₦airaland Forum

South African economy has grown at low levels for decades, resulting in high levels of unemployment and discontent. However, the country remains Africa's largest economy and bond for a record-breaking $500B GDP if the current 0.5-1% growth moment continues.

Economists say the biggest cost of June 30 may not have been the protests themselves, but the millions of rands in lost trade as businesses chose safety over opening their rather than risk operating.

Although widespread violence was largely averted during the anti-immigration marches on June 30, economists and business leaders say the uncertainty surrounding the demonstrations came at a significant cost to South Africa's economy, with millions of rands in trade lost as businesses opted to close their doors rather than risk operating.

Across Cape Town, shopping centres, township businesses, wholesalers, clothing retailers, furniture stores and informal traders either remained closed for the day or operated on reduced trading hours as concerns mounted over possible violence and looting.

Cape Chamber of Commerce spokesperson Bobby Jordan said while coordinated safety partnerships between business, law enforcement and government prevented widespread disruption to the broader regional economy, small businesses ultimately paid the price.

"While coordinated safety partnerships shielded the broader regional economy from widespread gridlock, the threat of unrest still imposed a financial and operational burden on SMMEs (small businesses). We received widespread reports of small business closures," Jordan said.

"When fear paralyses even a fraction of that ecosystem, forcing township traders and retailers to close their doors, millions of rands in unrecoverable daily cash flow evaporate from the communities that need it most."

Unlike larger corporations that often have financial reserves to cushion temporary setbacks, Jordan said many SMMEs simply could not recover the income lost during the day.

Jordan welcomed the coordinated response that kept much of the province peaceful but said longer-term solutions were needed.

"While business and law enforcement successfully demonstrated what can be achieved through proactive crisis coordination, stakeholders warn that reactive containment is not a permanent strategy.

"To restore long-term confidence, the government must move past short-term management and decisively address the root causes, specifically community discontent over crime, immigration regulation, and a lack of labour law enforcement, by strictly enforcing compliance across all sectors."

Economist Ulrich Joubert said the consequences extended far beyond small businesses, affecting the economy as a whole.

"We must remember that it's not only SMMEs that are affected by events like 30 June, it's the total economy. Big business is also adversely affected because these events cause disruption."

"Normally one must assume that that money is lost forever. So it has a negative impact on businesses, whether it's a small business or a big business."

"These disruptions have a negative impact on overall consumer confidence. If these marches continue over the next six months, as organisers have suggested, they will continue to weigh on consumer confidence."

Joubert also expressed concern about the message such disruptions send to international investors.

"Why would anyone from overseas come and invest in South Africa if they see these sorts of disruptions? Unfortunately, the overall situation is negative. It has a negative impact on small business, on big business, on consumers in general and on investment."

He further cautioned against overlooking the economic contribution made by skilled foreign nationals.

"Many foreign workers bring valuable skills to South Africa. In many cases they fill jobs that South Africans do not want to do or they bring qualifications and experience that benefit the economy. From an economic perspective, skilled foreign labour is an asset because the country benefits from those skills without having paid for that person's education."

Economist Dawie Roodt agreed that the day had undoubtedly affected businesses, particularly smaller enterprises that rely on daily income, although he believes some of the immediate losses could be recovered.

"There will be an impact on the economy, especially on smaller businesses that can't afford a day's lost business, because that is basically what in many cases happened on the day. But I'm not too concerned about that, because this lost revenue can usually be made up over the next couple of days or so. Lost production can be caught up, and South Africa has become quite resilient when it comes to these kinds of disruptions."

Roodt said his greater concern was the broader economic implications of growing hostility towards foreign nationals.

"It seems to me that we have been quite successful in expelling a lot of illegal immigrants, but also probably a lot of legal immigrants to South Africa."

While he stressed that everyone should comply with the country's immigration laws, he said immigrants make an important contribution to the economy.

"The reality is that those immigrants in South Africa are, on a net basis, significant contributors to the South African economy. In many instances they are job creators as well. They are not taking jobs away on a net basis, they are actually adding jobs to the economy."

Roodt warned that the consequences of xenophobia would extend well beyond a single day of disruption.

"I'm afraid the economy is going to suffer over time because of the xenophobia that we're currently experiencing in the country. That's the price we're going to pay, and it's a price that we will pay for a long time to come."

Seppuku Morpheus24 omoawake panafrican

RandDigital:
South African economy has grown at low levels for decades, resulting in high levels of unemployment and discontent. However, the country remains Africa's largest economy and bond for a record-breaking $500B GDP if the current 0.5-1% growth moment continues.

Economists say the biggest cost of June 30 may not have been the protests themselves, but the millions of rands in lost trade as businesses chose safety over opening their rather than risk operating.

Although widespread violence was largely averted during the anti-immigration marches on June 30, economists and business leaders say the uncertainty surrounding the demonstrations came at a significant cost to South Africa's economy, with millions of rands in trade lost as businesses opted to close their doors rather than risk operating.

Across Cape Town, shopping centres, township businesses, wholesalers, clothing retailers, furniture stores and informal traders either remained closed for the day or operated on reduced trading hours as concerns mounted over possible violence and looting.

Cape Chamber of Commerce spokesperson Bobby Jordan said while coordinated safety partnerships between business, law enforcement and government prevented widespread disruption to the broader regional economy, small businesses ultimately paid the price.

"While coordinated safety partnerships shielded the broader regional economy from widespread gridlock, the threat of unrest still imposed a financial and operational burden on SMMEs (small businesses). We received widespread reports of small business closures," Jordan said.

"When fear paralyses even a fraction of that ecosystem, forcing township traders and retailers to close their doors, millions of rands in unrecoverable daily cash flow evaporate from the communities that need it most."

Unlike larger corporations that often have financial reserves to cushion temporary setbacks, Jordan said many SMMEs simply could not recover the income lost during the day.

Jordan welcomed the coordinated response that kept much of the province peaceful but said longer-term solutions were needed.

"While business and law enforcement successfully demonstrated what can be achieved through proactive crisis coordination, stakeholders warn that reactive containment is not a permanent strategy.

"To restore long-term confidence, the government must move past short-term management and decisively address the root causes, specifically community discontent over crime, immigration regulation, and a lack of labour law enforcement, by strictly enforcing compliance across all sectors."

Economist Ulrich Joubert said the consequences extended far beyond small businesses, affecting the economy as a whole.

"We must remember that it's not only SMMEs that are affected by events like 30 June, it's the total economy. Big business is also adversely affected because these events cause disruption."

"Normally one must assume that that money is lost forever. So it has a negative impact on businesses, whether it's a small business or a big business."

"These disruptions have a negative impact on overall consumer confidence. If these marches continue over the next six months, as organisers have suggested, they will continue to weigh on consumer confidence."

Joubert also expressed concern about the message such disruptions send to international investors.

"Why would anyone from overseas come and invest in South Africa if they see these sorts of disruptions? Unfortunately, the overall situation is negative. It has a negative impact on small business, on big business, on consumers in general and on investment."

He further cautioned against overlooking the economic contribution made by skilled foreign nationals.

"Many foreign workers bring valuable skills to South Africa. In many cases they fill jobs that South Africans do not want to do or they bring qualifications and experience that benefit the economy. From an economic perspective, skilled foreign labour is an asset because the country benefits from those skills without having paid for that person's education."

Economist Dawie Roodt agreed that the day had undoubtedly affected businesses, particularly smaller enterprises that rely on daily income, although he believes some of the immediate losses could be recovered.

"There will be an impact on the economy, especially on smaller businesses that can't afford a day's lost business, because that is basically what in many cases happened on the day. But I'm not too concerned about that, because this lost revenue can usually be made up over the next couple of days or so. Lost production can be caught up, and South Africa has become quite resilient when it comes to these kinds of disruptions."

Roodt said his greater concern was the broader economic implications of growing hostility towards foreign nationals.

"It seems to me that we have been quite successful in expelling a lot of illegal immigrants, but also probably a lot of legal immigrants to South Africa."

While he stressed that everyone should comply with the country's immigration laws, he said immigrants make an important contribution to the economy.

"The reality is that those immigrants in South Africa are, on a net basis, significant contributors to the South African economy. In many instances they are job creators as well. They are not taking jobs away on a net basis, they are actually adding jobs to the economy."

Roodt warned that the consequences of xenophobia would extend well beyond a single day of disruption.

"I'm afraid the economy is going to suffer over time because of the xenophobia that we're currently experiencing in the country. That's the price we're going to pay, and it's a price that we will pay for a long time to come."

Seppuku Morpheus24 omoawake panafrican

Let me put like the average South Africa would' eh wena, We don't care!"

seppuku:
Let me put like the average South Africa
would' eh wena, We don't care!"

Anyway, denial ain't just a river in Egypt. Will post when target reached. Ok wena 👍🏾

RandDigital:
Anyway, denial ain't just a river in Egypt. Will post when target reached. Ok wena 👍🏾

If you are asking for my input then a personal level I have a lot of friends here and across West Africa that I know have cancelled their trips to South Africa this coming summer and rebooked to Rwanda so in my opinion you will have economic effects.

So Morocco is not even in the top three, yet they have beautiful infrastructure.

seppuku:
If you are asking for my input then a personal level I have a lot of friends here and across West Africa that I know have cancelled their trips to South Africa this coming summer and rebooked to Rwanda so in my opinion you will have economic effects.

Alright, fair enough. Tourist hotspots aren't affected though, suburbs or foreign nationals in corporate or universities. The issue is localised - where there's a high concentration of illegal migrants like townships, Hillbrow, etc.

That's the travel advise countries should offer their citizens.

Solsix:
So Morocco is not even in the top three, yet they have beautiful infrastructure.

That's the beauty of hosting global events - you can showcase your best. SA did the same in 2010, opened eyes that the country is world class.

RandDigital:
Alright, fair enough. Tourist hotspots aren't affected though, suburbs or foreign nationals in corporate or universities. The issue is localised - where there's a high concentration of illegal migrants like townships, Hillbrow, etc.

That's the travel advise countries should offer their citizens.

Tourists spots are affected like Vilakazi street in soweto, Maboneng, Durban beach, Suncity and the rest.

Which African will want to take the risk of being accosted in those areas.