Source: Financial Times
The burnt ruins of a cold chain warehouse were still smouldering last week, sending trails of smoke into the sky above Hammarsdale on Durban’s western outskirts — a promised new logistical heartland for South Africa.
After days of the worst looting in the history of the post-apartheid democracy, any meat that had not been stolen was rotting inside.
The eruption of huge civil unrest, after former president Jacob Zuma was jailed for failing to attend an inquiry into corruption, has hit KwaZulu-Natal province hard. It has long been a base of support for Zuma. More than 330 people have died across the country during a week of violence, which ended when troops were put on the streets.
Nowhere is the economic impact more evident than in Hammarsdale, where looters targeted some of the many retail warehouses and manufacturers that extend for miles along a key motorway route from Johannesburg to Africa’s biggest container port in Durban.
Since Cyril Ramaphosa took office as president in 2018, promising to turn around a languishing economy, hopes had been high for a renaissance for the area. “There had been real positive momentum. Jobs are being created,” said one executive, who declined to be named.
This future is now at risk, business groups such as the South African Property Owners Association and Business Leadership South Africa have warned. The estimated cost to the province’s gross domestic product — in terms of losses to stock, damage to property and lost exports — is roughly R20bn ($1.4bn). South Africa’s gross domestic product last year was about $300bn.
Some businesses may take years to be rebuilt, according to industry groups. KwaZulu-Natal (KZN) and Gauteng, South Africa’s economic hub which was also hit by violence, make up half of national GDP and almost half of the country’s population. The port of Durban handles 70 per cent of the country’s imports and is a gateway to southern Africa.
“It’s currently difficult to assess what the total cost of the unrest is because there are areas which are still volatile, particularly in KZN. However, the damage is likely to cost north of R20bn in KZN and the cost to the country is likely [to be] north of R50bn,” said Thabi Leoka, an independent economist. “The biggest loss, apart from the loss of lives, is the loss of jobs that many will incur because their places of work no longer exist.”
KwaZulu-Natal has long symbolised two South Africas: one of investment and job creation in high-tech logistics, and another of decay and potholed roads outside of the business parks.
Protests that began with truck burnings and looting quickly became an assault on food supply chains, including supermarkets, warehouses and food packaging. The deliberate sabotage of such investments was at the heart of the unrest, Ramaphosa told business leaders this week, as part of a plan “to cripple the economy, cause social instability and severely weaken — or even dislodge — the democratic state.”
The unrest also reflected despair over years of joblessness and hunger worsened by the pandemic. “This was not a Zuma issue — it was a ticking bomb,” said Thapelo Mohapi, spokesperson for Abahlali baseMjondolo, a Durban-based movement that represents shack dwellers.
In Durban’s Umgeni Park area, one such settlement sits just below leafy suburbs and warehouses, yet “people were even cooking wild plants under lockdown”, said Mohapi. As the unrest spread, “people were taking food and saying ‘I don’t know who Zuma is’”.
While some people took food, “the Zuma supporters went and burned”, he added. At a vast warehouse in Cato Ridge, close to Hammarsdale, hundreds breached fences and prised open doors to loot Samsung TVs and other goods. The police, who had run out of rubber bullets, stood by, observers said. A clean-up was now under way and the warehouse would stay and “hoist the flag”, but with greater security, a manager said.
While logistics have opened up again after the army and police secured supply routes, many people remain without income to buy enough food. The national jobless rate was just over 32 per cent at the start of 2021. It is almost 48 per cent for black South Africans and 74 per cent for the young.
The unrest has left many with even less access to affordable food. Nearly 120, or about one in 10, ShopRite supermarkets in South Africa had been damaged by fire or looting, the company said. The retailer, which is Africa’s biggest grocer, added that it was “committed to rebuilding and restoring operations as quickly as possible.”
Even before this month’s violence, a blend of political and criminal violence had been disrupting Durban’s economy. Activists said some officials from the ruling African National Congress and criminal syndicates have merged into protection rackets, which demand concessions or a piece of the action from businesses and then fight — and frequently kill — over the spoils. Abahlali’s organisers have been threatened over their protests against ANC corruption.
For now, there is anxiety over whether investors will rethink their plans. “It’s very sad,” said Musa Mkhize, the local ward councillor for the ANC, about the recent unrest. “This is a great area for industry.”