South Africa Reaches Inflection Point as Unrest Continues
*Image sourced from News24
While South Africa navigates its way out of the pandemic coronavirus, fighting the more than 15 000 daily infections recorded in a day, it finds itself in what John Loos refers to as an inflection point where grumpy citizens out of hunger and minimal to no employment opportunities vent their frustrations about governance in the country.
Speaking in a REI Webinar sponsored by Opportunity Private Capital, FNB Economist, John Loos says the commotion in Gauteng and KwaZulu Natal provinces was bound to prevail, as the economy has been stagnant in South Africa for a while.
“The more turbulent moment has been coming for years because of the stagnation of the economy and the structural inefficiencies in our country. When you have an economy that is going no where and thus not benefiting the people, you will have heightened anger among the people of that economy and events like these will occur often.”
“As the lack of economic opportunities due to lack of economic performance mounts, the anger and frustration starts to mount as well as the effects of poverty. This translates and transcends to even the affluent class, because then there is more competition for reach and as a result there will be unrests in the country. All the unrests should be viewed as the catalysts for the change of policies and systems,” Loos says.
Alluding and adding to John’s thoughts and observations, Founder and CEO of ALT Capital Partners, Ben Kodisang says with the highest youth unemployment rate in the world, and the rate of inequality and poverty in South Africa, this has been a ticking time bomb.
“Covid19 has added fuel to the fire, and the current political atmosphere has not been of assistance to the current unrests. A lot of people have seen through the Zondo commission of inquiry into state capture, among other interventions declared to investigate corruption, how state funds have been looted, and with no jobs this is just the reaction to all of this, to say the least,” Kodisang says.
“Recently the reactions of the currency to these events have been quite alarming. From a property perspective the reactions have not been pleasant at all, with over R500 million worth of damages and with the supply chains being affected it won’t be any easier,” he adds.
Kodisang believes that players in the industry need to look for ways to resuscitate the industry and their businesses. He says this is the time for investors to think more about Risk management about the protection of their properties from disruptions and the protection of their income.