Treasury seeks more than R32bn to address impact of July unrest and Covid-19

15 September 2021 - 14:49
By Nonkululeko Njilo
A member of a hazardous waste clean-up crew at a warehouse targeted during looting in Durban in July. File photo.
Image: Rogan Ward/Reuters A member of a hazardous waste clean-up crew at a warehouse targeted during looting in Durban in July. File photo.

The National Treasury is asking parliament to consider approving a bill seeking urgent additional funding allocations of more than R32bn to address the impact of unrest in July and the Covid-19 pandemic for the 2021/22 financial year. 

The funding is expected to be distributed to, among other entities, the SA Special Risk Insurance Association (Sasria), which could be liable for claims of up to R20bn after the unrest in July. 

The unrest wreaked havoc in parts of Gauteng and KwaZulu-Natal. It claimed more than  300 lives and resulted in extensive damage to infrastructure, including 161 malls, 11 warehouses, eight factories, 200 shopping centres (about 3,000 stores were looted), 11 liquor outlets and 113 communication infrastructure incidents.

Sasria is the only non-life insurer that provides special risk cover to all individuals and businesses that own assets in SA.   

In a presentation on the 2021 Second Special Appropriation Bill to parliament’s select committee on appropriations on Wednesday, Treasury officials said Sasria sought  additional funding of R3.9bn to fulfil its obligation and pay out claims to the affected businesses.

“Based on a preliminary assessment undertaken by Sasria on July14, its estimation of the claims it will be liable for range between R10bn and R20bn.  

“Sasria indicated that it would require an equity injection in the event of claims amounting to R15bn.”

Deputy President David Mabuza last month promised that R2.3bn would be reprioritised from the government’s spending and made available to help businesses hit by the looting and riots. He said Sasria would fork out more than R10bn to assist businesses and this would help boost the economy. 

Other entities expected to benefit from the funding sought include the departments of social development, defence, police, and trade, industry & competition. 

A sum of R26.7bn is sought in line with President Cyril Ramaphosa's announcement to reintroduce the R350 social relief of distress grant until the end of March 2022.  

It is estimated that 13.2-million people will be eligible to receive the special grant.

“The total allocation of R26.7bn will cater for people in distress and R500m for Sassa for system enhancements to improve application and payment processes, including the strengthened eligibility assessment system.”   

The departments of small business development and trade, industry & competition submitted proposals to support businesses amounting to R300m and R2bn respectively. 

“The DTIC [department of trade, industry & competition] engaged with companies that have been affected through a survey to assess the extent of damage and type of support that may be required.” 

The bill also sets out that R250m of additional funds is proposed to be allocated to the police for the deployment of SAPS personnel to deal with the unrest. 

Meanwhile, R700m is proposed to be allocated to the SA National Defence Force (SANDF) for the deployment of military personnel to assist the police to restore order. 

The funds are also for the deployment of SANDF members for three months, as part of the Southern African Development Community Standby Force.