AN EMERGENCY RESCUE PACKAGE FOR SOUTH AFRICA IN RESPONSE TO COVID-19

The Institute for Economic Justice argues that the South African government's R41 billion rescue package is insufficient to counter a projected GDP fall of 6% to 8%. The brief proposes a total intervention of R411.5 billion, comprising R310 billion for direct economic injection and R100 billion for tax and payment deferrals. Key recommendations include a once-off Universal Basic Income (UBI) of R4,500 for all adults, expanded social grants, and a scaled-up wage support scheme (TERS) to prevent mass unemployment. To stabilize the macroeconomy, the brief suggests the South African Reserve Bank (SARB) continue purchasing bonds, implement capital flow management, and secure dollar swap lines with the US Federal Reserve. Financing options include special COVID-19 bonds, solidarity taxes on high earners, and the deployment of UIF surpluses. The document also advocates for South Africa to lead a G20 coalition to secure better financing terms and debt relief for emerging markets and least developed countries.

• South Africa's real GDP for 2020 is forecast to decline by 6% to 8%, with potential job losses of up to 1 million, rendering the government's R41 billion rescue package insufficient.
• An initial injection of at least R310 billion is required to offset the minimum predicted GDP fall, with an additional R100 billion needed to facilitate tax and payment deferrals.
• The proposed rescue package includes a once-off Universal Basic Income (UBI) payment of R4,500 for all adults (approximately 39 million people) in May 2020, costing R150 billion.
• To prevent widespread destitution, the brief recommends increasing all social grants by R500 for three months and providing an emergency mid-month payment of R500 in April 2020.
• The current COVID-19 Temporary Employee / Employer Relief Scheme (TERS) is limited by its sliding scale and UIF registration requirements; the brief proposes increasing the minimum payout to reflect the national minimum wage (~R4,045 per month) and expanding coverage to 3-4 million claimants.
• Macroeconomic stabilization requires the SARB to continue secondary market bond purchases, implement targeted capital flow management to handle outflows, and secure dollar swap lines with the Federal Reserve.
• Proposed funding sources include a special COVID-19 bond for private institutional investors (R100bn), the use of UIF bonds and money-market funds (R108bn), and solidarity taxation on individuals earning above R1 million.
• The brief suggests a 'solidarity tax' for high earners, including removing retirement fund deductions for those earning above R1 million (R30.5bn) and increasing effective income tax rates by 5% for the same group (R17.2bn).
• South Africa should advocate for a global financial architecture shift, including a 1% transfer of debt monetisation from the EU, Japan, and US to developing economies and an increase in IMF Special Drawing Rights (SDRs) by 500 billion.

APA

Isaacs, G. (2020). AN EMERGENCY RESCUE PACKAGE FOR SOUTH AFRICA IN RESPONSE TO COVID-19. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2026/02/IEJ-COVID-19-policy-brief-series-1_2.pdf

Chicago

Isaacs, Gilad. AN EMERGENCY RESCUE PACKAGE FOR SOUTH AFRICA IN RESPONSE TO COVID-19. Institute for Economic Justice, 2020. https://iej.org.za/wp-content/uploads/2026/02/IEJ-COVID-19-policy-brief-series-1_2.pdf.

Wikipedia

{{cite report |last1=Isaacs |first1=Gilad |title=AN EMERGENCY RESCUE PACKAGE FOR SOUTH AFRICA IN RESPONSE TO COVID-19 |publisher=Institute for Economic Justice |date=17 April 2020 |url=https://iej.org.za/wp-content/uploads/2026/02/IEJ-COVID-19-policy-brief-series-1_2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{isaacs2020emergency, author = {Isaacs, Gilad}, title = {{AN EMERGENCY RESCUE PACKAGE FOR SOUTH AFRICA IN RESPONSE TO COVID-19}}, institution = {Institute for Economic Justice}, year = {2020}, month = apr, url = {https://iej.org.za/wp-content/uploads/2026/02/IEJ-COVID-19-policy-brief-series-1_2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }