In July, South Africa witnessed some of the worst violence and looting in years. The spark for the nationwide conflagration was the jailing of former President Jacob Zuma, which triggered protests in his home province of KwaZulu-Natal. The protests soon escalated into riots and looting across the country, spreading to Gauteng, the country’s most prosperous province.
Shopping centres, local stores and warehouses were comprehensively ransacked, while vigilante gangs sprung up to defend property. The final death toll from the national breakdown in law and order is at least 337. The economic costs have also been devastating for many. At least 40,000 businesses have been affected, with the total economic damage estimated at over $3.4bn.
While the initial impetus was political, much of the subsequent violence appears to be opportunistic looting from South Africans whose desperate economic prospects have been worsened by Covid-19 and strict lockdowns. But the government also suspects targeted acts of economic sabotage by those intent on disrupting the democratic state, and organised criminal gangs are thought to have exploited the security vacuum to operate with freedom.
Challenge for Ramapahosa
The unrest poses a huge challenge for President Cyril Ramaphosa. South African civil society heralded the jailing of Zuma on contempt of court charges in early July as a huge victory for the president, the rule of law and the mission of ending impunity for political corruption.
Yet the initially insipid security response to the rioting once again fuelled an international image of a country where law enforcement remains precarious. There is now serious concern among investors over what July’s events mean for the security of their holdings, particularly from retail investors who saw an estimated 200 shopping centres destroyed or looted.
Forecasts from Intellidex expect the events to shave a further 0.7% off GDP, a number that the growth-starved economy can ill afford. Kwa-Zulu Natal alone is thought to have lost over $1.4bn.
Now that security has been established through belated army deployments and the violence has fizzled out, attention turns to the government’s policy response.
Ramaphosa has announced the reinstatement of a monthly welfare grant of R350 ($23.60) for the poor until the end of March and a R400m ($30m) contribution to a humanitarian relief fund and support for uninsured businesses. Tax incentives and deferrals are also on the table. Welcome though they are, they risk being little more than plasters on an open wound.
Ramaphosa must show that he is not willing to give in to political agitators using the violence to push for Zuma’s release. Any further incidents of rioting and violence must be met with an immediate security response in order to convince investors that the country will not countenance a repeat. The rule of law must be extended to all South Africans regardless of wealth or political influence.
In the long term, the solution remains the same as it’s always been – ending rampant racial and economic inequality and corruption, reforming the state, and encouraging foreign investors to set up and hire unemployed South Africans. But July’s terrible events have made that job much harder.