SA economy remains in frightful shambles and mixed messages are not helping

The inability to establish and carry out a coherent economic policy beyond the politics of factionalism will drive many more into the painful clutches of poverty, writes Zama Mthunzi.

Most South Africans are hurting, and those who are not may soon be in the same boat.

As we begin the new year, the South African economy remains in frightful shambles.

The economy has shrunk to numbers we last saw 11 years ago during the global economic crisis.

Unemployment has risen to a record high in 11 years and the never-ending retrenchments have spilt over from last year with Telkom announcing recently its plan to retrench more than 3 000 workers.

Trade union federation Fedusa claims that the total number is 6 000.

Chrome mining companies have warned of 1 200 possible job cuts and are meeting the trade unions involved while Massmart is planning to close more than 30 stores.

Just weeks into the new year, South Africa is now sitting with the possibility of losing more than 9 000 jobs.

The country has moved from losing around 2 000 jobs per quarter in the second quarter of last year to losing 28 000 jobs in the third quarter of the same year.

Unemployment and retrenchments are the most serious economic problems facing South Africa right now.

When President Cyril Ramaphosa announced that we must “prepare for mass job losses” we were clearly not ready.

This is a social disaster. It needs an immediate response and not the long-lasting opposing rhetoric that we are used to, such as “we must attract foreign investment”, “we must create more jobs” and “we must improve our public service”.

This is the never-ending script of Ramaphosa. His voice rings in my head as I write this.

This is what was said at the governing ANC’s 108th birthday celebrations, at the Business Economic Indaba and the recent ANC lekgotla.

Are we really going to watch millions of our people thrown on to to the streets of poverty?

THE PROPOSED DIRECTION

Business leaders, politicians, labour and civil society representatives met in Sandton for the annual Business Economic Indaba on January 14 this year under the theme Activating Actual Outcomes.

There seemed to be a consensus that the country will have a “negative outlook for the economy this year” from the representatives attending.

South Africa’s economic growth forecast this year by the World Bank will fall from 1.5% to 0.9%.

This means, on average, South Africans will get poorer this year.

Finance Minister Tito Mboweni took to Twitter to “warn” South Africans about this.

He said the “structural economic reforms inertia is frustrating” and that government must move quickly in implementing the reforms that were outlined in the National Treasury economic paper released before last year’s medium-term budget statement.

The paper was heavily criticised and rejected by the governing party’s alliance partners.

At the centre of the paper is the proposal to push for the privatisation and unbundling of power utility Eskom.

The SA Communist Party called the paper “elite, capitalist proposals” while labour federation Cosatu said it was and “incoherent, confused and unreliable plan to the bolster economy”.

Against this dismal assessment by the ANC’s coalition partners, it would seem that no concrete programmes will be rolled out immediately to at least alleviate the crisis of unemployment and retrenchments.

The call from Mboweni to move quickly to respond is needed amid the growing frustrations.

Before we can talk about creating jobs we must firstly talk about how we keep those we currently have as they seem to be disappearing fast.

As Cosatu has suggested, amending the Labour Relations Act to make it more difficult for employers to retrench could be one of our immediate responses.

We can put this together as part of our plan to fight one of our biggest challenges right now.

As the crisis deepens it would seem more and more poor South Africans view this as the natural order of things – that their lives are destined for unemployment and poverty.

This attitude is a threat to any form of a plan to improve the dire situation.

Mthunzi is a Wits University mathematical science graduate. He is a social justice activist focusing on access to quality education to address the country’s socioeconomic issues

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