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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
Increasing risk
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.
Decreasing risk
Increased and formalized co-operation by community members with
security forces would help to deter protesters from blocking roads
and looting commercial properties.
