SA looting: We are losing more than money, says economist

While at least R70b has gone up in flames during the current unrest spreading through the country, economist Mike Schüssler says we will have lost much more when this is over and the final calculations are done.

The civil unrest that was sparked in KwaZulu-Natal after former president Jacob Zuma was jailed for contempt of court, has resulted in at least 200 shops and shopping centres, trucks and other properties being looted and torched.

Six thousand trucks travel daily between the economic hubs of Gauteng and Durban via the N3, and its closure by protesters is very damaging, says Schüssler. At least R160b in goods are transported daily between Durban and the northern provinces, he says.

While the route closure and burning of trucks have already been devastating, Schüssler predicts that the shortage of fuel as a result of the closure of petroleum refineries will hit South Africans even harder.

WATCH: Journalist Izak du Plessis chats to Mike Schüssler:

South African Petroleum Refineries (Sapref), based in Durban, has declared force majeure – when extraordinary events prevent contractual obligations – and announced a temporary closure.

Sapref is the largest crude oil refinery in the country, with 35% of South Africa’s refining capacity. It said in a letter on Tuesday (July 13) that it had no choice but to stop operations.

“Due to the civil unrest in the country and disruption of supply routes in and out of KwaZulu-Natal, suppliers of materials critical to Sapref operations communicated the suspension of deliveries to the refinery due to safety concerns for their staff and damages to their vehicles on the roads,” it said.

The Automobile Association has warned that South Africa could face fuel shortages in the next few days as a result.

“This will result in a loss of billions of rands, and then we haven’t even looked at banks and hospitals and other institutions that had to close down,” says Schüssler

Also of great concern is the loss of confidence between businesses and consumers, he adds.

“You don’t buy a house or a car during a riot; you need a lot more confidence for transactions like these, because they are long-term commitments,” says Schüssler.

“The same for business investment and employment, which has all gone negative now. I think we will see it in a drop in car sales again; we will see it in a drop in house sales in a month or two. And this will result in the banks making less money, because they finance fewer goods.”

Schüssler says he is convinced that the unrest will damage the South African economy in many ways, but he is as worried about the absence of leadership.

Economist Dawie Roodt blames the lack of leadership on the politics of the ruling party. He published an opinion piece on Wednesday, saying that politics is the reason for our woes.

“Nothing justifies the looting, destruction, and plunder that we have seen in the past few days. Behaviour like this is exacerbated by deteriorating economic conditions, and we have had these conditions for many years: An economy that is in freefall, not because of the pandemic, nor the financial crisis, nor any other reason, but because of a destructive political force that goes by the name of the ANC-coalition government,” says Roodt.

According to Roodt the few good things that happened in South Africa happened not because of the good quality of our political leaders, but because a few institutions did their jobs. Inevitably the ANC’s mismanagement led us to where we are today, he believes.

Schüssler says he counts big business in when he criticises the loss of leadership because they don’t speak up and in the end, small businesses get damaged.

“I don’t feel we’re on a winning wicket now, and we will have huge problems going forward.”