South Africa


Business leaders concerned that eThekwini mayor offers platitudes but no concrete plans to rebuild operations

Business leaders concerned that eThekwini mayor offers platitudes but no concrete plans to rebuild operations
eThekwini Mayor Mxolisi Kaunda. (Photo: Gallo Images / Darren Stewart)

Business leaders in eThekwini feel that they are no closer to knowing whether the municipality will be taking steps to help them rebuild their damaged operations after a meeting with the mayor left them with few concrete remedies.

Support being offered to the hundreds of businesses burned, damaged and vandalised during last week’s civil unrest is being criticised for appearing to consist of warm words and reassurances that have all been uttered before.

While industry leaders have committed to “give eThekwini and KZN one more chance”, they have also told Daily Maverick that “the status quo simply cannot remain”.

On Thursday night, city mayor Mxolisi Kaunda met with “captains of industry” in the metro and told them, “Our interventions must be able to replace the despair prevailing in our society with tangible plans that will transform the lives of our people for generations to come.”

He said the task of rebuilding the city’s infrastructure would require collaboration between the city, province and national government – working closely with all stakeholders in business.

“It is in everyone’s interest that we succeed in our efforts to bring renewed hope to the citizens and help the city rise from the ashes,” he said.

After the meeting with industry bosses on Thursday evening, the mayor had been expected to give his first formal press conference following a week of civil unrest, but cancelled it at short notice.

On Friday morning, a number of business owners who spoke to Daily Maverick, but did not wish to be identified for fear of reprisal, said that armed groups claiming to represent “business forums” had begun trying to “negotiate” with them at malls in townships for cleaning and rebuilding contracts. “They said they wanted to negotiate. They had guns and said if we give them R1-million, they will clean up. We called the police, nothing was done,” said one business owner.

Police had not confirmed the allegations at the time of publication.
Another executive told Daily Maverick he had “never seen the level of attendance” of executives as had turned up for Thursday night’s meeting. “There were over 155 high-ranking businesspeople in attendance, or their direct representatives.”

All had the same concerns, said the executives. Safety and security was “paramount” and there was “doubt” about Kaunda’s ability, or that of the provincial government, to give assurances on these.

“We believe that only the national government can give and enforce those assurances. There appears to be a lack of political will in KwaZulu-Natal from leaders [to support business].” Said another business leader: “We are all trying to sort out our insurances and get our businesses up and running at this stage. No one will be putting any meaningful money into anything until [the security concerns] are resolved.”

In his speech delivered at Thursday night’s meeting, Nigel Ward, who is the president of the Durban Chamber of Commerce, told Kaunda that more visible leadership was needed from the city and province, stronger communication and collaboration, and that “quick wins” needed to be identified through “doable catalytic projects that will ensure rapid rebuilding and, more importantly, confidence”.

Ward thanked the business community for “pulling together in the initial absence of any understanding and leadership towards a coordinated crisis management approach”.

What the city is currently offering to devastated companies relies on structures that are already in place. Among the interventions proposed is the repurposing of eThekwini’s budget, applying to have the city declared a disaster area to access national funding, the fast-tracking of processing building plans, a one-stop hotline and allowing businesses to apply for rates relief.

But none of this is carved in stone.

eThekwini’s budget is already under pressure due to the Covid-19 pandemic and well-documented acts of rampant fraud and corruption. According to the metro’s own estimates, it lost R50-million in revenue in the week of unrest, and “with the increased unemployment, we anticipate that cash collection rates will be affected”.

An adjustment budget would need to be tabled before a full council, while an application to be declared a disaster area is not a forgone conclusion.
A key consideration in granting disaster status is whether the affected area can cope with the effects using only its own resources. eThekwini, while not the only municipality in the province affected, is by far the most affluent, and damage was limited largely to private property. It will be competing with other municipal entities that will be seeking a slice of the disaster pie.

The structures for fast-tracking of building plans and the hotline already exist. In 2016 the city’s Economic Development Incentive Policy allowed for a one-stop shop and investment fast-tracking services.

What is unclear is whether any individual or business will sue eThekwini for losses incurred, particularly the uninsured. One piece of legislation that allows for this is the Institution of Legal Proceedings against Certain Organs of State Act. The act allows individuals to submit a claim against certain government entities, such as municipalities, if the individual believes he or she has suffered loss or damage to property or was injured due to the state’s negligence.
eThekwini’s leadership, steered by Kaunda, has been left reeling after its bungled response to the chaos that engulfed the metro.

By its own initial estimates, property and equipment losses of R15-billion have been incurred. At least R1-billion in stock has been lost, while 40,000 formal businesses and more than 50,000 informal traders have been affected. The total impact to the eThekwini GDP has been estimated at more than R20-billion, and “more than 150,000 jobs are at risk and close to 1.5 million are at home with no income due to unrests [sic]”.

Since this estimate, the number of jobs at risk has been revised downwards to 129,000.

According to a presentation tabled before the municipality’s executive council on Tuesday, titled “Impact of the Recent Unrests”, the city acknowledged that the looting and chaos were rooted in the imprisonment of former president Jacob Zuma. “In the aftermath of Mr Zuma’s imprisonment on the evening of 8 July 2021, civil unrest and looting unfolded in various parts of the province. The tense situation and damages escalated during the weekend of the 10th and 11th in different suburbs of the eThekwini Municipality.”

The only tangible benefit businesses could apply for already exists. According to the presentation, companies could apply for a rates reduction or rebate through section 78 of the Municipal Property Rates Act or section 14 of the city’s rates policy, respectively – but not both – and they can cancel water and electricity services to avoid further service charges if they are no longer using those services due to their businesses not operating.

Section 78 requires the property owner to request that the city revalue their property, thereby changing what they pay on property rates. So, in the case of a building that was torched – there were at least 400 – the buildings would naturally devalue and thus reduce the property rate.

The other option is to apply using section 14 of the city’s own rates policy. This section of the policy specifically applies to a “development rebate incentive” which is granted to both greenfield and brownfield developments as detailed in the city’s Economic Development Incentive Policy.

But for businesses that were damaged and can still operate, the city is not yet clear about how it can, or if it will, help.

Opposition parties have blamed the city’s inadequate response to the violence on the mayor’s support for Zuma, with the Democratic Alliance (DA) being particularly scathing. Opposition party leaders from the municipality were working on the ground with their communities during the unrest. Kaunda has said he was absent because he had again contracted Covid-19.

He has faced a volley of criticism for an ill-considered Facebook post he made on 10 July, when the protests had already turned violent, in which he said: “We are Msholozi, Msholozi is us. #FreeZuma.”

This sentiment carried through to Monday, 12 July, when the city, instead of unequivocally denouncing the violence, politely asked the looters to stop what they were doing via a press statement.

Kaunda said in that statement that the government “appreciates the anger among the people which was occasioned by the arrest of the former President” but “request[s] the residents of eThekwini to desist from embarking on violent actions which may exacerbate the economic crisis”.

The following day the city put out a Facebook post, with a photo of the beaming mayor, and the tagline “Save Jobs, Stop looting”.

The Exco presentation noted: “The total impact on the loss of GDP to this region will be over R20-billion, including lost production, if the protests don’t end now. Please note these are preliminary estimates.”

The document recorded that the fire department responded to 996 separate incidents. This included 38 high-rise buildings, 202 stores and shops, 69 factories, garages, and workshops and 71 vehicles. There were 437 incidents of grasslands, bush, rubbish, tyres, and a variety of other loose items that were burnt that were also attended to.

The South African Police Service (SAPS) responded to at least 78 scenes, according to the presentation, but this number is not a true reflection and is likely to be much higher, with the city not providing clarity on the size or scale of incidents in certain areas.

In one such example, the report simply mentions that the SAPS responded to the “Cornubia industrial area”. This is a 1,200 hectare industrial and business park that includes the torched United Phosphorus Limited warehouse, the burning of which led to severe water and air pollution.

The presentation to Exco also revealed that damage to municipal facilities had not yet been quantified, but noted that the unrest had affected the vaccine programme and city vehicles had been damaged. It had also led to “low investor confidence” and damaged race relations, and there had been an impact on food security and environmental damage.

It also noted that there was a shortage of cash as many ATMs had been vandalised and that faith-based organisations, civil society institutions and the “community at large” were now undertaking food distribution.

Ten fixed clinics had closed and an estimated 37,000 sick residents had been unable to reach clinics or hospitals. At least 3,600 people could not collect their chronic medication. Clinics that were able to open were limited in the services they could provide due to staffing problems linked to transport and the fear of more attacks. DM


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