July Riots repeat warning from Sasria CEO

[Nat Quinn]

South Africa Special Risk Association (Sasria) has warned that South Africa risks a repeat of the July 2021 riots if youth unemployment and load-shedding are not addressed.

The state-owned company’s CEO, Mpumi Tyikwe, told BusinessDay that “the biggest worry is youth unemployment…the youth are sitting and idling”.

Sasria specialises in covering losses from civil unrest and other ‘freak’ events like flooding. The company was overwhelmed by claims worth over R30 billion from the July Riots.

Other things on his mind include “load-shedding, less grid failure but load-shedding. It would be a big worry if it can go on for a sustained period.”

Gauteng co-operative and governance and traditional affairs MEC Mzi Khumalo echoed comments from Tyikwe, saying a failure to respond to the unemployment crisis could “lead to a revolution in this country”.

“All hands are needed on deck to address the ill. If we don’t do that, those young people’s anger can be ignited,” he said.

Youth unemployment reached 62.1% in the first quarter of 2023 and is up to 71.2% using the expanded definition of unemployment.

The total number of unemployed South Africans is up to 7.9 million.

Financial advisory firm PwC said poor economic performance and the subsequent rise in unemployment exacerbate the social challenges South Africa already faces.

If South Africa is unsuccessful in addressing unemployment, it will face growing social unrest.

According to Municipal IQ, the volume of protests in South Africa surged at the beginning of 2023. The surge was mainly attributable to increased load-shedding.

This concern is echoed by business leaders, with two-thirds of Southern African CEOs expecting to face disruptions from social unrest in the next 12 months.

This was revealed in PwC’s 26th Global CEO Survey and Africa Business Agenda Report for 2023.

PwC raised the July riots of 2021 as an example of what social unrest could look like in the next 12 months. There was looting, violence, disruption, and the deaths of 354 South Africans during the riots.

PwC measured the impact of the riots on the South African economy at R50 billion.

Old Mutual CEO, Iain Williamson

Old Mutual CEO, Iain Williamson, warned that South Africa would likely experience social unrest before elections next year, with a grid collapse also on the cards.

In the short term, South Africa will see a lot of risk and instability, with significant uncertainty about how the 2024 elections will play out.

“Once we get beyond the election next year, the outlook is better”, with it being the most likely flashpoint for widespread unrest, according to Williamson.

Social unrest can potentially do billions of rands worth of damage and push the South African economy into a deep and protracted recession.

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.

Business Leadership South Africa’s CEO, Busi Mavuso, said in February that South Africa faces an “Arab Spring-like revolt” if the government does not take decisive action.

Mavuso said, “We are in deep trouble” and “need meaningful and targeted interventions that will ensure we don’t end up in the doldrums, and we don’t end up as another failed African state”.

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

 

source:July Riots repeat warning from Sasria CEO – Daily Investor

[Author]

Posts