South Africa Unemployment Fund Plans $1.7 Billion in Virus Support

(Bloomberg) -- South Africa’s Unemployment Insurance Fund has made 30 billion rand ($1.7 billion) available to support workers who lose their jobs because of the coronavirus outbreak in the country’s biggest step yet to combat the fallout from the disease.

The stimulus follows talks between labor, government and business representatives and will tap the fund to which South African employees and employers contribute each month. The money will compensate workers for layoffs of as long as three months if companies are struggling to stay profitable.

“The funds are available,” Makhosonke Buthelezi, a spokesman for the UIF, said in an emailed response to questions.

The outbreak comes at a time when South Africa’s National Treasury is severely constrained. Finance Minister Tito Mboweni last month proposed sweeping spending cuts to trim a fiscal deficit projected to widen to an almost three-decade high. Bailouts to rescue collapsing state companies have driven up debt levels and put the nation’s last investment-grade rating in jeopardy.

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