Some companies have aired cation over social unrest in South Africa leading up to the 2024 national elections, while others warn that the country could experience social and political instability beyond 2024 due to a stagnant economy and high unemployment – a major risk to businesses.

These cautionary statements were found in the company’s annual reports, which often highlighted the challenging economic environment faced in 2023.

Astral Foods chairman Theuns Eloff noted a main concern was that the South African economy had stagnated, with negligible economic growth. “Soaring unemployment rates, deteriorating consumer spending, and a weak currency are all proving detrimental to any real growth,” he said.

This bleak outlook is compounded by the prospect of heightened social and political instability leading up to next year’s election, he added.

“We expect that the socio-political instability in South Africa will continue until the National Election in 2024, and possibly beyond that,” Eloff warned.

Eloff’s sentiments echo those of other companies, such as pulp and paper manufacturer Sappi and governance expert Dr Sam Koma, which noted similar risks.

Sappi employs more than 4,500 people nationwide and said it is keeping a close eye on potential social unrest as the country enters an election year amid poor service delivery.

Sappi suffered a more than R220 million loss of production after civil unrest in July 2021 caused disruptions to raw material supplies and forced the temporary closure of the Saiccor, Tugela and Stanger mills in KwaZulu-Natal. It was also forced to temporarily close them in response to flood damage in 2022, reported Business Day.

“As the country prepares for the 2024 national elections, political activities can be expected to intensify,” added Sappi. “This could have potentially negative consequences for some of our operations.”

Koma noted that protest action picks up because communities know politicians will be forced to do something about their demands as they need votes for the upcoming elections.

Koma said most South Africans face a cost of living crisis, forcing them to forfeit some of their basic needs while unemployment, poverty, and inequality remain elevated.

When this is coupled with communities saying they have been raising service delivery demands to local municipalities and politicians, but no action has been taken, protest is their only option.

Koma warned that these protests tend to turn violent as the police fail to respond appropriately due to capacity constraints and a lack of information within the security cluster, which often leads to material losses like those experienced during the civil unrest in 2021 – which could hurt an already weak economic growth forecast for South Africa’s GDP next year.

source:Social unrest warning for South Africa as national elections loom – BusinessTech