The South African economy could come to a grinding halt if the Economic Freedom Fighters (EFF) planned ‘National Shutdown’ takes place next week.
As the country reels from the rolling power cuts, being grey listed by the global Financial Action Task Force (FATF), interest rate increases, inflation on the up, sky-rocketing fuel prices, a contraction in GDP reported for the fourth quarter of 2022 and a step away from entering a technical recession, the greater business community and economists fear the worst for the country.
The National Shutdown comes hot off the heels of stocks on the JSE suffering one of the worst weeks this year, plunging for the fourth day in a row last Friday to another two-month low.
Frank Blackmore, lead economist at KPMG told Business Report that the planned shutdown for next week will have a negative impact on the economy.
“The impact will be felt in terms of lost time that would normally be used for productive efforts, in other words, contribution towards GDP. As economic activity continues, it would be disrupted. And then if there is any violence or damage to infrastructure, this would be an additional cost on top of the lost productivity time,” Blackmore said.
“The impact would not be something that South Africa needs at this point in this time. We face a number of headwinds and to add to any uncertainties that could take place on Monday, will not look good for the country,” he further told Business Report.
The Durban Chamber of Commerce and Industry has pleaded with President Cyril Ramaphosa to intervene by calling up the South African National Defence Force (SANDF) to provide support and protection for business; for police units and private security to work together and adopt a zero-tolerance approach; and for a clear action plan and communication plans to be shared so that business could prepare accordingly.
The province of KwaZulu-Natal was one of the hardest hit during the mass looting that took place in 2021.
The Durban Chamber said the event had the potential to derail and further harm the country's economy which was in a poor state.
“Businesses are trying to survive, and some are trying to resume their business operations following the 2021July unrest and April/May 2022 floods, even with the current state of the economy due to the energy, water and sanitation crisis.
“We believe a crisis cannot be resolved by using the proposed approach of a shutdown. Ours is to preserve the economy and protect the sustainability of businesses,” said chamber president Prasheen Maharaj.
Meanwhile, Cape Town Mayor Geordin Hill-Lewis has announced he would be filing an application on Tuesday for an interdict against any attempts to incite or participate in looting, vandalism and disruption ahead of the national shutdown planned by the EFF.
The City of Cape Town said it intends to be fully open for business in all respects, come Monday.
Hill-Lewis said while everyone has the right to protest in South Africa, it is undemocratic and unlawful to threaten a shutdown of public life and for businesses to stay closed or face dire consequences.
The mayor also previously posted a video message on his Twitter page saying there would be no shutdown in Cape Town.
“Let me say, in Cape Town it’s going to be business as usual. We will do what it takes to make sure that kids get to school on time and workers can get to work, and our economy can keep running. To those of you who think it is a good idea to try and organise a national shutdown, our economy is already brought to its knees by load shedding, corruption, and so much else,” he said.
BUSINESS REPORT