Long road lies ahead for KZN’s economy, says Premier Sihle Zikalala
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DURBAN - THE KWAZULU-Natal government has warned that it will take time for the province to recover from the economic damage brought on by the violence and looting that left several people dead and properties destroyed.
This, as economists warn that businesses destroyed by looting cannot wait for the national government to help them rebuild and there is a real possibility that many of these may not recover.
Giving an update on the damage, Premier Sihle Zikalala said at the weekend that it would take some time before the province recovered from the damage.
“The impact has been worst in rural towns, for SMMEs and on individual business owners, but the destruction has been felt across our economy. The road to full recovery will be long and hard and require all stakeholders to work together to reverse the negative impact.”
He said in the latest assessments eThekwini Metro and Msunduzi municipalities remained the hardest hit.
Zikalala said the unrest would affect eThekwini this manner:
Loss of stock of more than R1.5 billion.
Damage to property and equipment of more than R15bn.
*Over 50 000 informal traders affected.
Over 40 000 businesses affected. More than 150 000 jobs are now at risk.
He said towns including Nongoma, eShowe, Boston and Umzimkhulu were also hard hit.
Zikalala said his government had consulted with its social partners, including political parties, business owners, traditional leaders, religious leaders and transport operators respond collectively to the crisis.
The build-back better response would be based on several pillars including security: ensuring the security of persons, property, essential services and business; and co-ordination: establishing a co-ordinated effort in recovering the economy with all organs of state.
Zikalala said there would be a focus on the township and rural economy.
“This is with clear and concise actions to ensure not only food security, but also employment creation. Flagship projects like Bulk Buying will be accelerated to ensure access of products to spaza shops in the townships.
“Beyond the initial period of three months we must agree on the need to work together to reset our economy. Resetting means that our economy must, over time, begin to reflect the demographics of our province guided by the principles of inclusivity and co-ownership,” he said.
Economist Professor Bonke Dumisa agreed with Zikalala that it would take a very long time for the business sector to rebuild.
“People cannot rely on the national Treasury to help them rebuild; we have a government that is heavily indebted and there was already a concern that it might not be able to meet some of its debt obligations.”
He said the hope for survival was on whether these businesses were insured.
“In 1985 many black businesses in KwaMakhutha, KwaMashu and uMlazi were destroyed.
“To this day those business are still in ruins, there is a real possibility that these businesses that were destroyed, might never recover.”
Dawie Roodt, another economist, estimated that 50 000 of the 150 000 jobs that have been affected, might not return.