[New post] South Africa to spend US$2.6B to help spur riot-hit economy
Staff posted: " South Africa's Treasury expects a relief package for businesses and individuals affected by this month's deadly riots to cost 38.9 billion rand ($2.6 billion). The government will spend an additional 31.2 billion rand and grant 5 billion rand i"
South Africa's Treasury expects a relief package for businesses and individuals affected by this month's deadly riots to cost 38.9 billion rand ($2.6 billion).
The government will spend an additional 31.2 billion rand and grant 5 billion rand in tax breaks, while 2.65 billion rand will be reallocated from within the budget, Edgar Sishi, the acting head of the budget office, said in an online briefing on Wednesday. The program won't require additional borrowing, Treasury Director-General Dondo Mogajane said at the briefing.
Tax collections have exceeded expectations, especially from the mining and financial services industries, and the additional revenue will be sufficient to fund the relief package, South African Revenue Service Commissioner Edward Kieswetter said.
Image by Bloomberg
At least 330 people died and thousands of businesses in the commercial hub of Gauteng and the eastern KwaZulu-Natal province were looted or burned down in unrest that erupted on July 10. The turmoil could cost the country more than 48 billion rand in lost output, Kieswetter said.
While order has largely been restored, prolonged or repeated unrest could pose risks to the nation's sovereign debt assessment, S&P Global Ratings said Monday. South Africa's debt is rated at the lowest level since it first obtained credit ratings 27 years ago. Economists see the damage shaving as much as one percentage point off economic growth this year.
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