SNAPSHOT: Extensive rioting and looting in South Africa subsides, but underlying socio-economic grievances are likely triggers for further unrest


SNAPSHOT: Extensive rioting and looting in South Africa subsides, but underlying socio-economic grievances are likely triggers for further unrest

Context:

  • Since Friday (9 July) the provinces of KwaZulu-Natal (KZN) and Gauteng have been deeply impacted by widespread riots, looting, and growing inter-communal tensions. This is the worst level of violent unrest since the 1990s and the end of the apartheid regime.
  • While the unrest has been concentrated in KZN and Gauteng, more isolated and sporadic unrest has been reported across at least four more provinces: Eastern Cape, Mpumalanga, Northern Cape, and Western Cape. As of Thursday (15 July), at least 118 people had been killed, hundreds injured, and more than 2,205 people arrested.
  • These public disturbances were triggered by the jailing of former president Jacob Zuma on Wednesday (7 July). He was sentenced to 15 months in prison in late June for contempt of court after refusing to appear at a corruption inquiry investigating extensive corruption under his presidency. This is in line with our warnings at the end of June.
  • However, the looting became much more widespread and continued to escalate until Wednesday (14 July), forcing the government to deploy the 2,500 South African National Defence Forces (SANDF), and calling in reservists and additional police forces to quell the unrest. SANDF deployment was increased to 25,000 on 15 July.
  • While pockets of unrest have persisted in KZN, the immediate security threat has largely dissipated. Nevertheless, grievances associated with socio-economic conditions persist, which means that the risk of further violent unrest is high over the coming week.


Extensive commercial disruption and impact

  • The unrest has affected the arteries of the South African economy, with Gauteng hosting the country’s commercial hub Johannesburg and the capital Pretoria, while Durban hosts the country’s two largest ports: Durban and Richards Bay.
  • Hundreds of warehouses, retail and liquor stores, restaurants, malls and local markets have been completely ransacked or burnt down.
  • State-owned transport operator Transnet declared force majeure on its 688km NATCOR railway line, which transport mining products  and agricultural produce to Durban and Richards Bay via Gauteng, as workers were unable to report for duty safely. In addition, Danish logistics group Maersk shut down all its depots, warehouses, and cold storage facilities due to the unrest.
  • The N3 highway, which connects Durban to Gauteng, was also closed for nearly a week but was had reopened on Friday (16 July).
  • Shell- and BP-owned South African Petroleum Refineries (SAPREF) announced the suspension of its operations in Durban, cutting more than a third of the country’s petroleum supply.
  • The supply-chain disruptions have led to rationing of fuel and food supplies in some of the worst-affected areas.
  • Rebuilding after the riots will be a serious challenge, amid the government’s reduced fiscal space caused by mounting debt-servicing costs in the wake of the COVID-19 pandemic and associated restrictions. Investor confidence has already been seriously damage, with a series of macro-economic indicators worsening over the past week. These include a drop in the value of the South African rand to the US dollar which saw its sharpest decline since February, while government bonds also took a hit.
  • The security forces’ and authorities’ ostensibly slow reaction to the extensive level of unrest is also likely to undermine trust and investor confidence in the government’s ability to deal with further protests and rioting.

Short-term (<1-3 month) security implications

  • Inter-communal relations have been severely damaged. On the one hand, some looters specifically targeted foreign-owned businesses, including those owned by people Indian or South Asian descent as well as Sub-Saharan African migrants. On the other, the looting as inflamed tensions between South Africa’s domestic communities, and has seen the emergence of heavily armed community militias patrolling entrance and exit points into residential communities in a bid to stop looters from entering. In turn, this has also led to friction between individuals legitimately looking to buy groceries and local residents.
  • According to media reports on 16 July, intelligence officials are beginning to allege a more concerted campaign at instigating the unrest in response to Zuma’s jailing. And law enforcement has arrested dozens of municipal government officials and politicians they suspect of spreading such calls. Such efforts will undoubtedly cause a further rift within the ruling African National Congress (ANC) party, where the left-wing Radical Economic Transformation faction, which is loyal to Zuma and particularly strong in KZN, may be pointed out as the main culprit. In turn, such friction may further exacerbate inter-communal and ethnic tensions over the coming month.

Forecast and advice

  • Serious efforts are already ongoing to engage various political and community leaders, civil society organisations, and unions to reduce the protest risk in the immediate term (<1-2 weeks). Nevertheless, municipal elections scheduled for the end of October may become a flashpoint for further unrest, particularly in KZN where Zuma loyalists hold many seats.
  • In the immediate term (<1-2 weeks), travel by staff in the worst-affected areas should be kept to a strict minimum, and extreme vigilance should be practised around retail shops, food stores, and filling stations, which may become flashpoints for unrest in the coming week.
  • Operations managers should assist by mapping out some of the worst-affected areas, and the accessibility of essential goods and services like healthcare and pharmaceuticals there.