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South Africa’s President Cyril Ramaphosa was told that his government needs to improve the efficiency of its unemployment relief fund and temporarily boost welfare payments to mitigate the fallout from the coronavirus outbreak at a meeting with labor and business.
At a special meeting of theNational Economic Development and Labour Council, labor union representatives told him that a 40 billion rand ($2.1 billion) fund to compensate temporarily laid-off workers is not being distributed fast enough and the 17 million people on welfare need more assistance. Nedlac includes representatives of government, labor and business.
Labor unions and business have questioned the ability of the Unemployment Insurance Fund, an existing body that compensates people who lose their jobs from a pool of money built up from employer and employee contributions, to distribute the urgently needed cash.
“The capacity of the UIF is a major, major” concern, said Matthew Parks, parliamentary coordinator for the Congress of South African Trade Unions, the country’s biggest labor group. “There is a need to increase social grants.”
South African welfare payments, particularly state pensions, are seen as a way of supporting the country’s poorest. Often a number of people depend on a single pension payout.
Ramaphosa was also told that insurers, pay-day lenders and medical aid companies need to do more to support the flailing economy, Parks said. With the country in lockdown few people are driving, burglaries are down and insurers’ profits are likely to rise, giving them room to reduce or temporarily halt charges to their clients, he said.
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“The meeting considered various suggestions on scaling up financial support to vulnerable households,” the presidency said in a statement late Friday. It “agreed there was a need for greater consistency from financial institutions such as banks when it came to relief measures to heavily indebted and struggling clients.”
South Africa’s Cabinet is due to meet on April 20 to discuss economic interventions after an April 15 meeting ended without any decisions being announced.
The country also needs to step up testing for the virus if it wants people to go back to work and to work in a safe environment, Parks said.
About 95,000 tests have been undertaken in a nation of 59 million people. To date 2,783 infections have been confirmed in South Africa and 50 people have died from the virus.
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