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Bloomberg recently reported on the consequences last week’s rioting and looting has had on the already weak South African economy. Over 3000 shops have been absolutely destroyed, with 200 banks and 150 post offices suffering a similar fate. More worryingly, an estimated 150 000 jobs are now at stake, with SAPO (South African Property Owners) noting that the total cost to the economy could be R50 billion, in lost output alone. A large investor in South Africa, Toyota has channelled plenty into the KwaZulu-Natal province. The recent civil unrest has thrown a spanner in the works of the global company’s plans, Toyota’s regional officer for Africa, Toshimitsu Imai, expressing his concerns. According to MyBroadband, Imai noted that the safety of Toyota employees are a “key priority” for Toyota. However, he also said that it “left Toyota feeling very uncertain about the future of its business in KwaZulu-Natal”. eThekwini Municipality mayor, Mxolisi Kaunda, will be meeting with Toyota in order to give the company assurance that the unrest has been stabilised. Below the article, is a statement from The Presidency noting that government’s first priority is to “restore and maintain stability,” also stating the importance of helping businesses in the aftermath of the civil unrest that gripped SA. This article was first published on MyBroadband. – Jarryd Neves
Toyota meeting mayor after it threatens to leave Durban
By Jan Vermeulen
The mayor of eThekwini Municipality, Mxolisi Kaunda, will be visiting Toyota tomorrow morning, 21 July 2021, his spokesperson has told MyBroadband.
“[Our mayor will] give them assurance that the situation has stabilized and law enforcement is being deployed in all hotspot areas including industries affected,” he said.
This comes after Toyota’s regional officer for Africa, Toshimitsu Imai, wrote to Kaunda to express their concern about the violence and looting in KwaZulu-Natal.
Imai said a key priority for Toyota is the safety and welfare of their employees, their families, and the communities within which they operate.
“The safety and harmony within this ecosystem is a fundamental value we strive for because it enables us to be a successful business and thereby contribute to the communities and economies within which we can operate.
Unfortunately, he said, the incidents in the city have “left Toyota feeling very uncertain about the future of its business in KwaZulu-Natal”.
“Our manufacturing operations in the south of Durban were forced to close and have remained closed since Monday, 12 July 2021. We are uncertain as to when it will be safe enough for us to resume operations.”
The uncertainty caused by the unrest in KwaZulu-Natal means key deadlines may be missed. This, in turn, will hurt future prospects of Toyota’s local operations.
The closure of Toyota South Africa’s manufacturing operations jeopardises the company’s future sustainability, as it embarked on a recovery mission following the Covid-19 pandemic.
Even a temporary closure of its Durban plant and the Durban harbour negatively impacted Toyota’s ability to fulfil its export mandate. Other areas had to satisfy the demand.
Disruption of the important N3 highway between Durban and Johannesburg also meant that Toyota South Africa is unable to deliver vehicles to customers in Gauteng.
Imai said the recent spate of riots have a significant impact on its plans to further invest in South Africa, especially when it comes to its alternative energy cars.
Toyota South Africa highlighted that it is busy with preparations to launch its first locally produced “new energy vehicle” later this year.
In January, Toyota South Africa Motors announced it would be manufacturing the new Corolla Cross in South Africa in the fourth quarter of the year.
The model reveal followed the company’s announcement in 2019 that it was investing R2.43 billion in the production of a new passenger vehicle in South Africa.
“We will be manufacturing the Corolla Cross in both right- and left-hand drive for South Africa and the rest of Africa right here at the Prospecton Plant in Durban,” Toyota South Africa Motors CEO Andrew Kirby said at the time.
It was also the first time that Toyota would be manufacturing a hybrid model, which Kirby believed would fast become a very popular choice.
“It is also the first time for us to manufacture using the Toyota New Global Architecture — which allows us to keep up with global technology and trends,” said Toyota South Africa Motors executive vice president, Nigel Ward.
The Presidency also announced earlier today that President Cyril Ramaphosa will meet with more than 90 CEOs and business leaders of key industries that have been impacted by last week’s civil unrest.
“The meeting will discuss steps being taken by government and business to recover and rebuild from the damage caused by last week’s events,” the Presidency stated.
“The Premiers of Gauteng and KwaZulu-Natal as well as Ministers of Agriculture, Land Reform and Rural Development; Public Enterprises; Tourism; Justice and Correctional Services; Mineral Resources and Energy; Finance; Small Business Development; Communications and Digital Technologies; Trade, Industry and Development; and the MEC of Economic Development in Gauteng and the MEC of Economic Development in KwaZulu-Natal will also be in attendance.”
From The Presidency:
Welcome to this engagement on the current security situation in the country, which has severe humanitarian, economic and social consequences.
The purpose of this meeting is to share information on the challenges faced by key sectors of the economy, to identify priorities and tasks, and to agree on measures that we need to take together to rebuild and reposition SA.
We fully understand that the events of the last 10 days have been devastating for the economy, for individual businesses, for livelihoods and for the security of citizens.
This comes at a time when the economy was beginning to recover from the largest contraction in many decades and unemployment has reached its highest level ever. We are still in the midst of the Covid-19 pandemic, which is taking a great toll on health, well-being and lives.
There is virtually no part of the economy that has not been affected by the violence, and there is probably no part of the country that will not feel the effects in some form or another because of the way our supply chains work.
We cannot understate the impact on the country of the disruption, destruction and looting that took place last week.
Together, KwaZulu-Natal and Gauteng account for 50 per cent of GDP, and are home to 45 percent of all South Africans.
As indicated in my address to the nation last Friday, the evidence that we have indicates that the events last week were part of a deliberate, coordinated and well-planned attack on our democracy, the rule of law and our constitution.
The actions were intended to cripple the economy, cause social instability and severely weaken – or even dislodge – the democratic state.
Those behind the acts sought to exploit the social and economic conditions of millions of South Africans to provoke ordinary citizens and activate criminal networks to engage in opportunistic acts of looting.
While there was planning and coordination, local conditions, tensions and conflicts have also contributed to the nature of local activities.
The ensuing chaos was used as a smokescreen to carry out economic sabotage through targeted attacks on trucks, factories, warehouses and other infrastructure necessary for the functioning of our economy and the provision of services to our people.
It is important to correctly characterise these events so that the measures we take are effective in preventing a resurgence of violence and destruction – and so that we address the root causes, not only the symptoms.
Despite the efforts of these instigators, business people, worker representatives and community leaders have played a remarkable role to defend property, to protect communities, to open supply chains among other supportive steps. Taxi owners have defended malls. Businesses have provided food and fuel to their workers. Today supermarkets are feeding our security forces. Some of you have supplied cars to our forces.
We appreciate these contributions to the national effort.
As a government, we have acknowledged that we were not sufficiently prepared for violence, destruction and looting on this scale, and that the response of our security forces should have been quicker. However, we must commend those personnel that were on the ground for doing what they could under difficult and dangerous circumstances.
We need to acknowledge the impact of state capture and that he hollowing out of institutions had a direct impact on the capabilities of the state. We have made important progress in take corrective measures, but there is much more work to be done.
Our first priority is to restore and maintain stability.
We have significantly increased the presence and visibility of security forces on the ground in KwaZulu-Natal and Gauteng. The bulk of the 25,000 SANDF personnel have been deployed in support of the police and other law enforcement agencies.
The security forces have been deployed to areas in the provinces regarded as potential hotspots, key economic and government installations, shopping centres, warehouses and factories.
Security forces also have responsibility for keeping critical supply routes open, particularly the N3, and safeguarding the transport of goods.
In all this work, coordination and cooperation with the private sector is essential. Information sharing and constant communication about potential threats is necessary for an appropriate and effective response.
The work of the security cluster is being supported by enhanced intelligence gathering and analysis from the ground.
Specialised law enforcement units continue investigations into those responsible for instigating this violence with a few to speedy arrest and effective prosecution.
Special measures are being put in place to manage the large number of suspects who have been arrested for unrest-related offences.
The SAPS has activated the Community Policing Strategy in areas throughout the country, which has contributed to the decline in incidents and has made communities far more prominent in preventing incidents.
While the actions of the law enforcement and security services are an important part of restoring order, stability also depends on engagements at various levels with communities and key stakeholders like political, religious and traditional leaders.
That is why government leaders in all spheres have been engaging with various constituencies over the last two weeks to promote dialogue and cooperation.
Our second priority is to secure essential supplies.
We need to take every available step to ensure the return our ports and rail lines to full operation, restore manufacturing capacity of vital goods as quickly as possible and put in place contingency measures where facilities have been badly damaged or stocks looted or destroyed.
We need to ensure that cash can be securely transported and is available in sufficient quantities to consumers and businesses throughout the two provinces. This is particularly important for the survival of informal business.
We need to ensure that medicines are available, health facilities are functioning, and the COVID testing and vaccination sites are fully operational.
Much has been done in this regard as a result of close cooperation between government and the retail, pharmaceutical, agricultural, and other sectors. I want to extend my appreciation to all those among you that have contributed to this effort.
I also want to thank the Ministers who have engaged extensively in the last week on concrete steps that can be taken to protect livelihoods and rebuild the economy.
Our third priority is to provide relief and start rebuilding.
We are in the process of providing immediate food relief to households. We are targeting areas affected by the looting and where people have no access to food.
Provincial Departments of Social Development and SASSA are providing support in the form of food parcels, cash and food vouchers.
The Solidarity Fund has established a Humanitarian Crisis Relief Fund to assist those in greatest need. Many companies, organisations and faith-based groups that have already started providing support to families in distress.
Government has been working with social partners to finalise an extensive social and economic relief package that will support poor households and provide assistance to affected businesses and employees.
Among other things, these measures aim to:
- respond to the immediate needs of poor households affected by both the pandemic and the recent violence;
- help businesses to rebuild in the aftermath of looting and destruction of property;
- support sectors that are affected by restrictions on economic activity; and,
- contribute to the longer-term goal of increasing growth, boosting employment and eradicating poverty.
This package will include both the extension and repurposing of some of the COVID19 relief measures and specific relief for sectors affected by the violence like retail and property.
These measures should support the work underway to re-open stores, find alternative retail sites and rehabilitate shopping centres and malls.
It is important that, both as government and the private sector, we prioritise measures for township businesses, small businesses and the informal economy. These are among the hardest hit and the most vulnerable, and play a significant role in sustaining livelihoods and employment in poor communities.
We intend to announce the details of the package within the next few days.
Our fourth priority is to accelerate inclusive economic recovery.
In October last year, we launched the Economic Reconstruction and Recovery Plan to drive the growth of our economy in the wake of the devastation caused by the COVID-19 pandemic.
Over the past months, we have made progress in kick-starting some of the key structural reforms identified in Operation Vulindlela. This underscores our commitment to create the conditions for growth and job creation.
The violence and destruction of the last two weeks has provided the starkest reminder of what is at stake. It has exposed several of the social and economic faultlines in our society and underlined the urgent need to decisively address poverty, inequality and unemployment.
Now, more than ever, we need united action across the economy and society to drive investment and inclusive growth. More than that, we need to ensure that our recovery plan accelerates the restructuring and transformation of our economy in a way that creates opportunities for the millions of unemployed South Africans.
We need to work jointly – as government, business and labour – to reassure investors and to continue to promote the diverse investment opportunities that exist in our country. To this end, we should consider undertaking joint ‘roadshows’ to engage with investors in key centres to convey a common message.
Although it has its seeds in discord, this crisis has created a renewed unity of purpose among South Africans. It has generated goodwill and encouraged social solidarity. It has created a sense of urgency.
Let us seize this moment, not only to restore the damage of the last two weeks, but to push ahead with fundamental social and economic transformation.
Let us mobilise all national resources and capabilities – in both the public and private sectors – to develop our country, build an inclusive economy, and foster social cohesion.
The actions we take now must make a visible impact on the lives and living conditions of the majority of South Africans.
Key to the success of all these endeavours is close collaboration between government and business. It is important that the needs of business are understood, that interventions are appropriate and sufficient, and that there is a common, agreed programme of rebuilding.
We therefore welcome this opportunity to engage with a broad range of affected sectors so that we may appreciate your specific challenges, and so that we may work together to address them.
As with our response to the pandemic, it should not be our intention to merely return to where we were before this crisis.
A partnership, with a shared national purpose and goal, among all role players is critical now and in the years ahead. It requires bold and enlightened leadership in all sectors of society
We must build a special social contract among all of us to respond to the crisis, and rebuild an economy that is far more resilient, sustainable, dynamic and inclusive.
I thank you.
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