COSATU statement on the latest GDP numbers
6 September 2022
The Congress of South African Trade Unions has noted the latest GDP growth figures by Stats SA, showing the economy shrunk by 0,7% in the second quarter. These numbers are not shocking considering that load shedding, fuel price hikes, interests rate hikes and budget cuts have acted as a drag on the economy for the last couple of months.
What is worrying is that key job intensive sectors such as mining, manufacturing, agriculture, construction, and energy are the ones that have been hardest hit. There has also been a marked increase in imports for the period under review.
These numbers must serve as a wakeup call for South Africa. We cannot afford to continue to limp along and not undertake the decisive actions needed to grow the economy and create jobs. This should push government to accelerate the implementation of the Eskom Social Compact, in particular measures to ramp up maintenance and bring new generation on to the grid.
The Federation hopes the government can start promoting investment in rural areas and the townships economy because economies are made up of people. There is a need to reduce the red-tape and improve co-ordination between government agencies and departments that are supposed to help SMMEs.
The government and the private sector need to come to the party and play their roles if we are to turn the economy around. Key interventions have to include:
Stabilising energy supply by helping Eskom to slash its debt burden, focus on maintenance and bringing on board new generation.
Protecting and rebuilding passenger and freight rail which are critical to getting passengers and goods to their destinations on time, this is critical for mining, agriculture, manufacturing sectors and the cities.
Modernising our ports so our exports can be competitive.
Repivoting and financing embattled State-Owned Enterprises so they can play their developmental and economic mandates.
Rebuilding dysfunctional municipalities to stem the closure of businesses who cannot operate without reliable basic services.
Tackling corruption to ensure badly needed revenue is spent on public services and stimulating the economy and not lost to criminals.
Investing more in SARS to tackle tax and customs evasion, thus enabling the state to provide public services, and protecting local manufacturing sectors.
Ramping up local procurement support by the state, businesses, and consumers.
Ensuring that social relief for workers and the unemployed reaches them, in particular pension relief for workers and the SRD Grant for the unemployed and linking its recipients to skills training programmes.
Mobilising financial stimulus for the economy, and in particular for jobs rich sectors and SMMEs.
Reducing the fuel price regime which is suffocating the economy.
Alternatives to retrenchments, including the ramping up and expansion of the Presidential Employment Stimulus and other job creation programmes.
If government and business fail to undertake these urgent interventions, then we must expect next quarter’s reports to continue on this negative path and to see jobs being lost. What we cannot afford is to allow things to continue on this trajectory.
Issued by Sizwe Pamla, National Spokesperson, COSATU, 6 September 2022
