The floods are likely to result in a further setback to the South African economy as a whole.
The World Bank published its latest “Africa’s Pulse” this month, just as the floods hammered the KwaZulu-Natal economy and brought Durban harbour’s imports and exports to a halt. It will take months and possibly years to rebuild damaged infrastructure.
The World Bank noted uneven economic recovery in Sub-Saharan Africa. While economic activity was projected to grow in Sub-Saharan Africa by 3.9% in 2023, and 4.2% in 2024, economic recovery was sluggish in the three largest economies – Nigeria, South Africa and Angola.
Angola and Nigeria are expected to continue their growth momentum in 2022, up by 2.7 percentage points for Angola and 0.2 percentage points for Nigeria. For South Africa the reverse is true.
“Growth in South Africa is expected to decline by 2.8 percentage points in 2022, dragged down by persistent structural constraints,” the World Bank said.
After a 6.4% contraction in 2020, economic growth in South Africa was estimated at 4.9% in 2021. However, “The recovery in South Africa, while benefiting from persistently high commodity prices, will continue to be held back by structural problems—including electricity shortages, transport and logistic inefficiencies, as well as labour and product market rigidities,” it said.
To that can now be added the loss of life, jobs and infrastructure caused by the KZN flooding.
Image: World Bank Group headquarters, Washington DC. Photo: Franz Mahr / World Bank. Courtesy World Bank / CC.