FEDUSA Disappointed with Pessimistic Economic Growth As A Result of Own Goals

The Federation of Unions of South (FEDUSA) is deeply concerned with the pessimistic economic growth as a result of own goals scored by President Jacob Zuma andthe recent crisis in South Africa, brought on by the irresponsible and disastrous reshuffle of the cabinet which created a major economic predicament, and resulted in approximately R500 billion being wiped from the South African economy. The Gross Domestic Product (GDP) growth rate has now contracted to minus zero-point seven percent (-0.7%) according to data released by Statistic South Africa (StatsSA) today.

FEDUSA believes that these depressing numbers will result in increased hardship for its members who are already faced with inflationary increases in the prices of food and transport, especially in a situation where our country’s sovereign credit rating has just been downgraded to junk or sub-investment grade by Standard & Poor, and Fitch with Moody’s expected to follow suit soon. Using the widely accepted measure of recession as two or more consecutive quarters of negative growth, the sad reality is that the South African economy has now moved into a recession. FEDUSA is completely disheartened by the recent announcement, as all positive strides and efforts made by TeamSA to reassure investors and safeguard our membership, has now been completely diluted by the continued political turmoil and disastrous decision making in the recent months. The time for diplomacy is over, said FEDUSA Acting President, Chris Klopper. Responsibility must be accepted, punitive measures must be extended and our politicians should have the courage of conviction, to accept that the low growth and high unemployment levels will continue in this vain due to their inaction, emphasised Klopper. The opportunity presents itself now, to live up to the NDP Vision for the economy and employment, said Klopper, “we can reduce the unemployment rate to 6% by 2030. It will require leadership, difficult political choices and effective implementation” says the NDP vision.

FEDUSA remains extremely cautious of the fact that the latest casualty party to the negative trend is the tertiary sector, that has been equally marred by instability and uncertainty.  Considering that “education is the most powerful tool which you can use to change the world, to eliminating gender inequality, to reducing poverty, to creating a sustainable planet, to preventing needless deaths and illness, and to fostering peace”, we have to safeguard our educational institutions and not compromise the security and prosperity of our future leaders through inaccessibility and unaffordability to quality, world class education, argued Klopper. Moreover, our membership in the sector providing superior levels of research and development opportunities amongst others, must be protected. The sector covers finance, transport, trade, government and personal services.

StatsSA said the biggest contributors to negative growth were trade and the catering and accommodation sectors which dropped by 5.9% resulting in a negative 0.8% percentage point impact on the overall GDP growth rate.

South Africa’s embattled manufacturing sector shrunk by 3.7%, contributing a negative 0.5% of a percentage point to the GDP growth rate. All in all, seven sectors of the manufacturing industry were down to negative territory in the first quarter of this year, of which, the biggest drops were recorded by petroleum, chemical products, rubber and plastics.

After slumping in negative territory for eight quarters in a row, agriculture, forestry and fisheries rebounded to a 22.2 % growth in the first quarter of 2017 largely as a result of good growth in the production of food crops and horticultural plants.

Whilst the key economic sectors remain the focal point for growth and development, it is high time that Government shoulders equal responsibility for the grim statistics, by unlocking the potential of the public service, insisted Klopper. Vacant posts that remain unfilled in key public sectors such as health, will contribute extensively towards job creation and the improvement of service delivery.

The ten person Steering Committee of Ministers and Trade Union Leaders need to expedite their planning as a matter of priority, to ensure that the proposals for the Jobs Summit are implemented towards the achievement of higher levels of Inclusive economic growth and employment, concluded Klopper.


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FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry.  See www.fedusa.org.za for more information.

For interviews please contact:

Chris Klopper

FEDUSA Acting President

Cell: 083 708 7733