It’s been South Africa’s turn this week to expose the frail economic conditions in Africa’s two largest economies.
Hiding behind protests against ex-leader Jacob Zuma’s arrest, hoodlums looted and vandalized private properties in Zuma’s home province of KwaZulu-Natal (KZN) and Guateng where the biggest city, Johannesburg, is.
Live video footage revealed looters brazenly walking past TV cameras carrying armfuls of stolen goods at a popular mall in Soweto, the Jabulani Mall, this week.
Mams Mall in Mamelodi was gutted Tuesday night and shops there were fully looted. More than 200 shopping malls had been looted by Tuesday and retailers had lost an estimated 2 billion rand, according to Busisiwe Mavuso, the chief executive officer of Business Leadership South Africa, which represents many of the country’s biggest companies.
“The disquiet about Zuma’s arrest is being used as an excuse for sheer, opportunistic looting,” Mavuso said.
Liquor stores were among those affected as were shops of companies like pharmacy group Clicks and food retailers Pick n Pay and Shoprite.
Only last year protests against police brutality in Nigeria were also hijacked by looters and arsonists who took the opportunity to steal from private stores as well as vandalise public property.
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People could be seen carting away various items from Television sets to food items during the widespread looting of private stores in Nigeria.
Months later, many of the affected private stores are yet to recover.
The stores at Circle Mall, Lekki, in the country’s commercial capital of Lagos, among which include Shoprite; retail pharmacy chain, Health Plus and children clothing store, RuffnTumble, remain shut after being attacked by the looters.
At the heart of the crisis in South Africa these past few days and Nigeria last year is a rotten economy that is bleeding jobs and has led to discontent among the people.
Africa’s most industrialized economy contracted the most in a century last year and lost 1.4 million jobs as restrictions to curb the spread of the virus weighed on output and forced some businesses to cut wages, reduce staff or permanently shut down.
In Nigeria, the economy contracted by the most since 1984 last year. The World Bank predicts an additional 7 million will be rendered poor this year in the world’s latest poverty capital, where 87 million people already live below $1.90 a day.
Nigeria and South Africa are also on the list of the top five countries with the highest unemployment rate globally with Nigeria in second and SA a close third. While 33 percent of Nigeria’s labour force were unemployed as at the end of 2020, 32.6 percent of South Africa’s labour force were unemployed.
Nigeria is however battling higher inflation than South Africa. At 17.9 percent, Nigeria’s inflation rate is over 3 times the 5.2 percent inflation rate in SA.
The economic hardship in both countries has been exacerbated by the COVID-19 pandemic and a third wave of infections is now threatening to slow the pace of any recovery.
The World Bank in its South Africa Economic Update argues that the reasons for low growth and high unemployment in the country do not lie in the government’s crisis response. Instead, the pandemic has exposed long-standing structural weaknesses that have progressively worsened since the global financial crisis of 2008–09.
Same applies to Nigeria which has been stuck in what Moody’s Investor’s Service calls a low-growth cycle since 2015 following the collapse in oil prices.
Economists recommend far-reaching economic reforms as a possible solution to the challenges both countries face.
The two economies would benefit from measures to preserve macroeconomic stability, revitalize the jobs market by improving the investment climate to build a better and more inclusive economy after the pandemic.
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