Chris Hattingh, head of Policy Analysis, Centre for Risk Analysis (CRA) gave a presentation at the GCCA Africa Risk & Insurance seminar in Johannesburg earlier this year. The following article is derived from his presentation, edited by Eamonn Ryan.

I would like to discuss the topic of risk management in South Africa and shed light on some of the key economic and social indicators that pose potential risks to the cold chain and the broader economy over the next three to five years.
The global supply chain disruptions experienced during the Covid-19 pandemic highlight the need for resilient supply chains. South Africa’s potential role in implementing the Africa Continental Free Trade Area offers an opportunity to build more robust supply chains within sub-Saharan Africa. However, the successful implementation of such initiatives depends on the political will and focus of the government.
South Africa finds itself at a critical juncture, where the African National Congress (ANC) remains the most influential political party in the country. However, it faces the delicate task of balancing forces of reform and pragmatism while striving to maintain control accumulated over years of legislation.
A survey conducted in September 2022 revealed that a majority of respondents believe their quality of life has declined over the past five years. While this sentiment does not justify violent protests or civil unrest, it may reflect a growing dissatisfaction with the political system’s ability to address their needs. This discontent could persist, leading to social unrest and various associated risks in the foreseeable future.
The value of large investment projects in South Africa’s economy slumped by more than a third in 2022, reflecting the devastating effect blackouts — as well as the deterioration in global growth prospects — have had on business confidence. Nedbank research shows that the value of new projects announced during the year fell to R248.5 billion from R392.7 billion the year before.
Despite the challenges faced by the government, there are opportunities for the private sector to step in and contribute to the country’s development. Investment as a proportion of GDP has steadily declined over the years, and government investment in infrastructure has also decreased due to fiscal constraints. This creates a gap for the private sector to take the lead in implementing smaller-scale infrastructure projects.
Examining trade patterns, South Africa’s exports and imports show significant reliance on Eastern Asia and the European Union (EU). While China’s reopening presents potential export opportunities, concerns about the Chinese Communist Party’s policy trends and the impact of the conflict in Ukraine on European economic activity raise uncertainties. Businesses must closely monitor these developments and Examining trade patterns, South Africa’s exports and imports show significant reliance on Eastern Asia and the EU. While China’s reopening presents potential export opportunities, concerns about the Chinese Communist Party’s policy trends and the impact of the conflict in Ukraine on European economic activity raise uncertainties. Businesses must closely monitor these developments and diversify their trade relationships to mitigate risks associated with overdependence on specific regions.
South Africa’s persistent loadshedding, resulting from theft and vandalism of power infrastructure, poses a significant risk to businesses. The Reserve Bank estimates that the country loses approximately R899 million/day due to loadshedding. To manage this risk, businesses need to account for the potential disruptions and consider diversifying infrastructure locations to minimise the impact. However, finding a balance between economic activity and alternative locations can be challenging.

The trade relationship between South Africa and regions like Eastern Asia and the EU plays a vital role in the country’s economic prospects. Recent developments, such as China reopening its economy and the war in Ukraine, raise concerns about potential impacts on trade and export opportunities. To navigate these uncertainties, businesses must closely monitor geopolitical trends, adapt their strategies, and explore alternative markets such as Latin America for potential economic growth.
While South Africa has benefited from commodity booms in recent years, the inefficiencies in ports and railways hinder operations, job creation and investment. These vulnerabilities can hamper economic growth and limit the government’s ability to fund essential services. Businesses should proactively engage with communities, integrate with local businesses, and build anti-fragile operations to withstand disruptions, ensuring continuity even in challenging circumstances.
Consumer confidence in South Africa has experienced fluctuations due to the impact of Covid-19 and associated lockdowns. However, there is a rebound in consumer spending on short-term consumer goods. Businesses can capitalise on this trend by streamlining operations, digitising processes, and making it easier for consumers to engage and transact.
Moreover, rising inflation rates and central banks hiking interest rates can further dampen consumer activity, requiring businesses to adopt cost-effective measures and manage credit constraints.
Public trust in the police has declined in South Africa, leading to increased reliance on private sector security. However, disruptions caused by union actions can impact security measures, leaving businesses vulnerable to theft and equipment damage. To address these concerns, businesses should assess the effectiveness of their security arrangements, foster relationships with private security providers, and establish contingency plans to safeguard assets.
Seize the day:
- Fill gaps left by the state
- Diversify avenues
- Use smart ports & AI
- Friendshoring
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