The economic impact of Economic Freedom Fighters’ (EFF) national shutdown will possibly be visible in the next few months, with Everest Wealth saying it was positive that there was pro-active action to counter the protest.
The group said though there was no immediate economic impact of the shutdown and the Rand traded steadily on Monday while it was another good day on the Johannesburg Stocks Exchange (JSE), the impact could however be visible in the next few months.
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Everest Wealth financial advisor Riaan Grobler warned that the consumer will ultimately pay for the disruptions and interventions as a result of the national shutdown.
He said the deployment of the SA National Defence Force (SANDF) affected the taxpayer’s pocket and puts pressure on the state coffers, with companies’ increased spending on private security will also have to be factored in somewhere where the consumer will feel it and that less profits meant less dividends
Grobler hailed pro-active action by the government, the private sector and civil society to try to maintain law and order and that the EFF shutdown ultimately did not lead to large-scale disruption, incidents of public violence or looting.
“South Africa’s economy cannot afford a repeat of the riots of July 2021, with the impact still being felt. The major impact of protests and strikes is usually only felt a few months later with the general consumer who ultimately has to bear the brunt of it,” he said.
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Major businesses, Grobler said, had contingency plans in place, including increased private security, in anticipation of possible disruption during Monday’s national shutdown.
He said several businesses decided to close their doors for the day instead for fear of looting, meaning there were people who could not go to work.
Grobler believes that ordinary people are also getting fed up with the disruption that comes with protests and strikes.
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He said fear of what might have happened during the national shutdown resulted in many people not continuing with their day as usual; with some opting to stay away from the roads for fear that their vehicles could be damaged.
Loss in productivity
“Others may have preferred to stay at home to avoid possible public violence. The country cannot afford to lose a single day of productivity. Businesses that had to close and people who didn’t go to work have an economic impact that will ultimately affect the consumer again, with for example low or no increases, let alone a bonus,” Grobler said.
He said protests and strikes may also increase in the run-up to next year’s election and that this did not bode well for the economy as it may result in unemployment rising further, interest rates rising, the Rand weakening and the raising of taxes due to a loss of income for the state.
Much ado about nothing
The Democratic Alliance has dismissed the shutdown as “much ado about nothing”, saying the court interdict stopped violation of South Africans’ rights by means of intimidation, violence or coercion.
Spokesperson Solly Malatsi on Tuesday said the DA’s two interdicts against the threats of violence – one by the City of Cape Town and the other by the DA – prevented the EFF from illegal behaviour on Monday yesterday.
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“They knew that the consequences would be too severe to bear,” he said.
Malatsi said the Gauteng High Court, on the DA’s request, on Saturday interdicted the EFF from violating the rights of South Africans to work, go to school, and trade.
“We believe that this interdict was instrumental in strengthening the arm of South Africa’s law enforcement bodies and security services to uphold the law on a “national shutdown”,” he said in a statement.
EFF’s bark bigger than its bite
He said the EFF’s bark was always bigger than its bite, saying they have seen far too many times in the past how the party claimed to have national influence when they did not.
According to Malatsi, the only way to get rid of almost 30 years of ANC mismanagement was not through threats of a shutdown or any form of intimidation or violence but by voting it out of power.
“The only way is by voting for a party that can really bring an end to three decades of ANC-rule that has robbed the country and its people and is directly responsible for the misery of millions of South Africans,” he said.
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On Monday evening the EFF expressed gratitude to people who heeded the call for the national shutdown, saying the protest was not only successful but was not marked by a single incident of violence despite the massive fear-mongering by the State.
EFF claims victory
The party said in a statement that from midnight, the clarion call was answered and that the masses, particularly the youth, headed to the streets.
The EFF charged that the most damage was actually done by ‘trigger happy’ police and the state itself, which the party said needlessly spent R166 562 058 on a month long deployment of the army.
According to the EFF, another testament to the success of the national shutdown was that state power utility Eskom was able to suspend load shedding due to lower than anticipated demand for electricity.
The party said this was simply because no major industry operated and a majority of businesses heeded the call to close in anticipation of the shutdown.
Buses and taxis did not operate in their majority, as the malls, shopping centres and taxi ranks were empty, the EFF said, and that trucks which usually transported the minerals to the harbours were on a standstill and a number of fuel stations were not operational.
The EFF vowed that the national shutdown was only the beginning and called on supporters to intensify the calls for Ramaphosa’s resignation on the picket lines, in the business sector and in governance.
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