Economic Relief in the Face of the Third Wave

This policy brief by the Institute for Economic Justice argues that South Africa's initial COVID-19 relief efforts were insufficient and poorly implemented, leading to a humanitarian crisis during the country's third wave. The document proposes an immediate R70 billion emergency relief package to support businesses, protect wages, and sustain livelihoods.

• South Africa's economy contracted by 7% in 2020, with the unemployment rate reaching a record high of 32.6% (or 43.2% using the expanded definition). By April/May 2021, approximately 10 million people and 3 million children were living in households affected by hunger.
• The original R500 billion relief package announced in April 2020 was under-utilized, with only R207 billion (41%) spent. South Africa spent only 4% of its GDP on emergency relief, which is significantly lower than the G20 average of 10%, placing the country tied for third to last among G20 nations.
• Implementation of the initial relief measures was marred by inefficiency and potential corruption. The Auditor General's third special report estimated that R26 billion was spent in ways that did not comply with supply management legislation, and the Credit Guarantee Scheme (CGS) disbursed only 10% of its planned funds due to stringent criteria and over-indebtedness.
• Certain economic sectors and demographics were disproportionately affected by the pandemic. The construction sector saw the largest reduction in turnover (6.9% fall between Q1 2020 and Q1 2021) and the largest percentage contraction in employment (19.7%). Women faced greater hardships, including increased hunger, gender-based violence, and a rise in unpaid care work due to the closure of schools and early childhood development centres.
• The Institute for Economic Justice proposes an immediate R70 billion emergency relief package for a three-month period. This package would be funded by R29.5 billion from the Unemployment Insurance Fund (UIF) surplus and R40.5 billion from the national fiscus, utilizing underspends from the original R500 billion package.
• The proposed R70 billion package consists of ten key policy priorities: sector-specific grants for tourism, farming, and construction (R7 billion); tax relief and deferrals (R4.4 billion cost, R20.9 billion deferrals); TERS wage support for approximately 1.55 million workers (R24.2 billion); social relief grants (SRD and Caregivers Allowance) at the food poverty line of R585 (R23 billion); support for informal sector workers (R1.25 billion); expanded UIF benefits (R5.3 billion); support for the Early Childhood Development sector (R1.6 billion); increased Presidential Employment Stimulus funding (R4 billion); and ramping up vaccinations (R450 million).

APA

Institute for Economic Justice (2021). Economic Relief in the Face of the Third Wave. https://iej.org.za/wp-content/uploads/2026/02/IEJ-COVID-19-policy-brief-series-4-Emergency-relief-package.pdf

Chicago

Institute for Economic Justice. Economic Relief in the Face of the Third Wave. 2021. https://iej.org.za/wp-content/uploads/2026/02/IEJ-COVID-19-policy-brief-series-4-Emergency-relief-package.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=Economic Relief in the Face of the Third Wave |date=15 July 2021 |url=https://iej.org.za/wp-content/uploads/2026/02/IEJ-COVID-19-policy-brief-series-4-Emergency-relief-package.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2021economic, author = {{Institute for Economic Justice}}, title = {{Economic Relief in the Face of the Third Wave}}, institution = {Institute for Economic Justice}, year = {2021}, month = jul, url = {https://iej.org.za/wp-content/uploads/2026/02/IEJ-COVID-19-policy-brief-series-4-Emergency-relief-package.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }