South Africa’s largest companies were among those forced to halt operations as some of the worst protests since the end of white minority rule erupted across parts of the country, with rioters torching trucks and looting stores.
The nation’s biggest four lenders led by Standard Bank Group Ltd. and FirstRand Ltd. all closed branches in KwaZulu-Natal, the province at the heart of the violent unrest, and the economic hub of Gauteng, the companies said in emailed responses to questions Monday. Walmart Inc.-owned Massmart Holdings Ltd. and mobile-phone giants Vodacom Group Ltd. and MTN Group Ltd. were among others to shutter outlets, while the latter is running its main call center at minimal capacity.
Dis-Chem Pharmacies Ltd. closed all its drugstores in KwaZulu-Natal, hampering South Africa’s Covid-19 testing and vaccine rollout, according to text messages sent to customers. Smaller shops across downtown Johannesburg closed as looters roamed the streets, while the affluent Rosebank Mall near the city’s financial hub of Sandton shut early as a precaution.
Business leaders are calling on authorities to quell the violence that has escalated since the arrest of former President Jacob Zuma last week, with the army being deployed to help police. The looting and destruction have emptied the shelves of grocers and closed major roads in the country, including the N3 highway between the port city of Durban and Johannesburg. At least six people have died to date, according to police.
“We are doing all we can to ensure that the disruptions are minimized,” Trudi Makhaya, an economic adviser to President Cyril Ramaphosa, said in webinar organized by the World Bank. “Of course, that begins with arresting criminals, intervening in those hotspots where we’re seeing challenges.”
The impact of the riots has delivered a further blow to industries already contending with lockdown restrictions in South Africa to curb the spread of Covid-19 infections, which were toughened late last month to combat a third wave and extended on Sunday. It’s also hampering efforts to revive an economy that suffered its largest contraction in a century last year.
Alcohol industry bodies said liquor stores are being particularly targeted by rioters, given all sales have been banned for more than two weeks as one of the latest measures to contain the pandemic.
“Many of our members, who are already experiencing crippling damage to cash flow as a result of the ban, have lost their entire stores’ stock running into hundreds of millions of rands,” said Sean Robinson, Chairman of the Liquor Traders Association of South Africa. “It’s deeply troubling, and the extended ban only increases the risk of this criminal behaviour.”
South African stocks pared losses as investors kept a close eye on the protests, while the extension of the current hard level of lockdown weighed on sentiment. The FTSE/JSE Africa All Share Index was up 1.4% by the close in Johannesburg, though the FTSE/JSE Retailers Index fell 1.1%.
“There is definitely a more somber mood on the JSE today,” said Michele Santangelo of Independent Securities in Johannesburg. “South Africa-centric shares are mostly under pressure today as is the rand. Investors are likely not overly concerned given the recent events but they are certainly not overly optimistic either,” he said.
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