Social unrest and looting warning for South Africa

Labour Economist Andrew Levy said many South Africans are dissatisfied and warned that a single incident could trigger a repeat of the 2021 riots and looting in KwaZulu-Natal and Gauteng.

Levy told Kaya Biz that there are daily protests across South Africa related to service delivery, corruption, and poor local government.

The protests, partly due to high unemployment and rising living costs, show that South Africa registers high on the scale of societal dissatisfaction.

“All it could take is one incident to trigger a repeat of the July 2020 unrests in KwaZulu-Natal and Gauteng,” he said.

“Hopefully, we will not see that. Hopefully, we will see strong and positive responses from the government.”

He said it is possible to address the structural problems through strong leadership, creating a single vision to unite the nation.

It can jumpstart the economy, create jobs, and address the weak currency which has eroded the purchasing power among poor and working-class South Africans.

However, Levy is not optimistic that the government will do what needs to be done to address poor economic growth, unemployment, and poverty.

“If we have not seen it by now, I doubt that we will see it anytime soon, especially as the government is scared to alienate any group currently supporting it,” he said.

Levy’s warning echoes that of many other business leaders, including Old Mutual CEO Iain Williamson and Efficient Group chief economist Dawie Roodt.

Williamson warned that South Africa would likely experience social unrest before elections next year during Bloomberg’s Future of Finance Conference in June.

Williamson noted the rise of protest action in South Africa and raised the possibility of a repeat of the July Riots of 2021 in KwaZulu Natal.

Political analyst JP Landman and Nedbank’s chief economist Nicky Weimar also warned that the lack of economic growth causes a breeding ground for unrest.

With elevated inflation, particularly in consumer staples such as food and energy, fertile ground for social unrest has been laid in South Africa.

Their fears echo those of Efficient Group chief economist Dawie Roodt who is concerned about rising poverty levels and poor economic growth.

Roodt said the high poverty levels and unemployment with rising food costs are a recipe for mass unrest and disorder. It puts South Africa on the brink of disaster.

“My biggest fear is that a spark can make the situation explode. It is a highly volatile situation waiting to explode,” he said.

It is not only business leaders who are sounding the alarm. Numerous reports have highlighted the same challenges.

Allianz’s Social Risk Index (SRI) has also identified South Africa as “highly vulnerable to social unrest in the next 18 months”.

PwC’s South Africa Economic Outlook report warned that elevated inflation and interest rates are social risk factors, and social cohesion in South Africa may break down.

The firm has also previously warned of potential social unrest due to South Africa’s high unemployment rate and large social cleavages.

PwC further warned that South Africa’s food supply is threatened, with food insecurity rising in 2023 due to load-shedding, adverse weather, and deteriorating infrastructure.