Flash Briefing: Strike; Cosatu & business urge govt to fix economy; lockdown protest; interest rate forecast

By Jackie Cameron

  • South Africa’s biggest trade union group, Cosatu, urged members to stay away from work on Wednesday to protest about job losses, wage curbs and corruption cases. Cosatu, which says it has more than 1 million members, is normally an ally of the ANC. But it has criticised the government handling of the Covid-19 pandemic, with millions of jobs lost during the lockdown.“It is going very well,” Cosatu spokesman Sizwe Pamla told Bloomberg phone. “We will need to get a report back on the workplaces that were shut down. We know though that the mining sector has been heavily impacted, as well as some schools.” Cosatu is angry that the government did not raise civil servants’ salaries in April, as promised in a three-year wage deal struck in 2018 that the government now says is unaffordable, reports Reuters. Civil servant salaries take up 12% of the country’s GDP, a recent OECD country report highlighted. Cosatu organised motorcades, pickets and marches around the country’s nine provinces on Wednesday, but it was not clear how many of its members had heeded the call to down tools, reported Bloomberg.
  • Sentiment in South Africa’s services sector bounced back from an all-time low in the third quarter but remains weak even as restrictions to curb the spread of the coronavirus pandemic were gradually eased. The Bureau for Economic Research says more than eight out of 10 businesses remain unsatisfied with conditions. The survey, which covers hotels, restaurants, real estate, business services and transports signals that the “road to full recovery and the return to pre-lockdown levels is likely to be slow and bumpy,” it said.
  • The South African Chamber of Commerce and Industry’s business-confidence index dipped to 85.7 in September from 85.8 the previous month, it said. It is urging the government to speed up structural reforms to bolster economic growth and create jobs as sentiment has partially recovered from restrictions to curb the spread of the coronavirus. It released both August and September data on Wednesday. The government should also pursue enabling policies at a time when the Northern Hemisphere looks set to experience a second wave of coronavirus infections while South Africa appears to have passed the worst of a local outbreak, Sacci said. Restrictions should be limited to areas and communities with high infection rates so as not to cause further damage to the economy, according to the group. South Africa started a gradual and phased re-opening of the economy on May 1 and moved to the lowest lockdown level toward the end of last month.
  • The message of finding an alternative way to curb the spread of coronavirus reflects a call by scientists of global standing who have come together to create The Great Barrington Declaration. The group says that current lockdown regulations are ‘producing devastating effects on short and long-term public health’, with ‘lower childhood vaccination rates, worsening cardiovascular disease outcomes, fewer cancer screenings and deteriorating mental health leading to greater excess mortality in years to come.’ Three prominent South Africans, Nobel winner Dr Michael Levitt, financial services entrepreneur Magda Wierzycka – of Sygnia – and Nick Hudson of thinktank PANDA have already expressed their support for the declaration.
  • South Africa’s consumer inflation is likely to remain within the target range of between 3% and 6%, allowing the Reserve Bank (SARB) to keep an “accommodative” rate stance for at least the next two years, deputy governor Fundi Tshazibana said on Wednesday. “Baring materialisation of upside risks, this benign inflation outlook should allow the SARB to maintain an accommodative stance for most of the coming two years, and only withdraw stimulus in a gradual fashion,” Tshazibana said in a speech to a fixed income conference, published on the bank’s website, reports Reuters.
  • Supermarket chain Pick n Pay said on Wednesday first-half profit is expected to fall as much as 60% due to trading restrictions arising from the Covid-19 pandemic and once-off costs.

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