Violent protests hit South Africa’s economy hard | Business and Economy News
The violent protests have dealt a blow to South Africa’s efforts to rebuild the economy in the wake of the coronavirus pandemic and are the most severe test to date for President Cyril Ramaphosa’s authority.
Widespread looting and social unrest that followed the imprisonment of former President Jacob Zuma has eroded business confidence, disrupted major trade routes and has seen businesses from banks and supermarkets to small traders shut down. The army was deployed to help police quell the unrest, which claimed the lives of 10 people and saw nearly 500 arrests.
âThe concern over Zuma’s arrest is being used as an excuse for outright and opportunistic looting,â said Busisiwe Mavuso, managing director of Business Leadership South Africa, which represents many of the country’s largest companies. “Lawlessness on the ground puts another nail in the coffin of our struggling economy.”
Violence erupted in the eastern province of KwaZulu-Natal after Zuma was arrested on July 7 to begin a 15-month sentence for contempt of court and quickly spread to the country’s commercial center, Gauteng. The unrest highlighted divisions within the ruling African National Congress and Ramaphosa’s tenuous hold over the party.
Members of Zuma’s family have endorsed the violence on social media, as has his foundation, which has repeatedly denounced his conviction. Zuma stoked the discontent by complaining that the charges against him are politically motivated, undermined Ramaphosa and dismissed allegations of corruption during his reign which his successor said cost the state more than $ 500 billion. rand ($ 35 billion).
âWhat is happening is sedition. It is a direct attack on the authority of the state. It is fueled by very powerful people within the ANC who are about to be sidelined, âsaid Mary de Haas, researcher on violence at the University of KwaZulu School of Law. -Native. They “use the language of incitement to get people to loot businesses,” she said.
On July 10, trucks were set on fire in KwaZulu-Natal, causing the closure of the N3, the highway connecting the largest port in sub-Saharan Africa to Durban and the economic hub of Johannesburg. It is also the beginning of the trucking routes used to transport goods as far north as the Democratic Republic of the Congo.
Gunshots and helicopter rides were heard on Monday in Chatsworth, on the outskirts of Durban, and residents called for barricades to be put up to prevent looting of their properties.
More than 200 malls had been looted by mid-afternoon on Monday and retailers had lost around R 2 billion, according to Mavuso.
Ramaphosa called for calm in a televised address Monday night, his second in two days, and warned that the riots posed a serious threat to food security and disrupted efforts to vaccinate people against the virus that causes Covid-19.
“What we are seeing now are opportunistic acts of crime, with groups of people inciting chaos simply as a cover for looting and theft,” he said. âThe poor and marginalized will bear the ultimate weight of the ongoing destruction. “
The rand weakened as much as 2% to 14.5058 for the dollar on Monday, the highest since February 25.
âWe are deeply concerned about riots, violence and the risks to people and property,â said Martin Kingston, vice president of the country’s largest business group, Business Unity South Africa. âBusiness confidence is seriously shaken by these developments. “
The riots were fueled by years of poor government service delivery, an unemployment rate that hit a record 32.6% and severe inequalities gripped by populist politicians.
“We are facing the consequences of 15 years of declining state capacity, effectiveness and efficiency,” said Claude Baissac, director of Eunomix Business and Economics Ltd., which advises on risks policies. “It’s tinder for the social explosion.”
Ramaphosa had some tough decisions to make. To build investor confidence and protect the economy, it must show a strong response as evidenced by its deployment of the military. But a crackdown could still fuel unrest, especially among supporters of Zuma and his allies.
He may have already made a mistake.
Ramaphosa has twice stated that some of these acts of violence were based on “ethnic mobilization”. Zuma has in the past played on being Zulu, South Africa’s largest ethnic group, with his supporters sometimes wearing “100% Zuluboy” T-shirts.
The ANC had a complicated relationship with the Zulu people. Before apartheid ended, supporters of the Inkatha Freedom Party, a Zulu nationalist party, fought bloody battles with ANC supporters in KwaZulu-Natal and Gauteng.
“I would be very careful in South Africa before you call it that,” said Ralph Mathekga, political analyst and author of books on South African politics, referring to Ramaphosa’s comments. âI would be very careful to legitimize a kind of ethnic divide. “