Post - 2021-07-21


‘Road to recovery will be long and hard’



THE road to recovery for businesses with be a long one, says Nigel Ward, the president of the Durban Chamber of Commerce and Industry NPC. The organisation has partnered with eThekwini Municipality to assess the impact of the civil unrest. "As it stands, the economic impact estimates are more than R1.5 billion in loss of stock, more than R15bn of damage to property and equipment. There were more than 50 000 informal traders affected and 40 000 businesses affected and a bigger portion might not come back," said Ward. He said more than 150 000 jobs were at risk and close to 1.5 million people were at home with no income, due to the unrest. “The total impact to the eThekwini GDP is estimated at more than R20bn. The unrest has had a negative impact on our local and provincial economy and will, undoubtedly, impact the South African economy because KwaZulu-Natal’s contribution towards South Africa’s GDP is at 16%. “The disruptive activity was damaging to the economic infrastructure and threatened job security and livelihoods as workers have stayed at home and some were placed on short-term (employment)." He said the province would recover but it wouldn’t be easy. “The road to recovery will be a long and hard one. As organised business, we are already in engagements with our members and stakeholders to build and implement workable solutions geared towards recovery. We should expect further delays to recovery due to the Covid-19 pandemic." Ward said the Durban chamber believed that if more people emigrated because of the civil unrest, South Africa ran the risk of losing critical skills and professionals who could contribute positively to the economy. "We strongly believe that government needs to work closely with citizens, especially youth, to regain their trust. We have also not received confirmed news of companies wanting to disinvest. However, we believe the situation has the potential to translate to a withdrawal of foreign direct investment." He said investors were seeking destinations with low risk, high returns, and political stability. “The government needs to regain the trust of the international business community.” Andrew Konig, the president of the SA Property Owners Association, said businesses had struggled as a result of Covid-19 and were suffering because of the criminal activity and rioting. “During 2020 and 2021, landlords had to bear the full brunt of the lockdown, and continued making payment of utilities and property rates to municipalities even when properties were not rent-producing.” He said the association had calculated that some 800 stores had been looted and 100 malls had either been burnt down or had significant fire damage, including many distribution centres, particularly in Durban. The association said it would take at least two years for malls that had been burnt to the ground to reopen, and a couple of months for those with relatively little damage. The association's statistics showed that more than 100 malls, shopping centres and liquor outlets and distributors were looted and damaged. It revealed that more than 1 000 ATMs and about 300 banks and post office outlets were vandalised. Brett Tungay, the East Coast chairperson of the Federal Hospitality Association of SA, said the unrest had a devastating effect on the tourism and hospitality industry. “Since (the) violence, across the province, we are seeing occupancy rates in the single digits and sitting at zero. “Most of the tourism industry has been running at a loss for the last two months due to the pandemic and lockdown regulations and, so far, we’ve had no government assistance. “We are awaiting feedback from our restaurant members on the extent of the damage. Over 300 malls have been destroyed and looted. So, even if we take it at a conservative figure of two restaurants per mall, that is already 600 restaurants gone. “Banks don’t want to lend to hospitality and tourism businesses at this time. In the next two months, we are probably going to see unprecedented bankruptcy in tourism and hospitality. “Government needs to allow the sale of alcohol in the industry, they need to make tax exemptions, municipalities need to help with rates in these industries. If this industry is to survive over the next six months, we need government help,” said Tungay. The unrest has also seemingly sparked a greater interest in emigration. New World Immigration, a Cape Town agency that specialises in immigration and emigration services, among others, said it had noted a 1 000% increase in related queries.



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