis-and-its-impact-on-sas-economy/">economist forecast</a> a contraction of 1.0%, while the most pessimistic predicted a 14.6% contraction.



Base effects may play a role next year, with the most optimistic economist forecasting growth of 5.1%, but some respondents said the lockdown would make it costly and difficult to bring the economy back to normality.



With consumers staying home and global oil prices falling sharply, inflation forecasts were also cut. Prices are now expected to rise 3.8% this year and 4.5% in 2021, compared with 4.2% and 4.6% in a March poll.



That would give the South Africa Reserve Bank room to ease policy.



Nine of 15 economists polled in the past week expected interest rates to be cut by 50 basis points to 3.75% in May, while three said the Bank would cut by 25 basis points. Two expected no move, and one pencilled in a 100 basis-point cut.



“Given the scale of the SARB’s forecast revisions and that of its surprise rate cut, there is little doubt now that its hawkish reservations to cut rates have been lifted,” said Francesca Beausang, economist at Continuum Economics.



On April 14 the central bank slashed its repo rate by 100 basis points to 4.25% in an unscheduled meeting, similar to the U.S. Federal Reserve’s emergency cuts last month, to mitigate the impact of the coronavirus.



“It seems as though it is keen to cut more than any emerging markets bank to make up for its previous reservations,” Beausang added.



Meanwhile, the balance sheet of the South African Reserve Bank looks more healthy and counter-cyclical in dealing with exogenous shocks than that of the National Treasury.



Economists answering an extra question said South Africa asking for an <a href="https://www.cnbcafrica.com/news/2020/04/14/imf-approves-immediate-debt-relief-for-25-countries-amid-covid-19-crisis/">International Monetary Fund</a> rapid financing facility without conditions or the SARB increasing its purchase of bonds on the secondary market would be most effective in mitigating the country’s funding crisis during the lockdown.



Other measures favoured included the SARB issuing coronavirus or disaster bonds targeted exclusively for the lockdown period or issuing more shorter-maturity bonds.



Capital Economics said the chances of South Africa turning to the IMF were rising.



“Finance Minister Tito Mboweni ruled out the possibility of any multilateral support that comes with conditions. But the IMF’s Rapid Financing Instrument (RFI) or its new Short-Term Liquidity Line might fit the bill,” it said in a note.



The RFI provides rapid and low-access financial assistance to member countries facing an urgent balance of payments requirement, without the need to have a fully fledged programme in place.



Mboweni ruled out an IMF adjustment programme last week and said the country didn’t need budget support, despite acknowledging that there would be a deep recession this year because of the global COVID-19 pandemic.



Asking multilateral institutions, especially the IMF, for cash is deeply unpopular with a faction in the governing African National Congress and trade unions that the party uses to rally support before elections. The ANC and two allies warned Mboweni earlier this month against seeking IMF assistance.



(Additional polling by Khushboo Mittal in Bengaluru; Editing by Jonathan Cable and Hugh Lawson)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN2221Z2-OZABS">https://af.reuters.com/article/investingNews/idAFKBN2221Z2-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>

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