Fine line between beating the virus and saving the economy: Ramaphosa's economic adviser

South Africa must ensure it manages the spread of Covid-19 carefully, while ensuring that it does not suffer an economic catastrophe.

President Cyril Ramaphosa's economic adviser, Trudi Makhaya, said this in an interview with SABC TV news on the R500bn socio-economic relief package announced by the president on Tuesday.

Makhaya said there were different scenarios on how Covid-19 will affect the economy.

“The key guiding principle for policy is to ensure that we do not hit the worst-case scenario, so we do not have a health catastrophe, so we manage the spread of the virus carefully, and also we do not have an economic catastrophe, which is why tomorrow (Thursday) the president will give detail on how we reopen the economy,” Makhaya said.

She said some of the funding of the R500bn stimulus package would come from the prioritisation of other resources. Details on that and other aspects of the package would be confirmed on Thursday.

“Other sources of financing will be from international financing institutions, including the Brics bank, the International Monetary Fund and the World Bank,” Makhaya said.

Makhaya said Africa had been advocating very hard that Covid-19 was a global pandemic and that no country should be expected to shoulder the crisis on their own.

“The international community should come to the party and help us to have a global solution to this.

“Of course the best channel for the international community is through the international financial institutions like the IMF and the World Bank,” she said.

Makhaya said funding from international financing institutions was not going to come with the type of onerous conditions that were imposed in the past.

“Because it is a recognition that this funding is to deal with a crisis, a crisis not of our making. The interests rates will be reasonable and the terms and conditions will also be in line with the crisis mode that we are in,” Makhaya said.

She said SA had to get the economy growing in the long term to ensure it was able to repay its debts, and that the country's debt in proportion to its GDP was reasonable.

“Taking the measures to mitigate against Covid-19, at least ensure that we do not have a complete economic catastrophe, so we secure the economy that we have now.

“The next step would be to think about how we get an economy of the future that is inclusive but also generates growth. Within that, debt would have to be controlled.”