Not since the recession four years ago has South Africa’s quarter-on-quarter GDP come in as low as 0.7%. Tuesday’s number surprised economists, who had predicted 1.2%. The primary cause was strikes, which saw manufacturing activity decline by 6.6%, taking a chunk out of third quarter GDP. The automotive sector witnessed its most protracted stoppages in recent memory.
A key figure here is Irvin Jim, general secretary of the National Union of Metalworkers of South Africa (Numsa), who was a vocal leader during the strikes. Jim is embattled on several fronts, clashing with Cosatu president Sdumo Dlamini over the fate of Zwelinzima Vavi, and hinting at pulling out of the ANC.
There is no question that, since the rise of Amcu in the Marikana debacle, unions have been vying to outdo each other with exorbitant demands. This was a factor in the Numsa-led strikes.
There’s also been an attempt by Jim to show what muscle he can bring to his battles with political foes. The resignation of Numsa president Cedric Gina, apparently over differences about support for Jacob Zuma, adds to the turmoil.
Depressed consumer spending and wilting business confidence also fed into the low growth figure, but the central issues revolve around strikes. Fractious unions are damaging our economy.
Ironically higher growth is essential for job creation, yet unions, who are supposed to protect jobs, are pushing the rate in the opposite direction. Finance Minister Pravin Gordhan once said we need 7% GDP growth to meet the need for new jobs.
At 0.7%, SA is more likely to shed jobs, which will be manna for destructive politicians such as Julius Malema and Jim.