Possible food price hikes following a week of riots in KZN, Gauteng

A possible hike in food prices was on the cards following the looting and setting alight of shops in parts of KwaZulu-Natal and Gauteng, including Pretoria.

While most parts of Pretoria remained calm last week, Mamelodi suffered sporadic incidents of looting which led to 130 people being arrested. Several shopping centres closed down as many retail centres were gripped by fear of copycat attacks.

Economist Dr Azar Jammine said the effect of the closure of harbours last week, and the N3 highway that facilitates the transportation of goods between Durban and Gauteng could likely result in food supply shortages and prices going up.

“What you can see is shortages of food developing which could cause the prices of food to rise more rapidly and become less affordable in the affected provinces.”

Jammine said the provinces could also see shortages in healthcare products and medication and there could be a damaging effect on investor confidence after the riots.

“There was huge damage on businesses. It is estimated that 50 000 businesses were affected. Most of the black-owned businesses were wiped out by this. Bear in mind that they employed people. Now the unemployment rate will rise and poverty rate will rise.”

Jammine said the long-term effects of the riots on the economy would depend on political stability.

Pretoria-based economist Dawie Roodt concurred that for a few weeks to a month, the province might see a hike in food prices but expected that to subside by October.

“There will be a direct impact on unemployment and poverty rate. Long-term economic growth will be suppressed because of people losing confidence in the country. Many businesses may also not reopen,” he said.

“In the long term, the brand South Africa will be affected. The image of SA to investors will be affected, not just KZN.”