By Nicolaas van Wyk and Ciaran Ryan
The scenes of rioting in Gauteng and Kwazulu-Natal were shocking, and have set back our recovery from the Covid lockdowns by several months.
The role of government and law enforcement is to bring those responsible to book, and to restore the rule of law.
At the time of writing, there were welcome signs that the looting had started to subside, and businesses were starting to assess the damage.
The Consumer Goods Council of SA (CGCSA) puts the number of looted stores at 800, 100 of which were burnt to the ground. Retail warehouses were also gutted. The Council also warns of looming food and fuel shortages as trucks cannot deliver goods to stores, and consumer inflation is expected to rise in the coming months as we survey the damage.
We also know that the insurance claims from the looting and riots of the last few days is likely to be north of R10 billion. The South African Insurance Association (SAIA) has called on all policyholders who have suffered losses or damage to property and or business operations which has been estimated to be “in the billions” to reach out to their respective insurance companies or brokers/financial intermediaries for assistance.
Sasria is the only insurer in SA providing cover for loss or damage to insured property as a result of riot and social unrest. Depending on the Sasria cover, businesses can receive a payout of between R500-million and R1.5-billion. No excess payments are required for Sasria claims.
Neil Roets, CEO of Debt Rescue, says the greatest impact will be felt by the innocent, many of whom may have now lost their jobs. “Many small businesses will not survive this. Due to the scale, it is uncertain how long it will take to re-open doors, as there are not only stock shortages but in many cases significant infrastructure damage as well. This will have an immediate impact on household budgets that are already stretched to breaking point.”
The South African Social Security Fund (Sassa)’s suspension of cash payment services, in response to ensuring the safety of their drivers, will also affect those who receive social grants – placing them under further financial strain. Economist Dawie Roodt says the rand, which dropped to R14.75 on Tuesday this week, is set for further weakness, and capital will continue to flee the country. “If this anarchy remains, SA will mostly be a no-go zone,” he says.
Saiba clearly has a critical role to play in the reconstructive efforts that must now commence. Our hearts go out to all those that are suffering and the loss of livelihoods. It these times it is important to remember our calling.
Supporting accountants and SMEs. That is what we do.
We cannot be everywhere and do everything. We cannot save the world.
We help accountants to start their own businesses. Then, if we do it really well, we can have thousands of members doing good in the areas where they live by supporting SMEs and rebuilding what was lost. And that is how we push back chaos and destruction. One SME at a time.
Saiba will be releasing a “Disasters and Financial Planning” guide for preparedness and recovery is about to be released for members.
Here’s a taste of what to expect: “Disaster preparedness begins with a well-crafted personal financial plan based on your family’s values and goals. Ideally, you should develop a financial strategy with the help of professionals such as your family attorney and a financial specialist. These professionals can help you make informed, thoughtful decisions about your family’s present and future financial activities.”
- Developing a general family disaster plan, including creating a disaster supplies kit, assessing your property’s disaster vulnerability and creating evacuation and communication plans.
- Protecting your property, including having adequate insurance and implementing mitigation efforts.
- Protecting your health and life, including understanding what is and is not covered by health, disability and life insurance policies.
- Protecting your loved ones, including estate planning and creating a living will.
- Protecting your income, including managing debt and understanding government benefits after a disaster.
- Protecting your records, including what to keep and how to store it.
- Recovering from a disaster, including what to do on a financial basis in the event of a disaster.
This will be a crucial guidebook for accountants in the coming weeks and months. It can and should be used to assist clients in their recovery plans. It opens up new avenues for accountants to do volunteer work, while at the same time making a massive contribution to the rebuilding of the country.
As accountants, let’s be the first responders that the country needs right now.