Following the spate of looting, arson and rioting that have laid waste to swathes of KwaZulu-Natal and Gauteng in the wake of former president Jacob Zuma’s jailing, many small and medium-scale businesses may not reopen in South Africa again.
The head of capital markets research at Intellidex, Peter Attard Montalto says, “We think investors still don’t really get the scale of what has happened.”
Head of Business management department at the University of the Free State Professor Brownhilder Neneh posits that the small and medium-scaled enterprises will be the most affected by the attacks.
“Unlike big businesses and retailers, many others do not have insurance. Big businesses will eventually be able to find their feet, but it will be terribly tough for small-business owners, as many do not have the financial reserves to take the economic shock, never mind bounce back from this kind of situation,” she said.
Consultant Melanie de Nysschen argued in the same vein, stated that the unrest would not only affect businesses but indirectly affect those dependent on enterprises to produce, sell and distribute their products.
“Horrifying figures are coming from different business councils. At least 70% of small businesses which are affected by the violence are black-owned.”
South African Special Risks Insurance Association (Sasria), a state-owned enterprise and a SAIA member, is the only insurer in South Africa that provides cover for any damage caused during a politically motivated riot or public commotion. Unfortunately most of the affected businesses may not have been insured. Affected businesses without Sasria insurance may foot the bill or close up for good.
President Cyril Ramaphosa said in an address on Friday (16 July evening) that so far, 212 people have lost their lives to the violence. Out of which 180 were in KwaZulu-Natal, and 32 in Gauteng.
He further added that the South African Police Service is investigating 131 cases of murder and has opened inquest dockets in respect of 81 deaths and damage on properties. More than 3400 persons have been arrested after an influx of tip offs.
There were over 118 incidents of public violence, arson, looting and other unrest-related instances.
161 malls and shopping centres, 11 warehouses, 8 factories and 161 liquor outlets and distributors were extensively damaged.
Other facilities destroyed include:
- 90 pharmacies
- 1400 ATMs
- 489 Pepkor stores (Pep and Ackermans clothing stores)
-300 banks and post offices
- a Cipla medicine factory (one of the biggest in SA)
- 190 Foschini group clothing stores
-99 Famous Brands stores (Steers and Wimpy restaurants).
- 33 Massmart stores: 10 Game stores, 8 Builders Warehouse and 2 Makro stores.
32 Cashbuild stores.
12 Mr Price clothing stores.
- 1 blood bank.
Damage worth billions of rand was wrecked on roads and other infrastructure.
The President explained that the police were faced with a difficult situation and exercised commendable restraint to prevent any loss of life or further escalation. “However, once additional security personnel were deployed, they were able to quickly restore calm to most areas that were affected,” he said.
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