![]() ![]() ![]() Almost all these impacts are for the next few years as the results are not just immediate, but likely to take years to be fully realised. Early indications suggest that the real GDP growth rate for 2021 could be 0.5 – 1.0 percentage points lower than earlier estimates, suggesting that the time needed to get back to pre-Covid production levels have indeed been moved out by some more quarters.Īn aspect that is also difficult to quantify, but very real in terms of risk to the economy, is the indirect impact of the rioting and destruction. The economic growth impact is not only to be felt in 2021, but likely to filter into 2022 as well. We estimate that the overall damage will be around R60 billion to R80 billion when the flames settle. South Africa had R148bn of intermediate and R227bn of raw materials in stock at the end of Q1 2021. Some manufacturing plants also closed, and some inventory had to be discarded. Assessing destruction to be 8% to 9% as in the case of shopping malls this would mean a destruction of around R56bn of final inventory. Inventories of final goods in the private non-financial sector were estimated at R634 billion at the end of the first quarter by StatsSA. However, apart from shopping malls, there were also numerous other shops, distribution centres and factories that were damaged in addition to the N3 route being closed for nearly a week. Other exports also stopped when the harbours were closed. Coal exports stopped for just over a week, which would add a further billion to the cost. Using the proportion of shopping centres in the country that were affected as between 8% and 9% we have concluded that the cost of rebuild is in the order of R14 billion.Īdd to that the cost of about 40 trucks (and contents) that have been burnt on the N2 and N3 Highways which is estimated to be worth R500 million. While info is gradually coming to the fore, we have based a rough estimate of the direct impact of the devastation on the economy on Business Leadership South Africa’s indication that 200 shopping malls had been looted. KZN’s contribution to the country’s GDP is 16%, compared to Gauteng’s contribution of 34%. Trying to estimate the exact cost to the economy of what has played out is near impossible, as companies are still in the process of calculating losses and different institutions report different accounts of the events. Not only the direct impact of the destruction, but also the indirect impact will hover with us for some years to come. South Africa has just tentatively started to recover following the worst recession in 100 years, and the impact of the riots will act as a further hurdle to the economy. There is no doubt that the horrific destruction of property and looting witnessed primarily in KZN and Gauteng mid-July, will have a detrimental impact on the economies of those provinces, but also directly on the country’s fragile recovery. – Jarryd Neves The economic pain of the riots and further impacts ![]() Below, Mike Schüssler looks at the impacts of the destruction (both direct and indirect) that will plague South Africa in the years ahead. Communities banding together to protect, rebuild and repair may have been the silver lining to this very dark cloud – but even that cannot eclipse the economic pain and future impact that is to come. Damage estimates have said to be close to R50 billion, with countless items stolen and more senselessly destroyed. What’s more, Bloomberg reports that at least 330 people lost their lives to the rioting. ![]() Not only did numerous businesses go up in smoke, but property was trashed and destroyed as myriad looters took to the streets. The civil unrest that tormented KwaZulu-Natal and parts of Gauteng was the worst violence South Africa has seen since Apartheid ended. ![]()
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