The Effect of the Russia-Ukraine Crisis on South African Entrepreneurs

Abstract

South Africa's delayed recovery from COVID-19 is being hampered by the Russia-Ukraine situation. The true impact on any economy is determined by its reliance on oil and gas exports or imports, tourism, imported grain, and fertilizer, among other things. Long-term consequences include a probable geopolitical realignment, social and economic upheaval, and debt insolvency. This will very certainly lead to increased inequality and poverty. Rising gasoline and food costs, inflation, and financial instability are the most evident consequences of the war in Africa. The poor are the severely affected because food and transportation account for a major amount of their consumption expenditure. The world economy was starting to recover from the COVID-19 pandemic before the war in Ukraine, but now there is doubt about how well it will do. Due to Russia's position as the world's third-largest producer of oil, second-largest producer of natural gas, and one of the top five producers of iron, copper, and aluminium, any significant decrease in energy supplies and metal shipments will almost certainly result in a sharp increase in the price of these commodities on a global scale. As a result, on the day the invasion started, financial markets worldwide experienced a steep collapse and the prices of commodities, petroleum, and Nat gas all rose substantially.