On 29 June 2021, the Constitutional Court sentenced former president Jacob Zuma to 15 months in prison for contempt of court and on 8 July he turned himself in to the police to begin serving his sentence. What followed was nine days of civil unrest, the worst experienced in South Africa since the end of white minority rule in 1994. The unrest was largely limited to the provinces of KwaZulu-Natal (KZN) and Gauteng, which together account for nearly 50% of the country’s GDP. Despite experiencing financial losses and damage to property, companies stood by employees and communities in the ensuing economic crisis, says Connie Huma.
Tracing the causes of the civil unrest
The civil unrest that took place in July 2021 followed internal power struggles within the ruling African National Congress (ANC), which came to a climax when former president Jacob Zuma was jailed for contempt of court. Officials, including President Cyril Ramaphosa, believe that while the civil unrest was triggered by Mr Zuma’s arrest, protests were quickly hijacked by criminal elements bent on destabilising the country. Linked to this is the desperation and disgruntlement resulting from unfulfilled expectations following the dawn of democracy in 1994.
South Africa’s reality as an extremely divided society with complex socioeconomic challenges is well documented. Although it is one of the most advanced economies on the African continent and classified as an upper middle-income country, South Africa is rated as having the highest income inequality in the world. The country is also plagued by high rates of poverty and unemployment. According to Statistics South Africa, unemployment in South Africa reached a record high of 34% in the second quarter of 2021.
The high rates of inequality, poverty, and unemployment confronting South Africa have been exacerbated by the ongoing Covid-19 pandemic. Due to the pandemic, economic activity in the period preceding the civil unrest decreased by 7%, resulting in job losses and contributing to nearly half of South Africa’s adult population living in poverty. This has translated to widespread hunger and desperation among an already vulnerable population. Failing municipal services due to ineptitude and corruption, a slow-paced economic recovery under the tattered banner of President Ramaphosa’s New Deal, and the infighting among various factions within the ruling ANC are worsening the situation.
Experts have also highlighted the role of false reporting in fuelling the civil unrest, in particular the disingenuous and sophisticated use of social media. While some messages served a genuine purpose to alert people to dangerous situations, many contained fake news or images taken out of context with the aim of deepening the sense of panic and alarm felt by many South Africans at the time.
Taken together, these factors point to a wider problem linked to South Africa’s complex past, socioeconomic divisions, and enduring trauma. Under these circumstances, the arrest of the former president served as a tinder box in an already volatile context, triggering widespread violence and looting.
The immediate impact of the civil unrest
The civil unrest had an immediate and wide-reaching impact. Images posted on local and international media showed wanton destruction to property reminiscent of a country at war with itself and whose leaders seemed incapable of providing the guidance and direction that were needed to contain the crisis. Rioters in Zuma’s home province of KZN blocked major highways and burnt trucks. At the same time, they instigated the widespread looting of shopping malls, warehouses, and factories. The unrest quickly spread to Gauteng where protesters also blocked highways, burnt trucks, and looted shopping malls. While participants targeted high-value goods such as flat-screen televisions, branded clothing and mobile phones, they also took basic food stuffs and toiletries, underscoring the levels of desperation brought about by the high levels of poverty and inequality in the country.
Small and medium enterprises (SMEs) were among the hardest hit. According to a study conducted by non-profit, BeyondCOVID, which specifically looked at the impact of the civil unrest across specific sectors, small, medium, and micro enterprises (SMMEs) accounted for 89% of the businesses affected by the looting
and vandalism. This happened at a time when these businesses were already struggling to cope with the impact of the Covid-19 pandemic. The research by BeyondCOVID also found that SMMEs stood to lose an estimated R3.4 billion a month in revenue as they resumed operations. Some of the businesses have since closed permanently.
The wider economy was also affected, as were neighbouring countries such as Mozambique, Zimbabwe and Swaziland, whose economies are closely tied to that of South Africa. This is largely because the protests targeted key economic centres and infrastructure, including two strategic ports, shopping malls, and major arterial routes.
The most affected sectors include retail, accommodation, food, health, and social services. A report published by the South African Property Owners Association shows the turmoil could cost the country an estimated R50 billion in lost output. Economists see the damage shaving as much as one percentage point off economic growth in the 2021 period. While South Africa had not been expected to return to pre-pandemic levels of economic output before 2023, the civil unrest moved economic growth forecasts even further back.
The world’s largest retailer, Walmart, reported that more than 40 of its Massmart stores were looted and a distribution centre near Durban was burnt down. Protesters gained access to and made off with merchandise from several Massmart-owned stores, including Makro, Game, Cash & Carry, and Cambridge Foods. Similarly, South Africa’s largest grocery retailer, Shoprite Group, suffered financial losses and disruptions to its operations, with over 200 of its stores affected by looting and vandalism in KZN and Gauteng.
In addition, 1 400 ATMs and bank branches were vandalised, according to The Banking Association South Africa. Ithala, a state- owned company that delivers financial services to the unbanked and rural communities in KZN, is one such example. The company was negatively affected as a result of the looting and complete destruction of four branches, while a further 15 branches were looted and vandalised. Absa Bank was also hit by the crisis, with approximately 21 branches and more than 200 of its ATMs damaged or vandalised during the civil unrest.
Companies such as car manufacturer Toyota and paper recycling company Mpact reported that their operations were disrupted due to precautionary business closures in affected areas. Toyota was unable to ship vehicles destined for export due to the closure of the port. The car manufacturer was also unable to ship vehicles destined for other parts of the country due to road closures. Likewise, while there were no damages to Mpact’s assets as a result of the unrest, its KZN operations were closed for eight days, resulting in gross profit of about R20 million lost due to reduced production.
The Department of Health was forced to temporarily close vaccination sites that had been affected by the protests. Essential healthcare services, such as the distribution of chronic medication to diabetes, tuberculosis and HIV patients, were also disrupted by the violence.
Pharmaceutical group Clicks was directly affected by the civil unrest. Following damages to 52 of its stores nationwide, the Clicks Group had to close all 110 of its stores in KZN and 130 stores in Gauteng. This meant the retailer was temporarily unable to administer Covid-19 vaccines and provide medication to customers.
The unrest had also upset delivery of basic services, such as healthcare, education, waste removal, and the provision of water through water tankers in water-scarce areas. The Department of Health was forced to temporarily close vaccination sites that had been affected by the protests. Essential healthcare services, such as the distribution of chronic medication to diabetes, tuberculosis and HIV patients, were also disrupted by the violence. The eThekwini Metropolitan Municipality had to stop its bus services in the interest of protecting workers, commuters, and assets during the uprising.
Schools in both KZN and Gauteng were also forced to close, further affecting teaching and learning activities, which have already been severely disrupted by the Covid-19 pandemic and ensuing lockdown regulations implemented to curb the spread of the novel coronavirus.
In addition to the impact on business and infrastructure, the civil unrest posed a threat to human life, ultimately resulting in the tragic loss of lives. Official figures place the total number of casualties at 330. These include people killed during stampedes, incidences of police shooting at rioters, and flare-ups of racial tensions after the protests.
Government response to the unrest
While government leaders were initially caught unprepared, and widely criticised for their lethargy and lack of urgency in reacting to the crisis, they were eventually able to implement a multipronged response, bringing an end to the crisis. This included maintaining high police visibility in hotspot areas as well as engaging with affected businesses and communities with the aim of stabilising the situation on the ground. The deployment of a 25 000-strong army a few days after the start of the protests curtailed the spread of violence, preventing further destruction to property and life.
Further, the national government announced it would reprioritise funding for SMMEs affected by the pandemic through once-off cash transfers. The government also announced the reinstatement of the R350 social relief grant until March 2022, along with a R400 million contribution towards humanitarian relief and support for uninsured businesses.
The response by civil society highlights the importance of action at community level. As the civil unrest escalated, communities realised that they too had a role to play in protecting themselves and the most vulnerable among them.
The Gauteng provincial government established a fund with more than R500 million to help businesses affected by the looting and the Covid-19 pandemic to get back on their feet. Similarly, the KZN provincial government declared a State of Disaster, allowing it to unlock the R1.5 billion required to rebuild damaged infrastructure in the province. This followed wide- ranging consultations with various stakeholders, including representatives of major companies, labour unions and civil society. The recommendations made by all partners formed part of the provincial government’s comprehensive response to the protests.
A swift response from business
The business community was swift in responding to the crisis and in engaging with the government and affected communities. Most businesses immediately ensured the safety of their own staff, after which they mobilised to support the government and local communities with necessities and rebuilding.
Following threats to its operations, Toyota sent a letter to eThekwini Metropolitan Municipality requesting an action plan from the local government. In the letter, the company reiterated its commitment to the safety and wellbeing of its employees, their families and communities. The company also affirmed its commitment to a safe and harmonious operating environment that enables it to contribute to the communities and economies in which it operates. Toyota took a number of measures to demonstrate this commitment, including resuming operations at its Durban plant following engagements with the government. This is particularly important given that Toyota, with a workforce of 7 200 employees, is a key employer in the region.
In the immediate aftermath of the social unrest, the Shoprite Group requested its loss prevention, fleet management and in-store teams to assist with clean-up operations and facilitate the reopening of stores. The retail giant also donated R1 million to the Shoprite Act For Change Fund for use by civil society organisations involved in efforts to help communities rebuild. The fund was managed by the group, on behalf of its customers, with all donations directed to organisations working directly on relief efforts in the most vulnerable communities.
Absa announced relief measures for individual and business customers affected by the July riots. This included the reintroduction of a payment relief package as well as tailored credit relief solutions for its business customers as they attempted to rebuild and restore operations.
The social unrest took place in a context in which CSI programming had already adapted significantly in response to the Covid-19 pandemic. As such, it was imperative for CSI practitioners to think creatively about how to leverage corporate resources to respond to the crisis. Corporates responded to the uprising by providing staff and communities directly impacted by the protests with basic necessities such as food parcels, toiletries, and chronic medication. They also engaged their employees and clients to come up with solutions. By looking inward, among their employees and customers, corporates were able to rally more support for affected communities.
Bridging the gap: The response by civil society
The threat to food security and social welfare was an immediate concern, given that producers of essential goods had to shut down temporarily due to the non-movement of stock, disruptions to the supply chain network, and looting and vandalism at shopping malls and retail outlets.
Civil society organisations such as Doctors Without Borders, Humanitarian Development Alliance SA and Abahlali baseMjondolo immediately responded to this threat by mobilising donations of food parcels as well as providing shelter and medical assistance to those affected by the riots. Further, the Solidarity Fund provided the KZN provincial government with food relief parcels, which were aimed at supporting families living below the breadline.
Taxi drivers also played an important role in quelling the attacks and bringing normalcy back to communities. In addition to protecting infrastructure such as malls and schools from looters and vandals, they led residents in cleaning the Durban central business district that had been littered with waste following the protests and looting.
South Africans from all walks of life banded together to clean up and rebuild towns hit by the social unrest. This led to a number of civil society organisations developing plans to assist with the efforts. These organisations included ReBuild SA, started by a network of volunteers, NGOs, sponsors, and donors to provide physical, psychological, and financial support to those affected by the violence. The organisation coordinated clean-up and relief efforts in affected communities.
The response by civil society highlights the importance of action at community level. As the civil unrest escalated, communities realised that they too had a role to play in protecting themselves and the most vulnerable among them. By bridging the gap between the actions of government and business, civil society made an important contribution to ending the crisis and to the rebuilding efforts that followed.
An opportunity for deep learning and reflection
Times of crisis often present an opportunity for deep learning and reflection. The civil unrest experienced in July 2021 is no exception. The crisis magnified the glaring poverty and inequalities that continue to confront society, reminding South Africans that the collective health and wellbeing of society is dependent on the equitable distribution of resources, and on how society treats its most vulnerable members.
Leaders across the spectrum were compelled to demonstrate effective leadership in a time of crisis, and consider ways in which they can make a more meaningful contribution to South Africa’s broader development agenda going forward. Examples of effective leadership include Mitchell Slape, CEO of Massmart, who remained engaged with staff throughout the tense and difficult period by sending daily briefings to the company’s 45 000 employees. Slape also encouraged investors not to judge South Africa on one week of unrest, adding that all democracies go through periods of turbulence. He emphasised the importance of embracing diversity, saying that it is the one value that carried him and his company during the uprising.
Another example of effective leadership was that of Toshimitsu Imai, the CEO of Toyota Africa Region. Following the outbreak of the violence and looting in KZN, Imai proactively and openly engaged with both provincial and national government with the aim of securing stability in the region, preserving jobs, and ensuring the safety and wellbeing of employees and customers. The actions by the two leaders contributed to a coordinated response that prevented further loss of life and damage to the economy, and allowed for business operations to resume.
In addition to the responses of individual leaders, companies have been forced to consider the role the private sector should play in an increasingly restive, unequal society in which systemic change is long overdue. Strong partnerships based on trust and mutual respect will go a long way in this. An example of such partnerships is that between property developer Attacq and the communities surrounding its operations in the Waterfall City precinct in Johannesburg.
When the civil unrest spread to Johannesburg, Attacq was concerned that some of its properties, in particular the Mall of Africa, would be looted or vandalised. However, taxi drivers who operate in the area were quick to act and formed physical barriers to protect the mall and prevent damage. This is attributed to the relationship built between Attacq and its doorstep communities over the years. Through this relationship, the property developer provides social amenities such as free Wi-Fi, schools and health facilities to both taxi drivers and residents of its host communities.
Acknowledging the wounds of the past
The widespread economic destruction in the wake of the July 2021 civil unrest, combined with the once-in-a-century pandemic that is not yet over, has resulted in the realisation of the worst-case scenario for GDP growth prospects in South Africa. Data shows there is a strong correlation between economic growth and social stability, and that unless stakeholders across the board are serious about implementing reforms, rioting and looting could become more prevalent in the coming years.
This is affirmed in economic theory, which establishes a notion of “cycles of class struggle” characterised by long periods of growth, followed by acute social instability characterised by protests and unrest similar to the ones seen in South Africa in July 2021.
While South Africa cannot forget its painful past, leaders across the socioeconomic and political spectrum must do everything possible to build unity among all South Africans, and not allow those that thrive on division to succeed. For this to happen, the country’s unsustainable levels of poverty and inequality must be addressed. However, this can only happen through leadership that is focused on and committed to the wellbeing and prosperity of all South Africans.
In particular, business leaders need to play a more active role in ensuring meaningful and inclusive economic participation of historically disadvantaged individuals. Every business leader can be a powerful force for change. This will entail stepping up with innovative and sustainable solutions, rather than waiting on government to impose policies such as black economic empowerment or, worse still, waiting for a repeat of the civil unrest of July 2021.
Recommendations for business leaders and CSI practitioners
- Think out of the box when it comes to unlocking funding and support for crises
- Set up dedicated crisis management teams to address challenges as quickly as they arise
- Listen to what is most needed and redesign processes and programmes accordingly
- Collaborate with different stakeholders, both at grassroots and broader societal level
- Ensure business leaders and crisis management teams have access to trauma counselling
- Leverage networks to shift conversations and pool resources for wider impact
- Every business leader should be a force for change and play a role in the inclusive development of South Africa
