SA businesses count cost of the frenzied looting

SOUTH African businesses yesterday continued to count the costs of property as the frenzied looting and vandalism of shopping malls and industrial parks went up a few notches.

The ongoing violent protests taking place across KwaZulu-Natal and parts of Gauteng since the weekend escalated further with the looting of distribution warehouses yesterday, with more than 700 looters arrested.

Market observers have warned that the volatile situation may now lead to breakdowns of supply chains, leading to food insecurity as some customers go on panic buying amid the emptying of shelves during the unrest.

Intellidex’s Peter Attard Montalto said the situation will not be solved by community engagement kumbaya, but by the breaking of a cycle of impunity through the rapid and overwhelming use of force.

“The situation could peak shortly, but we worry about a long tail given the lack of credible leadership or show of force and then follow-on issues will emerge around food security,” he said.

“While there will be a short-run economic impact, our bigger worry is the negative impact this will have on broader FDI sentiment now previously boxed tail risks are on the table.”

On Monday, President Cyril Ramaphosa warned that the country could face food and medicine shortages as a result of disruptions to supply chains and industries across the two provinces. “These disruptions will cost lives by cutting off the supply chains that sustain our food, health and production systems,” he said.

“This will have lasting effects on our ability to consolidate some of the progress we were witnessing in our economic recovery.”

Police Minister Bheki Cele said they were monitoring the situation on the ground and would make sure it did not get any worse.