Unless civil society, labour and government can find new ways of engaging, violent protests will continue to drain limited resources that should be spent on development.
South Africa risks being trapped in a cycle of poverty and destruction if violent service delivery protests are allowed to continue unabated.
Unless civil society, labour and government can find new ways of engaging and solving problems, the country will continue to waste resources on fixing and replacing assets damaged during protests, instead of rolling out new infrastructure, says Sasria SOC Ltd.
Sasria is a state-owned insurer that provides cover to businesses and municipalities that suffer losses related to riots, strikes, terrorism and public disorder.
Service delivery protests have been on a steady upward trajectory for the past five years, in terms of both the number of protests and the severity of claims resulting from such protests.
“We have to find new ways of engaging and solving problems, as service delivery protests – which often turn violent – lead to the destruction of assets and are a drain on the limited resources of the state,” says Sasria MD Cedric Masondo.
“This leaves the country hamstrung in terms of being able to deliver new infrastructure and services to communities that need it most.”
Masondo points out that instead of building new schools, roads and clinics with money that should go to the fiscus as dividend from Sasria, these funds end up going towards replacing property that has been damaged during service delivery protests.
“This is obviously a classic case of cutting off your nose to spite your face. We end up spending our resources on fixing the same problems, day in and day out,” he says.
He adds that due to the unprecedented rise in damages caused by violent protests, insurance for special risks can no longer be seen as a luxury in South African, but as a necessity, because of the volatile socioeconomic dynamics that have become part of daily life.
Nor are violent protests isolated to any specific province or region, they have become endemic across South Africa, and the momentum seems to be increasing.
Service delivery protest claims processed by Sasria increased sharply in the 2018/19 financial year, totalling over R1.7 billion in value from over 5 000 claims, compared to over 3 000 claims in the 2017/18 financial year that amounted to around R800 million.
Masondo notes that the first five months of the 2018/19 financial year were particularly violent, with Sasria seeing more than 2 000 new claims registered, totalling an estimated value of R1 billion.
Sasria has played a significant role in preventing job losses and maintaining livelihoods, by enabling businesses to restore their liquidity and operations quickly and efficiently after experiencing damage due to violent protests, he says.
“But something drastic needs to be done. While protest action is enshrined in our Constitution and people have the right to assemble and voice their grievances, the culture of violent protests must come to an end,” Masondo adds.
“If not, we will remain trapped in a cycle of poverty that never ends, because we are spending our resources on fixing the same things over and over again. This is not progress; this is not conducive to economic growth.”
However, the insurer is confident that it will continue being able to meet claims, despite the alarming spike in service delivery protests – currently, a startling 80% of its claims relate to service delivery action.
“Though we have experienced a considerable rise in the number and severity of claims in the recent past, the organisation’s financial position remains extremely healthy,” Masondo said. “The business is self-reliant and continues to maintain a solid balance sheet.”
Sasria has R8.4 billion worth of assets under its management and reserves of some R6.5 billion, with a solvency ratio of 270%.