Covid-19 Business Watch
WATCH: The week in review
Business Day TV discusses the economics of SA protests, lockdown and recovery
Last week we said a week is a long time in politics and I never could have imagined how that would come back to haunt us.
The country experienced one of the most violent and damaging weeks in its young democratic history, which has left a trail of dead bodies, burnt buildings and political and national soul searching in its wake.
Questions are being asked of thepresident who only addressed the country once specifically on the looting on Monday, and of the decision to deploy the army so late in the day. But if one reads the nuance of the situation carefully, one sees that the calm and carefully measured approach actually avoided potentially far greater bloodshed and loss of life, which would have played right into the instigators' hands and fed a call for the president to resign. After all,Marikana’s wounds are still fresh.
Civilians had to step in as the thin blue line snapped in the face of the marauding hordes. But there is a silver lining to these dark clouds — the fact that ordinary South Africans recognise that rooting out the corrupt faction will be painful and they have stood firm along with community groups to rebuild. As things simmer down the economic costs are starting to be counted.
Deutsche Bank said on Thursday that riots in SA could shave 0.8% from the country’s economic growth this year and lead to a possible hit to the budget balance of some 0.2% to 0.5% of GDP.
Moody’s said “the escalation of violence represents a manifestation of SA's exposure to social risks inherent in its credit profile, stemming from the high levels of income inequality and unemployment, particularly among the youth...”
To put things into perspective, Michael Avery is joined by Warwick Lucas, Chief Investment Officer at Galileo Asset Managers; Raymond Parsons, professor in the School of Business and Governance at Northwest University; and Gareth Newham, head of the Justice and Violence Prevention Programme at the Institute for Security Studies
An outlook of the economics of SA protests, lockdown & recoveries
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