Dismal outlook for Gauteng in wake of R3.5-billion looting costs and ongoing Covid crisis
Gauteng Premier David Makhura provided an update on the economic recovery plan in the province in the aftermath of the rioting and destruction, which has cost the province billions of rands.
The destruction to insured premises and stocks in Gauteng in connection with the recent violence and unrest that gripped the province is estimated at R3.5-billion, Gauteng Premier, David Makhura announced on 30 July, 2021. The preliminary R3.5-billion in damages does not include uninsured township businesses.
Addressing the media on Friday, 30 July, Makhura and Gauteng MEC for Economic Development, Agriculture and Rural Development, Parks Tau provided an update on the economic reconstruction and recovery plan for the province, following the looting and destruction of property earlier this month.
Preliminary research reveals that 14,500 jobs have been affected by the unrest in the province, along with 30 shopping malls in areas including Ekurhuleni, Johannesburg, West Rand and Sedibeng, said Makhura.
No factories were damaged during the violence in Gauteng, but there has been “significant destruction” to small business operations, including spaza shops and informal traders. “They were severely affected by the unrest; they lost income and some of them lost their own stock during the looting,” he said.
“The unrest has had a terrible impact on the Gauteng economy.”
Gauteng’s severe third wave of Covid-19 infections, coupled with the implementation of harsher lockdown restrictions had already had a grave impact on Gauteng’s economy, said Makhura. The unrest comes while the province is still “grappling with the impact of Covid-19 on the entire economy, the supply chains and value chains in Gauteng, and also on the small businesses in our province,” he said.
“The social and economic impact of both Covid-19 and the unrest is severe for the communities on the ground.”
However, Premier Makhura said the Gauteng provincial government would not be declaring a provincial state of disaster. This comes after KwaZulu-Natal declared a state of disaster in the province, on Thursday.
Makhura added that the Gauteng government is taking stock of the dithering response of law enforcement and government to the violence, saying that it will be working with national government to ensure law enforcement agencies and task forces are “up to scratch” and prepared.
It is anticipated that Gauteng will experience “muted economic growth” following the riots, said Tau. Echoing the Premier’s remarks, Tau said that the reported damage is largely limited to structures and loss of stock. Most businesses affected are in the retail sector, he said.
The reconstruction of destroyed property is at different stages however, “we are anticipating that many of the facilities will open from August and September,” said Tau.
“A number of concerns have been raised by South Africans about how government has responded to the challenges — whether the institutional capacity is geared to respond to these challenges — and indeed there are matters of confidence we need to address as we develop a response package,” said Tau.
Tau said the Gauteng government is in the process of implementing a “war room” that would consolidate the efforts of different departments and agencies relevant to the province’s response plan, and accelerate economic initiatives in the wake of the violence.
He said that government is also considering incentives to support the rebuilding of businesses across the province.
“We are accelerating the implementation of the Township Economic Development Programme and the Township Economic Partnership Fund, and we are looking at interventions with regards to food security and income support,” said Tau. DM
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