FEDUSA Deeply Concerned by 51% Collapse of the Economy
9 September 2020
The Federation of Unions of South Africa (FEDUSA) is deeply concerned by the 51% percent decline in the economy following the announcement of Gross Domestic Product (GDP) figures for the second quarter of 2020 announced by StatsSA on Tuesday. This is the most severe drop in economic growth on record, and the fourth consecutive quarter of decline from the last quarter of last year. A decline of this nature was expected given that the COVID-19 Pandemic necessitated a strong lockdown, but an even stronger effort is now needed to restart an economy that was already floundering before the lockdown.
The StatsSA announcement also comes at a time when state power utility Eskom has resumed load shedding and all credit rating agencies have now downgraded the county to sub-investment grade junk status which make the cost of borrowing money more expensive.
The key figures show that construction was down by a massive 77%; manufacturing fell 75%, mining dropped by 73% while transport and retail each dropped by 68%. Many economists believe that the numbers paint a particularly bad picture for labour as TERS payment catastrophes continue to plague the UIF system and the R350 COVID-19 relief scheme is set to be terminated at the end of next month. Of great concern is impending job losses – which have already breached the psychological 30% mark in June this year – and could escalate even further over the next six months as more firms collapse.
“The drastic decrease in South Africa’s GDP reflects the massive impact and hardships that have been encountered by the economy due to the COVID-19 pandemic,” says FEDUSA General Secretary Riefdah Ajam.
“As FEDUSA, we are working tirelessly with government and other social partners in NEDLAC to ensure that a comprehensive and progressive economic recovery plan is fast tracked and clearly defined to give tangible outcomes in the immediate future and to avoid irreparable decay. With South Africa now largely passed the peak of the virus, it is time for the State of National Disaster to be lifted and for the country to get back to work in rebuilding the economy.” Ajam added.
For interviews please contact:
Ms Riefdah Ajam
FEDUSA General Secretary
079 696 2625
FEDUSA Media and Research Officer
072 637 8096