The National Council of Provinces (NCOP) held a debate on the fiscal and economic impact of the July 2021 public unrest. The purpose of the debate was to assess the Department of Trade, Industry and Competition’s mitigation measures to assist businesses directly affected by the riots, by ensuring that their operational capacities are restored and job opportunities secured.
Giving context to this debate, the NCOP’s House Chairperson for Committees, Mr Jomo Nyambi, said the plenary was a follow-up to the one that the NCOP had in August, which stressed the need to instil peace and stability, and to rebuild an economy that is inclusive and resilient enough to eradicate poverty, unemployment and inequality.
He further emphasised that the economic impact of the unrests on South Africa’s gross domestic product was immense. “The information that the Department of Trade, Industry and Competition will share with us today will be critical in informing our oversight on the department’s mitigation measures going forward,” said Mr Nyambi.
However, he warned communities that it is a myth that the government listens better when they destroy property. “This is a regressive condition that this debate seeks to change.”
Addressing the NCOP delegates, the Deputy Minister of Trade, Industry and Competition, Ms Nomalungelo Gina, said: “We have collaborated with all our affected stakeholders to ensure that affected business regain their full capacity, that key supply chains of food and medicine are secured and there is an unhindered flow of goods.” In addition, the government has gazetted exemption and rebates to businesses that want to import such goods, if they are not available locally.
Ms Gina said the National Empowerment Fund allocated R3.7 billion to businesses directly affected by the unrests. To date, a tailored compensation fund of well over R1 billion has been disbursed to qualifying businesses. This includes R100 million allocated for technical and financial support to businesses located in townships, rural areas and small towns.
She reiterated that the July unrests disrupted the economy and plunged it into a tailspin. Massive job losses could result if government did not immediately react by implementing mitigating measures.
NCOP delegates asked Ms Gina for reassurance that such riots will not happen again. She admitted that this is a difficult thing to do, but assured her listeners that measures have been put in place to prevent such incidents in the future.
NCOP delegates also asked what the government has done to restore the trust of foreign investors. Ms Gina replied: “We are working very hard to convince investors that what happened was unfortunate and we are doing our level best to ensure that such incidents don’t happen in future. We are doing all this to regain our credentials as a preferred investment destination.” She pointed to the recent Intra-Africa Trade Fair in Durban as a testament that investors still see South Africa as a place to invest in.
NCOP delegate Mr Dennis Ryder stated that the biggest “cost driver” of these unrests was theft. “We now talk of recovery and funds invested in that. It may be well and good to do so, but how many instigators of these unrests have been arrested thus far?” Ms Gina replied: “That is something that I am not in position to talk about because it doesn’t fall within our executive responsibility, although we get a regular update on that. Currently, I can’t say how many arrests have been made.”
Other NCOP delegates asked how much of the support funds went to informal traders. “I will get a consolidated report on that and forward it to the NCOP, because I don’t have the actual figures off-hand. But I can assure members that a lot has been done to support, for instance, even hawkers. We, in fact, held them by hand to restart their small businesses,” Ms Gina replied.
She said the department’s mitigation measures have saved well over 34 000 at-risk jobs. “We will do what we can to ensure that businesses affected by the unrests get the necessary assistance, whether big or small, formal or informal.”
23 November 2021