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South African protests for Zuma
On 14 July, President Cyril Ramaphosa deployed a further 25 000 soldiers to help police, whose resources are stretched, to suppress ongoing looting. This comes after violent protests calling for the release of former president Jacob Zuma from prison began on 9 July in several parts of KwaZulu-Natal province. Protesters, who had initially blocked two key national roads, the N3 and the N2, which lead out of Durban and Richards Bay ports, began looting large retail stores in the Durban and Johannesburg inner cities, as well as in surrounding low-income neighborhoods. Zuma was arrested on 7 July after the Constitutional Court handed down on 29 June an order for his imprisonment for refusing to appear before the Commission of Inquiry into Allegations of State Capture.
Twenty-five thousand more soldiers are to be deployed to restore order in KwaZulu-Natal and Gauteng, and protect strategic economic infrastructure, decreasing the likelihood of a state of emergency.
Soldiers will probably seek to protect the strategic economic infrastructure. On 13 July, the Independent Communications Authority of South Africa reported that 113 telecommunication network towers and base stations had been attacked during protests. The deployment is partly in response to media reports stating that the State Security Agency (SSA) and the ruling party are investigating allegations that middle and senior members of both organizations, who were supporters of the former president Jacob Zuma, were key in orchestrating the violent unrest in KwaZulu-Natal and Gauteng. Members of community police forums, as well as minibus taxi associations, particularly in suburban areas, have also protected shopping centers and retailers in business districts in aid of the bolstered security services. This will partly lower risks to cargo as the army presence will most probably deter protesters from acts of violence and arson. It also decreases the likelihood of the enactment of a state of emergency by the president. If a state of emergency were introduced, it would place severe restrictions on the movements of citizens and be likely to continue to negatively affect retail stores.
Disruption to the coronavirus disease 2019 (COVID-19)-virus vaccine rollout due to acts of arson by protesters at vaccination sites increases the likelihood of a stricter lockdown and the postponement of local elections.
The COVID-19-virus vaccine drives in Gauteng and KwaZulu-Natal were brought to a halt on 12 July as centers were advised to close their doors because of violent protests in the two provinces. Gauteng has been the epicenter of COVID-19, recording an average of 65% of South Africa's cases. KwaZulu-Natal was identified on 8 July as one of the provinces with the fastest growing number of cases. Twenty pharmacies in KwaZulu-Natal were looted and damaged by protesters, while several others were burnt down. The disruption to the vaccine rollout comes as the programs were due to be accelerated after initial setbacks. The disruption is also likely to result in a third extension of the current hard lockdown measures, by another 14 days; they were scheduled to end on 24 July. This also increases the probability of the postponement of the local elections scheduled for 27 October 2021 to December or the following year. Should elections not take place by the beginning of November, according to the constitution, municipal councils will no longer have the legal authority to function, increasing the likelihood of further protests against lack of services, particularly in lower income communities.
Prolonged fuel shortages and disruption in the retail sector are likely to cause South Africa to fall short of its economic growth target for 2021.
This elevates the risk that the country will be unable to meet its debt-servicing costs over the medium term. South Africa's debt-to-GDP ratio is currently at 78% and during the February budget, the finance minister said that the government was aiming for the debt-to-GDP ratio to peak at 88.9% in 2025/26. There is a low likelihood that in the Medium-Term Budget Policy Statement (MTBPS), which is due in October, the government will revise this target and respond to current social pressures by conceding to higher public-sector wage demands and expansion of social grants. If this happens, it is likely to result in a further downgrade by rating agency Moody's for South Africa, which currently sits two levels into sub-investment grade, at Ba2, with a Negative outlook.
Indicators of changing risk environment
- The Constitutional Court turns down Zuma's application for a suspension of the imprisonment order against him, likely increasing the scale of protests despite the deployment of soldiers.
- Increased and formalized co-operation by community members with security forces would help to deter protesters from blocking roads and looting commercial properties.
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