The recent wave of xenophobic attacks in Africa’s second largest economy may be over, but the consequences will likely linger on for quite some time. Our analysis of the current state of affairs suggest that these effects will coalesce around four major areas.
Export Losses: With multiple calls for an embargo on South African products, the threat of export losses is becoming more substantiated. “Since the start of the attacks, our country has lost billions of rands in export foreign revenue. The government is worried about the cost and the negative impact of the attacks on foreign nationals on the country’s image and its economy,” remarked Mzwandile Masina, South African Trade and Industry Deputy Minister.
Diplomatic Strains: Rumours recently emerged about Nigeria recalling its envoys to South Africa. This, though, might have been the result of a misinterpretation after it was realised that Nigeria only “summoned for consultation” its South African diplomats. But the implications make for great concerns as countries like Mozambique and Zimbabwe, the worst hit countries by the attacks, could thread this path in the coming weeks.
Reprisal Attacks: There are growing concerns that reprisal attacks could escalate as tensions in neighbouring countries are yet to be fully resolved. Already petrochemicals group Sasol has sent home 340 South African staff working in Mozambique, while Irish mining firm Kenmare Resources did same for 62 workers. Calls are also rising for locals in Zimbabwe to boycott South African brands like. Should these threats materialize, these brands – which have most of operations confined to the continent – will struggle to maintain a solid balance sheet in the near future.
Public Relations Dent: South Africa is again in the news for the wrong reason and the tremors from this will be felt beyond the continent. Tourism, a key source of revenue in South Africa, might be affected. Several foreign ministries have already updated their travel advisories to highlight the turbulence.
South Africa’s economic growth slumped from 2.2 percent in 2013 to 1.5 percent last year, but these attacks will do little to improve the economic positioning of the country.
By Emmanuel Iruobe