What is at stake for the South African economy if law and order is not restored soon, was starkly confirmed by President Cyril Ramaphosa in his address on 12 July.

Prof Raymond Parsons, economist from the Business School of the North-West University (NWU), says the current cycle of violence has posed a risk to the present economic recovery, undermined the vaccination programme, destroyed infrastructure and caused job losses.

Commenting on the steps outlined by President Cyril Ramaphosa to restore law and order, Prof Parsons points out that even as the president spoke, widespread economic damage and destruction continued in several areas and many businesses had already been permanently destroyed by wanton criminality.

“The crucial test now will be to ensure that the prevailing lawlessness, looting and other forms of public violence are seen to be effectively reduced as soon as possible in order to restore business and investor confidence.”

He says the extent of the eventual overall impact of these events on South Africa’s economic performance will now depend on whether security forces and others will do enough quickly enough to contain and reverse the situation to bring peace and calm back to the country.

“The longer it takes to restore calm, the more the economic and human costs of the present instability in South Africa will rise. This is inevitable. The economy is already grappling with a Level 4 lockdown. The latest cycle of violence must be contained sooner rather than later to avoid further economic jeopardy.”

According to Prof Parsons, it is imperative that all key stakeholders, together with strengthened security forces, pledge their cooperation and demonstrate the necessary leadership to help recreate the stability that the economy and society now urgently need.