- The stolen goods are no different from counterfeit products, says acting Minister in the Presidency Khumbudzo Ntshavheni.
- She described this as the "basic economics" of the matter.
- Ntshavheni’s statement comes following calls and questions from the public for goods retrieved from looters to be donated or auctioned off and the proceeds used for relief.
Goods recovered after the recent spate of looting and unrest have to be destroyed to protect the economy, says acting Minister in the Presidency Khumbudzo Ntshavheni.
Ntshavheni’s statement comes following calls and questions from the public for goods retrieved from looters to be donated or auctioned off and the proceeds used for relief, particularly for small businesses.
But the minister, who was speaking at a media briefing on Wednesday on government’s plans to rebuild the country’s economy after the looting, said that it was not possible to do anything but destroy the products.
Last week KwaZulu-Natal and parts of Gauteng faced unrest including looting and destruction to property, as people made off with goods like appliances, clothing and food from manufacturers and stores.
The unrest, which impacted about 200 malls and 40 000 businesses, could cost South Africa about R50 billion in lost output and 150 000 jobs are at risk.
Ntshavheni said since the goods would have to be sold at a lower value because they are no longer brand new, businesses would lose out.
"The stolen goods are no different from counterfeit products, and that’s why we destroy them. Because … the manufacturers of those goods, are not going to generate an income from those goods that enables them to pay employees to continue with their businesses," Ntshavheni said.
However, destroying the items means that the manufacturers can recoup their losses by making other products and selling them in the market, according to Ntshavheni. The government also gets to benefit because it can collect its tax revenue.
"And that is the basic economics … when you buy counterfeit goods at cheap prices, you are costing the economy not only in terms of tax revenue,” she said.
Ntshavheni pleaded with South Africans to refrain from buying stolen and counterfeit products, saying most of the impact is felt by small businesses.
She further said that the government would organise a “national conversation" where a panel of experts made up of economists and social partners would explain the impact of the unrest on the economy.
South Africa has begun plotting its recovery following the unrest, with President Cyril Ramaphosa meeting with the private sector on Tuesday to discuss the way forward.