THE magnitude of the damage caused by the recent civil unrest in KwaZulu-Natal has resulted in the provincial government declaring a provincial state of disaster in the country’s second-largest economy where nearly a third of manufactured exports were produced.
KwaZulu-Natal contributes an average of 16 percent to the country’s gross domestic product (GDP). Last year, the province’s economy contracted by 6.9 percent, with construction the hardest hit sector, shrinking by 18 percent. One of the province’s most important sectors in terms of job creation and contribution to GDP was manufacturing, which contracted by 11.9 percent last year.
KwaZulu-Natal’s manufacturing sector has a significant share of the economy and contributes 20 percent of employment in the province.
The resolution was taken during Wednesday’s Provincial Executive Council meeting, chaired by Premier Sihle Zikalala, following deliberations on the state of the province after the civil unrest.
The Provincial Executive Council received a detailed progress report, as most of the organs of state had conducted their preliminary assessments to determine the magnitude of their damages and the cost implications.
The current estimated cost of damages and the relief required for the departments was R1 534 026 832.96, while the municipal damages required R47 733 460.37. The interim financial implications were put at R1 581 760 293.33.
The Executive Council noted that the financial implications of the damages and the recovery costs were still not final. It was resolved that with the work done so far, it was beyond the capacity of the province and municipalities to deal with the cost of the riots and unrest as reported.
As such, the Executive Council recommended submitting for classification to the national disaster management centre in terms of section 23(1)(b) of the Disaster Management Act. The declaration of a provincial state of disaster would support the reprioritisation of budgets to implement repairs and recovery programmes.
The largest manufacturing industries in KwaZulu-Natal were the automobile sector, pulp and paper products, rubber and plastics, chemicals and petro-chemicals, food and beverages, and textiles and clothing. The mining sector, which includes titanium dioxide and zircon, along with iron, steel and ferro alloys, was also considered very important.
The vehicle-manufacturing industry has created a considerable multiplier effect in component and service providers. The automotive leather industry has grown rapidly, with exports significantly increasing foreign exchange earnings as a result of rapid industrialisation in Newcastle, Ladysmith, Dundee, Richards Bay, Durban, Hammarsdale, Richmond, Pietermaritzburg and Mandeni.