N3 closure costs economy R1 million per hour, as riots continue

For every hour that the N3 highway in KwaZulu-Natal is closed, at least R1 million is lost to the economy and while the unrest and riots have resulted to damage of property and infrastructure, it has also contributed to the weakening of the Rand.

Due to the violence and unrest in KwaZulu-Natal following the imprisonment of former president Jacob Zuma the past few days, the N3 highway has remained closed to all traffic between Harrismith and Cedara for the safety of motorists and trucks travelling from the Durban harbour.

At least 30 trucks have been vandalized and burned since Friday.

Deliberate economic sabotage

According to agriculture organisation Agri SA, the riots and closure of the highway have affected the agricultural sector, delaying the transportation of approximately R592 million worth of citrus to the Durban harbour for export.

“Any disruption could lead to financial losses for producers and will prevent the products from reaching international markets on time,” said Agri SA president Pierre Vercueil.

The ongoing closure of the busy highway could also lead to billions of Rand in losses to an economy which is already operating at a high debt level, said economist Professor Bonke Dumisa.

This is the first time the N3 highway has been closed between Harrismith and Cedara, he said.

ALSO READ: Pro-Zuma protests: Ramaphosa to host second family meeting in two days

“This tells you that every time the N3 is closed… more than R1 million is lost per hour. When you close for the whole day from Harrismith to Cedara, you are simply saying we are going to lose billions of Rands… Where will this money be coming from with the public servants saying they don’t want to accept the proposed wage increase? It means people are deliberately saying they want to sabotage this economy and they want to sit in ruins, and I think they may succeed in doing that,” he said.

“A long time coming…”

Economist Dawie Roodt said he long predicted the civil unrest due to the mismanagement of the fiscus for the past several years.

He said poverty, which was contributed to by the country’s leaders, is what led to the current criminality of looting and rioting and this is all happening at a particularly bad time, he said.

“The direct impact to the economy is on infrastructure, people prevented from going to work and from going to shops, destruction of property. It’s probably running in the hundreds of millions. But what we can’t calculate is the damage done to the country’s image – there is no way to measure that impact. Businesses run on trust and confidence and it’s being destroyed right now,” he said.

Due to the unrest and criminality, the Rand also tumbled throughout Monday, from R14.30 to the dollar to R14.47, and from R16.17 to the Euro, to a weaker R17.13 by the afternoon, Dumisa said.

ALSO READ: SANDF troops deployed to Gauteng and KZN

“The things that determine global currency movement are the economic and political certainty. How our government is going to act on this will determine what happens next. The other thing which has contributed to the [weaker Rand] has been the extension of the [lockdown] restrictions on business by the President.”

“But as for the real estimate of how many billions we have lost already and going to lose will become an academic exercise. The point is, South Africans are looting their own economy and we can’t come back from that,” Dumisa said.

rorisangk@citizen.co.za