Donations, loans & pledges: What you need to know about those billions aimed at fighting Covid-19

Ever since President Cyril Ramaphosa announced a 21-day lockdown to slow the spread of the coronavirus, South Africans have been donating time and money to the fight against the pandemic. 

This includes pledges of a billion rand or more from a number of prominent business families and companies to help limit the lockdown’s impact on the economy.

When Ramaphosa made his announcement on March 23, he said government had established a Solidarity Fund, with R150 million in seed capital from the state, to support vulnerable South Africans. The fund, which is run by the private sector, raised over R500 million in its first week from corporates and individuals. It will focus on aiding the state’s health response, humanitarian efforts and providing care for the sick. 

Ramaphosa also announced that the Rupert and Oppenheimer families had each committed R1 billion to support small businesses and their employees “in this time of crisis”. Since this announcement, three more pledges of of a billion rand or more have been made. 

Fin24 unpacks what is known about each of the contributions. 

R1 billion from Nicky and Jonathan Oppenheimer, announced on March 23

Nicky and Jonathan Oppenheimer have pledged R1 billion to support small medium and micro enterprises. The South African Future Trust was formally established with the initial R1 billion in support, the Oppenheimers said in a statement.

“The SAFT will transfer funds directly to employees of participating SMMEs, via interest-free loans where employees themselves carry no liability,” the statement read.

Any loans which are repaid to the SAFT will be used to support initiatives which focus on employment creation, until all funds are disbursed, the statement read. 

“Our aim is to enable SMMEs to significantly reduce their cash outgoings and continue operations during this time of crisis, while retaining their employees – affording these companies much-needed breathing room to make long-term decisions,” it said.

The SAFT has partnered with four of SA’s major banks – Absa, FirstRand Bank, Nedbank and Standard Bank, and the scheme is available to the clients of these banks to apply for funding.

Only businesses which were financially sustainable prior to the Covid-19 crisis qualify to apply.

“SMMEs should register their interest directly via one of these banks,” the statement read. Applications are expected to start from Friday 3 April. The partner banks have also agreed to waive normal fees in managing the SAFT scheme.

The fund hopes to continue to play a role in supporting economic growth beyond the coronavirus crisis.

For more information visit: https://opp-gen.com/saft

R1 billion from Mary Oppenheimer and daughters, announced on April 1

Mary Oppenheimer has donated R1 billion to the Solidarity Fund, along with her daughters Victoria, Rebecca, Jessica and Rachel.

“My daughters and I have thought long and hard about where we could make the greatest difference in this fight and have decided it is to support the humanitarian needs of everyone living in South Africa. So, we think that it is the Solidarity Fund which is most aligned to our concerns about basic needs, food, medicine, general care and gender abuse,” she said in a statement.

For more information visit: https://www.solidarityfund.co.za/

R1 billion from the Motsepe family and associated businesses, announced on March 28

South African billionaire and brother-in-law of Cyril Ramaphosa, Patrice Motsepe and associated companies have pledged R1 billion.

The companies and organisations include: the Motsepe Foundation, financial services provider Sanlam, African Rainbow Capital and mining company, African Rainbow Minerals, and others.

The funds will be used to purchase sanitisers, disinfectants, Personal Protective Equipment (PPE) and other equipment and resources which might be needed to deal with the pandemic, said Motsepe.

“We’ve been advised that access to water for regularly washing hands is crucial for slowing and limiting the spread of the Coronavirus. We are therefore providing water to poor rural and urban communities by purchasing water tanks (jojos), drilling and equipping for borehole water and also building sanitary facilities,” he said.

Other short- to medium-term interventions include building additional classrooms, computer centers and laboratories in all nine provinces. “[This is] to assist with the excessively high number of students per classroom in some schools; particularly in the context of the current Coronavirus pandemic and the social distancing requirements.

“Those schools in the poor rural and urban areas which do not have internet access or facilities will be assisted with study guides, scientific calculators, dictionaries and other educational equipment and facilities identified in consultation with the Department of Basic Education, school principals and teachers,” he said.

CEO of ARC, Dr Johan van Zyl, said that it is in contact with ministers, MECs, and the Solidarity Fund to identify initiatives which the company can partner with.

In a statement to Fin24, Sanlam said that the R1 billion is aimed to help, “alleviate some of the suffering today, deal with some of the big societal issues and help kick-start the economy”.

Details of the disbursements will be announced in due course. “We will be working with the relevant stakeholders, and will announce over the next few days and weeks on the pledge we have made. We can state categorically, that none of our plans includes loans,” said Sanlam.

“We are currently putting governance structures in place to ensure the effective use for beneficiaries and accountability of the funds,” it added.

R1 billion from the Rupert family and Remgro Limited, announced on March 23 

This funding will go towards helping small and medium enterprises across the country, and will be administered by Business Partners Limited, a leading risk finance company for SMEs, which is co-owned by Johann Rupert. Business Partners was established in 1981 and provides investment capital and business support to small, medium and micro enterprises.

Ben Bierman, Managing Director at Business Partners, in a statement said that distinct, separate financing programmes would be made available for sole proprietors and formalised SMEs. “We expect to make an announcement regarding the criteria, repayment terms and how to apply for finance this week,” he said in a statement. 

According to Moneyweb, the R 1 billion is a donation to a trust which Business Partners will administer for free. 

“The unfortunate reality is that Covid-19 will lead to the demise of many SMEs across the world. We believe that through the funding made possible by the Rupert Family and Remgro Limited, together with other initiatives being implemented by both the public and private sector in South Africa, we can help sustain many of the affected businesses and protect jobs for years to come,” said Bierman.

R1.5 billion from Naspers, announced on March 30

Naspers has donated R1.5billion to combat the spread of the coronavirus in the country.

Part of the donation, R500 million, will go towards the Solidarity Response Fund.

Naspers has also said it will buy R1 billion worth of personal protective equipment (PPE) and other medical supplies in China, in partnership with the Chinese government and Tencent – in which Naspers holds a 31{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} stake.

In addition to the capital and equipment being provided, Naspers has also made available its facilities to provide public health services in vulnerable communities.

The facilities are located in Cape Town – in suburbs Khayelitsha and Philippi. Government is also interested in the facilities in Alexandra near Sandton, according to Naspers SA CEO Phuthi Mahanyele-Dabengwa.

* Fin24 is part of Media24, a subsidiary of Naspers