The Motsepe family and associates have joined the Rupert and Oppenheimer families in donating R1-billion to South African business to deal with the losses caused by Covid-19 and the subsequent government lockdown. Trade and Industry Minister Ebrahim Patel said that other businesses were offering to donate money to the Solidarity Fund.
The government made available an initial R150-million as seed funding and a number of businesses have contacted the department about contributing to the fund, the minister has said.
The privately-managed Solidarity Response Fund started to solicit donations the day after President Cyril Ramaphosa announced government’s seed funding, of which R100-million came from the National Treasury and R50-million from the National Lotteries Commission.
Early indications were that most of its spending would be directed at measures to slow the spread of the coronavirus, and then towards individuals. However, the fund is expected to further spend its money via small businesses where possible, and it may also provide some form of assistance to big businesses, if only through advice.
Johan Rupert tops the 2020 Bloomberg Billionaires Index as the richest South African. The index features the 500 richest people in the world. South Africa has three representatives, including Rupert ranked at number 242 in the world with a net worth of $7.38-billion.
Second is Nicky Oppenheimer at number 243. He sold his family’s 40% stake in De Beers, the world’s biggest diamond producer, to mining company Anglo American in 2012 for $5.2-billion in cash. He maintains private equity investments in Africa, Asia, the US and UK through Stockdale Street in London and Johannesburg-based Tana Africa Capital.
US-based Natie Kirsh is worth $6.16-billion, which puts him in 312th place. The bulk of Kirsh’s fortune comes from Jetro Holdings, which owns restaurant supply stores Jetro Cash and Carry and Restaurant Depot. He also found a successful group of food and beverage companies in the US.
Patrice Motsepe is one of the world’s 1,000 richest people. His net worth is estimated at $2.6-billion.
The Motsepe family, in partnership with organisations that they are associated with, have pledged via the Motsepe Foundation, including Sanlam, African Rainbow Capital (ARC), and African Rainbow Minerals (ARM).
Motsepe said: “Several hundred million rands will immediately be made available with the primary objective of saving lives and slowing and restraining the spread of the coronavirus.”
The Muslim Community of South Africa has already donated R1-million to help the Solidarity Fund achieve its goals of aiding the poor and vulnerable during the 21-day lockdown.
The ministry of small business has planned a Business Resilience Facility, with the implication that debt relief and similar measures would be available.
These plans appear to be entirely separate from measures announced by the president, which include R8-billion in tax credits for lowest-paid workers over the next four months, and a partial tax holiday for some businesses.
Banks have specifically been excluded from provisions of the Competition Commission, which forbid coordination among competitors, so they can come up with joint plans to help individuals and companies.
Standard Bank initially announced that small businesses and students would be afforded a three-month debt repayment holiday. However, the bank announced a second wave of relief on 28 March, saying it will extend instalment relief measures to personal account customers.
The payment reprieve is aimed at easing the financial burden of customers earning R7,500 or less, who will receive three-month instalment relief if they are not in arrears on any of their accounts (as at 31 March), the bank said.
“This relief applies to qualifying customers and their associated accounts, which include home loan, vehicle and asset finance, credit cards as well as short-term loans. Customers who opt for the relief will see their interest and bank charges capitalised over the term of their loan agreements.”
Furthermore, the banking sector has collectively decided to waive Saswitch fees during the lockdown. This means that a customer can use any ATM, including those offered by competing banks, without any extra fees.
Standard Bank says it will continue to evaluate the current financial climate with a keen focus on how the bank can continue to guide consumers through these difficult economic times.
Nedbank has also jumped on the bandwagon, stating it will offer all clients “individual solutions to cash flow challenges” due to the coronavirus.
Absa said in reply to a Business Maverick tweet that, “Customers are encouraged to approach us proactively in the event of uncertainty, including financial distress, during these unprecedented times.”
In a press release issued on 23 March, FNB reaffirmed that the bank continues to work with the Banking Association of South Africa, in engaging with the Reserve Bank and government on a variety of solutions aimed at supporting consumers and businesses during these times.
Other organisations across the spectrum have been joining the rescue party. Huawei announced that it will hand over R1-million to assist SA’s Covid-19 fight. The technology giant has donated R1-million to the department of health.
And the South Africa-China Economic and Trade Association contributed R2-million.
“The money will be used for testing and managing the outbreak,” said Health Minister Zweli Mkhize at the Chinese embassy in Pretoria earlier this month.
The water bottling enterprise aQuellé has donated R500,000 to the Solidarity Fund.
CoreShares, the passive investment management business specialising in index-tracking solutions, announced that it will invest all profits from its exchange-traded funds into the Solidarity Fund over the 21-day lockdown period.
The African Development Bank Group has raised an exceptional $3-billion in a three-year bond to “help alleviate the economic and social impact the Covid-19 pandemic will have on livelihoods and Africa’s economies”.
Black entrepreneurs can also look forward to between R500,000 and R10-million in concessionary loans from the Dti and the National Empowerment Fund to purchase machinery, equipment and raw materials and to fund other working capital requirements for the manufacture and supply of medical masks, sanitisers, dispensers and related healthcare products.
A recent media statement reveals that a total of R200-million has been set aside for the purpose, and once disbursed, black entrepreneurs will be accorded a 12-month repayment holiday to help their businesses stabilise. The loans will be offered at 0% interest for the first year and thereafter at 2.5% per annum. The loans will be repayable over a maximum term of 60 months.
That said, there is still a lot of room remaining for relief efforts in South Africa as especially smaller businesses and informal workers start feeling the big burn.
As Max du Preez, founding editor of Vrye Weekblad, says on Twitter:
Thanks for the R1bn for #COVID9, Motsepe, Rupert & Oppenheimer. SA has many other billionaires: Ivan Glasenberg, Koos Bekker, Michiel le Roux, Douw Steyn, Stephen Saad, Jannie Mouton, Laurie Dippenaar, Raymond Ackerman, Adrian Gore, GT Ferreira, Christo Wiese et al. Let us know?
— Max du Preez (@MaxduPreez) March 28, 2020
Ring of Fire as performed by Johnny Cash was actually written by June Carter.