South Africa Unrest: State Grants – by Themselves – are not sustainable without a growing economy

It is important however to note that grants are not sustainable without a growing economy Dr Eddie Mahembe South Africa (SA) was recently in the international news for bad reasons. The first was the 3rd wave of the COVID-19 pandemic which has infected a total of 2.47 million and caused the death of more than 70 000 people. The second was the so called ‘South Africa Unrest’, which started on the evening of 9 July in KwaZulu-Natal (KZN) and spread to the province of Gauteng on the evening of 11 July 2021. The unrest, characterized by violence and looting, led to the destruction of key infrastructure, closure of businesses and death of more than 300 people. To fully comprehend the magnitude and possible impact of the unrest to the South African and regional economies, one has to appreciate the following facts. Firstly, KZN and Gauteng contribute around half of the country’s gross domestic product (GDP). Secondly, the port of Durban in KZN is a strategic trade gateway to most southern African countries and handles around 70% of SA’s imports. Thirdly, the riots disrupted supply chains, industrial output, and the demand for manufactured goods.