South Africa’s Cosatu Warns Key Virus Intervention May Stall

(Bloomberg) --

South Africa’s biggest intervention to alleviate the economic impact of the coronavirus outbreak, a 40 billion-rand ($2.2-billion) fund for laid-off workers, is being thwarted by an inability to get money to people, the nation’s biggest labor group said.

The Unemployment Insurance Fund, the body through which the relief is being channeled, hasn’t done enough to advertise the benefit to employers and workers, said Matthew Parks, the parliamentary coordinator for the Congress of South African Trade Unions. The fund shunned offers of help from the private sector, he said.

“It’s quite alarming for us. It might even be still born,” he said in an interview. “We are running out of time. It could spoil a very powerful intervention tool.”

Cosatu, the affiliates of which have 1.8 million members, is concerned about the impact of a national lockdown to combat the spread of the virus that has brought most business to a halt. South African President Cyril Ramaphosa on April 9 extended the lockdown, which began March 27, until the end of April.

The UIF has so far paid out 356 million rand from the fund, Ramaphosa said. Employers who lay-off workers are being encouraged to apply on their behalf.

Frustrated Workers

Cosatu has been angered by the government’s decision not to declare the UIF an essential service, meaning that its walk-in offices haven’t remained open. While benefits can be applied for online, Parks said many workers in manual professions don’t have internet access and aren’t computer literate. Complaints have been received from the unemployed that calls to the UIF’s phone lines aren’t being answered, he said.

The UIF hasn’t acted on a suggestion that it get the South African Revenue Service to send a message explaining the benefit to all employers and employees on its database, and could approach private companies to help it set up toll-free phone lines, Parks said.

The UIF’s spokesman didn’t respond to requests for comment sent by email and text messages outside normal business hours.

While discussions have been held between labor, business and government under the auspices of the National Economic Development and Labour Council, the UIF hasn’t explained how it will manage to distribute the benefit, according to a business representative who asked not to be identified because public comments have not been made.

While the coronavirus outbreak in South Africa has been relatively contained, with just over 2,000 known cases, the global disruption has slashed prices and demand for its exports and roiled its capital markets.

Before the lockdown extension was announced, the South African Reserve Bank estimated that the period of inactivity would result in 370,000 job losses and the closure of 1,600 businesses.

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