Home South African Economists say billions of rand lost, business productivity impacted by Monday’s disruptions

Economists say billions of rand lost, business productivity impacted by Monday’s disruptions

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Economists say that protest action during Monday’s EFF-lead national shutdown will have a long-term impact on the country’s economy.

EFF supporters during their march in Durban.
EFF members and supporters march through the streets of Durban during the party’s national shutdown protest on Monday. Picture: Doctor Ngcobo, African News Agency (ANA).

ECONOMISTS have warned that, despite mostly peaceful protests, the EFF national shutdown would have a devastating impact on the ailing South African economy.

They said a number of businesses were closed on Monday because of fear and threats of a repeat of the July 2021 unrest and looting.

Professor Bonke Dumisa, an independent economic analyst, said the economic losses due to Monday’s protest action would be significant.

“Our economy is already struggling. The fourth quarter of 2022 indicated that the South African economy GDP figures went down by 1.3%. Remember if the first quarter of 2023 shows GDP went down again, this would mean we have entered a technical recession as this means we have experienced two consecutive quarters of negative growth.”

Dumisa said billions of rand were lost on Monday as many businesses did not open.

“The EFF were boasting about this. However, the truth is the victims in all of this are the South African economy and the members of the public.

“Many people who were involuntarily part of the national shutdown were people who had to be subjected to ‘no work, no pay’. Most of them unfortunately are from low-income groups. How will they be able to make up for this? The EFF was very irresponsible for calling for this national shutdown as it is a fact that many businesses did not operate on Monday as they were fearful of a repeat of the 2021 July unrest.”

Melanie Veness, CEO of a KZN business chamber, said several businesses chose to close or work remotely because of Tuesday’s holiday.

“Safety concerns may have kept people at home on a long weekend which would certainly have had a negative impact on the economy. Any additional pressure on our struggling economy will just drive disinvestment and lead to job losses.

“How does shutting down the economy to protest against job losses make any sense at all,” Veness said.

Professor Irrshad Kaseeram, from the University of Zululand’s Economics Department, said the shutdown was a temporary disruption that caused losses in productivity and loss of income for vulnerable workers who live from hand to mouth.

“Productivity will recover in the weeks to come. However, the damage caused to the economy is long-lasting for it negatively influenced the perceptions of investors and local businesses.

“This is likely to dissuade them from investing in the future of our country and will encourage many businesses to relocate to more stable countries. It is the poorest of the poor that will suffer most.”

Kaseeram said the shutdown coupled with South Africa’s struggling economy would lead to higher sustained rates of unemployment for many years to come.

“A number of businesses anticipated the shutdown and made their workers cover the work in previous weeks. Other businesses suffered extra costs to protect their assets from possible looting. This is certainly not a business-friendly environment to operate in.”

Spokesperson for the South African National Taxi Council in KZN, Sifiso Shangase, said the shutdown had affected taxi operations on Monday.

“Our taxis were fully operational. However, the number of people taking taxis was drastically reduced. We hardly had any taxis that were full, which is not a good thing as Monday is one of the busiest days. This undoubtedly resulted in a loss of business and income for us as the taxi industry.”

In a statement on Monday night, NatJoints said that more than 550 protesters had been arrested nationally for incidents of public violence, intimidation, damage to critical infrastructure, theft and attempted looting.

Gauteng recorded the highest number of arrests with 149, followed by the Northern Cape with 95 arrests, the Eastern Cape with 80 and the Free State with 64 arrests.

NatJoints added that 24,300 tyres were confiscated across the country.

“These were tyres that were strategically placed for acts of criminality. NatJoints wishes to thank various stakeholders from members of the public and the business fraternity for working together with law enforcement to uphold and enforce the law.”

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