The rand sank 1.86% on Monday last week to R14. 36 against the greenback. Infact it tumbled against all the six major vehicle currencies as violence over Zuma’s 15 month jail term continue.
Violence is mostly centered in the provinces of KZN and Gauteng.The two are heavy economic hubs for the South African economy with Gauteng extending the same status into the rest of Africa.
However though am against looting but I believe the protest is acting as the Sarajevo Assassination(for those who did European histrory).
Historically, South Africa is protests prone as the mass use the same as a means of voicing their frustration. Economic hardships and hunger are sweeping across the nation mainly as the pandemic restrictions are taking it’s tall on the 🌈 economy. The country has long a history of resorting to protests to air greviances, and this may be the one democratic right many feel they can change public policy and action.On average the country has been experiencing 2.26 protests daily for the past seven years(ISS).
The most industrialized economy of Africa contracted the most in a century last year and lost 1.4million jobs as restictions to curb the pandemic weighted on the national output and forced many businesses to cut wages, furlow staff or permanently shut down. Puting it into perspective, it took the country six years to add 1.4million jobs into it’s prepandemic economy( the World Bank).
South Africa’s unemployment rate stood at a record 32.6% in the first quarter of 2021, the third highest of 82 countries tracked by Bloomberg. The rate has remained above 20% for the last two decades despite the expansion of the economy by more than 5% in the beginning of the millennium.
Given the above, one may find it at pains to distance the current protests away from the economic quagmires the citizens are going through.
The mass which is at the receiving end economically may be venting their frustration over the underlying disparities in health care, education, financial inclusion , technology etc.
The difference between the “haves” and the “have-nots” is widening not only in South Africa but across the Globe. Right now Cuba is experiencing the same.
Responses to the pandemic has witnessed the rise in geopolitical tensions that threaten stability. Lost generations are starting to test social cohesion within the borders of South Africa, exacerbating geopolitical fragmentation and the whole global economic fragility. State collapse and multilateralism are emerging as long term threats and being witnessed by the increase in stalemates and flashpoints across the world(WEF GPRS) as is in South Africa today.Social fractures are widening by the day.
Assuming the protests continue as the their organisers are hyming then capital flight is going to be amplified.Remember the process started sometime ago when the economy’s rating status nosedived to junk status.
The rand will continue on the downward trend,industries will close due to lack of capital, unemployment will skyrocket, inflation etc.All this will continue to widen the fractures within the societies leading to intensified stalemates and protests and the worst case scenario- civil unrest.
For countries like Zimbabwe,negative externalities may have disastrous effects on our economy and the general populace.
It’s a pity that some of our berethen here are marvelling at the skimishes in South Africa forgetting that we are heavily dependent on our beloved neighbour.It is the time we start to be thy brothers keeper and start looking for solutions in support of our neighbour.
The uncertainty most African economies are facing out of the South African protests are far reaching and very painful.Africa being Africa,there is need to help one another where we can, be it economically, politically and or socially.An injury to one of us is an injury to all. South African economy is our oxygenated bottled unit.