The GDP figures are an indictment on SA big business that continues with its investment strike
The Congress of South African Trade Unions takes note of the latest gross domestic product figures released by the Statistics South Africa that shows that South Africa’s economy grew by 1,3% in 2015, down from 1,5% in 2014 and 2,2% in 2013.
The agriculture sector contracted by 8, 4%, the largest annual fall in agriculture production since 1995. The impact of the drought in the shrinking of the agricultural sector is deeply worrying and raises questions about food security in the country and also makes urgent the need for the finalization of the expropriation bill ,that was passed by the National Assembly recently. The domination of the agriculture sector by few mainly white commercial farmers cannot be allowed to continue. People need land in order to participate in the economy and we still reiterate our call for a state bank that will help with government’s developmental agenda.
The electricity, gas and water supply industry also shrank in size and the manufacturing sector flat lined. All the sectors that have grown have seen some very marginal growth and this does not bode well for employment creation and poverty reduction.The contraction of the electricity and gas supply industry makes urgent the need for government to invest and encourage investment in the renewable energy sector. This will not only allow the working class and poor to gain access to clean, affordable and reliable energy but will create much needed jobs and help in stimulating the economy.
The stagnation of the manufacturing sector also calls for government to use incentives like subsidies, quotas and tariff hikes to encourage investment in the local manufacturing industry.
The fact that the one sector that saw the biggest increase in growth was the financial sector shows the structural problems in the SA economy, and the need for a far bolder programme of diversification and industrialisation. This validates the case that COSATU has been making that there is deliberate financialisation of our economy. This is not the solution and will have adverse effect on our overall economy long term. We need to grow the economy in areas that create decent and sustainable jobs.
It is worrying that the latest budget speech seemed to be entrenching an austerity mode at a time, when we need economic stimulation. This is made worse by the fact that big business continues to be on an investment strike and they also continue to take their profits out of the country. These GDP numbers are an indictment on big business and shows that they have no developmental consciousness and are not invested in the future of this country.
The infrastructure development programme should help in strengthening local industries by increasing local content of the infrastructure development projects. Now more than ever, government needs to intensify its investments and infrastructure drives in the economy. All departments and municipalities must play their role and contribute decisively towards creating the 100 000 new jobs we need per month. Job creation is the only way to spur and sustain economic growth and to ensure the redistribution of wealth in a meaningful way.
Statement issued by COSATU, 1 March 2016
