Absa has published a list of factors which are likely to swing South Africa’s economy in either a negative or positive direction in the coming months.
One of the key concerns raised by the group is the possibility of social unrest, with the July 2021 riots in KwaZulu-Natal and parts of Gauteng not only causing billions of rands in damage but also causing significant damage to future investment in the country.
In the bank’s upside scenario, rising socio-economic opportunities and greater political responsiveness diminish the risks of social unrest, particularly as the organisers of the July 2021 riots are brought to account. The South African Special Risk Insurance Association has already warned that it cannot afford to cover the country’s businesses should it see a repeat of the July 2021 riots in the coming years.
Sasria added that major retail groups such as Shoprite, Pick n Pay, and the Foschini Group could pull disinvest from the South African economy if this cover is not provided. Sasria is currently restricting all of its clients – including these major retailers – to a maximum cover of R500 million, which is ‘clearly not adequate’.
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