Date: 2022-05-12 12:54:19
Economic impact of April floods on the City
A decline of between 1.5 percent to 1.8 percent of the Gross Domestic Product (GDP) is estimated following a survey of Durban businesses affected by the April floods.
The preliminary results of the economic activity and outlook survey was conducted via the Durban Edge from the City’s Economic Development Unit.
One of the main areas of impact by the April floods, which requires urgent restoration, was in risk and supply chain disruptions. This is due to catastrophic infrastructure damage to roads and the interruption of water and electricity services.
Ongoing assessments of the extent of the damage in affected communities and businesses is underway. However, preliminary data from the survey suggests that the most affected sectors of the economy are manufacturing, agriculture, construction, wholesale and retail, and warehousing and logistics. A further 110 small businesses were impacted with an estimated damage of R20 million.
These results are likely to change as more businesses submit information on the impact suffered with regards to the value of damages, type of damage sustained, and overall productivity loss.
Based on the survey results, all businesses indicated they will reopen and suggested that it will take between 0 to three months to reopen as they need to fix premises and replace lost equipment and stock.
Only 24 percent (almost one-fourth) of businesses indicated they have all-inclusive insurance.
A large proportion of respondents (52 percent) indicated they have no insurance at all. A small percentage (16 percent) of the respondents indicated they only have building/ structure insured and the remaining eight percent indicated they only have business equipment insured.
This would suggest that those without insurance will rely on government support measures which will be disbursed through various national and provincial departments. A coordinated plan is required to support the insurance sector in the provision of inclusive and accessible support to businesses in the City to ensure that Durban is more attractive to investors.
It is positive to note that the business sector has committed to working with the City to rebuild the economy. This was the consensus from business leaders during a business stakeholder meeting convened by eThekwini Mayor Councillor Mxolisi Kaunda recently.
The results of the survey will be used to understand and conduct an economic impact assessment. This will be used to inform the response strategies of all partners.
For an initial overview of the economic impact of the April 2022 flooding on Durban's economy, use the following link: https://lnkd.in/dPd6q_8m