SA: Unions plan national shutdown – amid worries ‘we’re becoming another Zimbabwe’

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JOHANNESBURG: The South African Federation of Trade Unions (SAFTU) is planning a national shutdown to protest the rising costs of living in the country and the ongoing energy crisis.

SAFTU is the country’s second-largest trade union confederation with an estimated membership of 800,000 workers.

“We cannot allow our country to be at the doorstep of a failed state as we have seen in Zimbabwe and other countries,” SAFTU general-secretary Zwelinzima Vavi told the SABC.

“As I speak to you now we are load shed. We get load shed three to four times a day. We are losing our country and if we don’t stand up now and start a process of unifying, all those who disagree with this path that has been travelled for the past 28 years, we will follow Zimbabwe.”

While SAFTU has not provided a date or time for the proposed national shutdown it is set to provide further details, along with a list of demands, in a press conference later on Thursday (7 July).

South Africa’s CPI figures for June, set to be released in mid-July, are likely to show that inflation breached the 7% level on the back of rising fuel and food costs.

This comes after inflation reached a five-year high of 6.5% in May 2022, up from 5.9% in April 2022.

Transport and food and non-alcoholic beverages (NAB) accounted for just over half of the annual rate, with sharp price increases recorded in both categories. Fuel, in particular, continues to be a major contributor: if the impact of fuel is removed from the CPI reading in May, the headline rate falls to 5.1% from 6.5%.

Diesel prices jumped by 8.1% between April and May, taking the annual rate to over 45%. The average price of a litre of diesel in May 2021 was R16.20 – meaning it costs R729 to fill a 45-litre tank. Twelve months later, with the average price at R23.67 per litre, filling the same tank cost R1,065.

Load shedding 

This situation has been exacerbated by South Africa’s worst load shedding outages on record, with Eskom currently instituting stage 5 load shedding on a daily basis.

Investec chief economist Annabel Bishop said South Africa’s economic growth now faces increased risk in the coming months as prolonged load shedding is set to continue. She added that the outcome for GDP in 2022 will now depend on how long the country experiences severe outages.

“A couple of days of stage 6 load shedding in one year will neither derail economic growth, nor credit ratings’ outlooks for South Africa, but persistent severe load shedding will – while South Africa enters a worsening global economic environment in the second half of 2022 as well.”

“This comes as South Africa’s fiscal metrics have been benefitting from both improved revenue collections – on the back of high commodity prices and increased SARS efficiencies – and the dampening effect of high inflation itself on the debt and deficit ratios to nominal GDP.”