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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.
Williamson issued this warning when addressing Bloomberg’s Future of Finance Conference on 1 June along with other South African business leaders.
Williamson said South Africa faces three prominent risks in 2023:
- Social unrest
- Grid failure
- Sanctions from the country’s stance on the Russia-Ukraine conflict
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.
A grid failure is highly unlikely, but it remains a risk that businesses must be aware of as it will have catastrophic consequences. A blackout can result in unrest, looting, and riots.
Fellow panellists joined Williamson in calling for the government to engage with businesses in building a better future for South Africa.
They said that more action is needed from the government to tackle the energy crisis, logistical inefficiencies, and rampant crime.
Widespread warnings from business sector
Business Leadership South Africa CEO Busisiwe Mavuso Williamson joins the chorus of South African CEOs and institutions warning about the heightened risk of social unrest.
PwC’s 26th Global CEO Survey revealed that over two-thirds of Southern African CEOs expect to face disruptions from social unrest in the next 12 months.
46% of CEOs in Africa and 67% in Southern Africa expect their companies to face high or extremely high exposure to threats from social unrest.
PwC says the heightened fears of social unrest in Southern Africa are due to the region being the world’s most unequal based on income and consumption per capita.
It said the July riots were an example of social unrest in the future. There was looting, violence, disruption, and the deaths of 354 South Africans.
Business Leadership South Africa CEO, Busi Mavuso, said in February that South Africa faces an “Arab Spring-like revolt” if the government does not take decisive action.
Mavuso says that “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”.
This warning has been followed by business leaders in South Africa, with MTN’s CEO, Ralph Mupita, warning that South Africa is at risk of becoming a failed state.
The fear of social unrest is not only coming from CEOs.
Allianz’s Social Risk Index (SRI) has also identified South Africa as “highly vulnerable to social unrest in the next 18 months”.
The South African Special Risk Insurance Association (SASRIA) has also warned of a repeat of the July riots, saying that it cannot afford to cover the country’s businesses should it see a repeat of the riots in the coming years.
SOURCE:Social unrest and total blackout warning from Old Mutual CEO – Daily Investor
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