Business rallies behind the government to get economy going again
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BUSINESS has rallied behind the government in getting the economy going again following last week’s protests that shook investor confidence and slumped the rand.
Business seemed to be slowly getting back to normal yesterday after a group of about 30 captains of industry met with a government delegation last week to tackle the crisis.
Business Leadership SA (BLSA) said yesterday that the issues business leaders were facing in getting the economy going again had led to collaboration with the government.
BLSA chief executive Busi Mavuso said business was helping to identify areas of priority.
These include key logistics that need to be reopened to ensure supply chains are able to start moving food, medicines and fuel again.
In the wake of the meeting, Mavuso said the N3 highway was cleared and the process was well under way to ensure ports and rail were also reopened.
“Business has also been actively supporting the government in regaining control of the security situation,” Mavuso said.
“I am heartened by the president’s assurances that vigorous investigation and prosecution of the instigators of last week’s violence will take place.”
Last week, Gauteng and KwaZulu-Natal (KZN) were plunged into a wave of property destruction and looting of shopping malls triggered by the protest over the arrest of former president Jacob Zuma.
The Port of Durban and the Sapref oil refinery were disrupted, impacting on the country’s foreign trade and fuel availability.
In KZN alone, the total loss to economic growth is estimated to be at more than R20 billion.
About 50 000 informal traders and an estimated 40 000 formal businesses were impacted, including small businesses and a large portion of those who may never recover.
More than R1.5bn worth of loss in stock was affected, with R15bn in damages to property and equipment, putting 150 000 jobs at risk.
President Cyril Ramaphosa said yesterday that the true cost of this campaign of destruction would be keenly felt, especially by the poor in the coming days and weeks.
“The economic damage has sapped many of the budding shoots of recovery we were witnessing just a few weeks ago,” Ramaphosa said.
“As we work to stabilise the country and secure essential supplies and infrastructure, we must work together to mitigate the effects of this unrest on society’s most vulnerable.”
Alexander Forbes chief economist Isaiah Mhlanga said the economics security aspects projected to international investors was that South Africa was an unsafe place to invest.
Mhlanga said this would have consequences for foreign direct investment.
“The general policy environment will be weakened, because the psychology of the state is in managing Covid-19 and the instability thus it takes efforts away from economic reforms,” he said.
“Also, some businesses may opt not to return to some of the areas which may result in the permanent loss of jobs and investment.”
The rand traded weaker at R14.45 yesterday after closing at R14.39 on Friday, but still up from last week’s protest-driven sell-off which saw it plunging to a three-month low. By 5pm the rand was at R14.5149.