Govt 'working overtime' to help businesses recover and restore investor confidence since unrest

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Taxi drivers and residents of Durban help to clean up the city in the wake of looting and destruction.
Taxi drivers and residents of Durban help to clean up the city in the wake of looting and destruction.
Netwerk24
  • Government is working overtime to help businesses recover amid concerns over a longer-term knock to investor confidence caused by the recent unrest.
  • A survey estimates that 10 200 jobs have potentially been affected.
  • Of the businesses surveyed, 60% had insurance and the rest were uninsured for unrest of this nature.

Government is working overtime to help businesses recover amid concerns over a longer-term knock to investor confidence caused by the recent unrest, Minister of Trade, Industry and Competition (DTIC) Ebrahim Patel said during a media briefing on Thursday.

The DTIC and the Department of Small Business Development are working together to deal with damage caused by recent looting and rioting in parts of Gauteng and KwaZulu-Natal. Talks are also under way with investors and the business sector – both formal and informal, Patel said.  

According to Patel, who addressed the media on behalf of his department and Small Business Development Minister Khumbudzo Ntshavheni, initial surveys suggest the losses have been extensive.

A survey by the two departments among more than a thousand businesses in affected areas showed that the overwhelming majority – some 900 – either had damage to their property or stock, had been looted, or had their supply chains disrupted.

The respondents included 255 manufacturing companies and 265 retailers.

"Significant damage totalling more than R5 billion in terms of loss of assets and loss of business are estimated by the companies surveyed. They also estimate that 10 200 jobs are potentially affected," said Patel.  

Of the businesses surveyed, 60% had insurance and the rest were uninsured for unrest of this nature.

About 43% of the respondents said it would likely take them less than a month to re-establish normal business operations, but 7% said it could take them more than a year.

Picking up the pieces

"The DTIC and the Department of Small Business Development have worked closely together to deal with the challenges arising from the looting and damaging of businesses during the unrest.

A priority is to address employees' loss of wages during the reconstruction phase, Patel said.

Teams from the two departments are also assisting businesses to fast-track their Sasria claims. 

Initial responses included allowing competition regulation exemptions so that businesses can work together to supply essential goods, foods and healthcare items. Patel said other sectors might in due course be allowed to do the same.

"During the first week of violence and looting we provided support to companies under attack and whose supply chains were under pressure, or who felt they were under threat of attack," added Patel.

Other early responses included efforts to quickly re-establish supply lines and address supply shortages, starting with opening the N3 corridor and the Durban port.

Packaging suppliers were helped to find alternatives and the auto industry was given assistance to keep the component supply chain moving, Patel said.

President Cyril Ramaphosa and Finance Minister Tito Mboweni have since outlined economic support measures to help affected businesses.  

"The DTIC and the Department of Small Business Development could get a total of R3.9 billion reprioritised, supplemented or made available in addition to support businesses to get back to full operations.

"We expect this additional amount will increase to above R4 billion with the support from other entities our two departments are engaging with," said Patel.

Calming fears

Patel also addressed concerns over the future of key companies in the affected areas. Toyota raised concerns with local authorities regarding the impact of the unrest and looting in KwaZulu-Natal on the global giant's operations and investments in the area, Fin24 reported.

"Toyota at some stage indicated concern about its operations. The DTIC met with Toyota and they said in a statement afterwards that, as result of these engagements, they are satisfied that their concerns are being addressed and they were ready to resume business.

"We also spoke to the global leadership of Ford and other global businesses," said Patel.

Community organisations also had representation at discussions and about 50 site visits were done.

"The purpose of all those engagements was to ensure we can send a message around that we can coordinate the security of businesses and infrastructure," said Patel.

In the pipeline

In the meantime, he called on South Africans to buy locally made products to support recovery efforts.

"We are still looking for additional ways to support businesses whose basic operations have been disrupted. This could include enabling credit guarantee or loan guarantee schemes to include development-finance institutions and non-banking institutions in the process," said Patel.

"Maybe there could also be tax provisions to enable businesses to obtain equipment and have buildings constructed or expanded. We want to support businesses of all sizes to get SA working again."


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