The government is grappling with the fallout from the Covid-19 lockdown with a myriad of problems emerging from the capacity of the UIF to pay the new benefit and concern growing that the most vulnerable sections of the population have not been provided for.
Regulations on taxis and informal trading have been strongly criticised for being impractical and not thought through properly. Both were eased in new regulations published today.
The lockdown is now seven days old and has another 14 to run with the possibility of an extension. It has brought most of the economy to a sudden stop, putting millions out of work and depriving informal traders of their livelihood. While a total lockdown is widely agreed to be the most effective strategy to deal with the health crisis, governments around the world are bracing for the economic consequences.
Top among the difficulties in SA is the capacity of the UIF to pay out the special Covid-19 benefit to employees who will go without income for at least the next three weeks. While the fund has the resources to do so — it has R30bn immediately available in money market funds and other financial instruments — its administrative capacity is weak. It has additional investments to the value of R120bn, but 75% of this is invested in government bonds, which it will be unlikely to liquidate.
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