Violent protests deal a blow to the South African economy Business and Economy News


Violent protests have dealt a blow to South Africa’s efforts to rebuild the economy in the wake of the coronavirus pandemic and have been the most severe test to the authority of President Cyril Ramaphosa.

Widespread looting and social unrest after the imprisonment of former President Jacob Zuma is hurting business confidence, has altered key trade routes and has seen business doors closed from banks and supermarkets to small traders. The army has been deployed to help police calm the riots, which have killed ten people and left nearly 500 people detained.

“Concern about Zuma’s arrest is being used as an excuse for opportunistic and pure looting,” said Busisiwe Mavuso, CEO of Business Leadership South Africa, which represents many of the country’s largest companies. “Field anarchy puts another key in the coffin of our troubled 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 Gauteng country mall. The turbulence has highlighted the divisions within the ruling African National Congress and the tenuous grip that Ramaphosa has on the party.

Members of Zuma’s family have supported the violence on social media, as has his foundation, which has repeatedly denied his conviction. Zuma has avoided discontent by complaining that the charges against him are politically motivated, undermined Ramaphosa and dismissed graft claims during his government that his successor said cost the state more than 500,000. million rand ($ 35 billion).

“What is happening is sedition. It is a direct attack on state authority. It is fed by the very powerful people of the ANC who are about to be ousted, ”said Mary de Haas, a violence researcher at the University of KwaZulu-Natal Law School. “They’re using the language of incitement to get people out of companies,” he said.

On July 10, trucks caught fire in KwaZulu-Natal, prompting the closure of the N3, the highway that connects sub-Saharan Africa’s largest port in Durban with Johannesburg’s economic center. It is also the beginning of the truck routes used to transport goods to the north of the Democratic Republic of the Congo.

On Monday, shots and helicopters could be heard back in Chatsworth on the outskirts of Durban, and residents called for the creation of barricades to prevent looting of their properties.

More than 200 malls had been looted by mid-Monday afternoon and retailers had lost about 2 billion rand, according to Mavuso.

Ramaphosa appealed for calm in a televised speech Monday night, the second in two days, and warned that the riots posed a serious threat to food security and that they were disrupting efforts to inoculate people against the virus. which causes Covid-19.

“What we are witnessing now are opportunistic acts of crime, with groups of people instigating chaos only as protection against looting and theft,” he said. “The poor and the marginalized will bear the brunt of the destruction that is underway.”

Rand is weakening

The rand weakened to 2% to $ 14.5058 on Monday, the highest since Feb. 25.

“We are deeply concerned about riots, violence and risk to people and property,” said Martin Kingston, vice president of the country’s largest business group, Business Unity South Africa. “Business confidence is severely undermined as a result of these developments.”

The riots have been fueled by years of poor government services, an unemployment rate that has reached a record 32.6% and a serious inequality that populist politicians have assumed.

“We are facing the consequences of 15 years of declining state capacity, effectiveness and efficiency,” said Claude Baissac, head of Eunomix Business and Economics Ltd., which advises on political risks. “This is a search for the social explosion.”

Difficult decisions

Ramaphosa had difficult decisions to make. To bolster investor confidence and protect the economy, it must demonstrate a solid response as evidenced by its deployment of the military. But repression can further fuel unrest, especially among those who sympathize with Zuma and his allies.

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Ramaphosa has twice said that some of these acts of violence are based on “ethnic mobilization”. Zuma has played in the past for being a Zulu, South Africa’s largest ethnic group, with his fans sometimes wearing “100% Zuluboy” shirts.

The ANC has had a complicated relationship with the Zulu people. Before the end of apartheid, supporters of the Inkatha Freedom Party, a Zulu nationalist party, fought bloody battles with ANC supporters in KwaZulu-Natal and Gauteng.

“It would be very prudent in South Africa before you characterize yourself in this line,” said Ralph Mathekga, a political analyst and author of books on South African politics, referring to Ramaphosa’s comments. “It would be very prudent to legitimize some kind of ethnic cleavage.”

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