COSATU statement on the third quarter GDP numbers
6 December 2022
The Congress of South African Trade Unions has noted Statistics South Africa’s report that shows that South Africa’s economy, as measured by the GDP has seen a third quarter growth of 1,6%, an improvement from the 0,7% contraction in the second quarter. These are encouraging figures, but the country remains stuck in the reality of a stagnant economy; these numbers mean that the South African economy marginally escaped sliding back into recession this year.
These numbers, though, hide the fundamental reality of an economy that still does not have a reliable electricity supply. The projected fuel price hikes, government austerity and the ongoing retrenchments are likely to reduce the purchasing power of many South Africans. This is calamitous for an economy that derives 60% of its capacity from consumer spending.
South Africa has now taken over the dubious honour of being the most unequal society on the planet, and what is worse is the fact that in South Africa inequality is severely racial, gendered, and spatial.
The government led infrastructure development programme should help in strengthening local industries by increasing local content of the infrastructure development projects. Now more than ever, government needs to intensify its investments and infrastructure drives in the economy.
This can be achieved if government deals with corruption and wasteful expenditure. The government’s spending patterns have implicated our members on pay and the size of the public service. Last year, 2020/2021 financial year, the Auditor-general Tsakani Maluleke pointed out that irregular expenditure by national and provincial government departments increased by 34% to R167bn, indicating the flouting of supply chain laws when making decisions.
The AG said this is not even a true reflection and could be even higher due to some government departments and entities not having completed their financial statements for audit by the auditor-general’s office.
Job creation is the only way to spur and sustain economic growth and to ensure the redistribution of wealth in a meaningful way. The jobs bloodbath that is continuing in all the sectors of the economy and the rising cost of living is recipe for disaster.
The government should help small businesses to deal with the high administered prices such electricity, transport costs and the non- availability of cheap finance. The government continues to focus on advancing transformation through fiscal distribution measures, rather than transforming the structural basis of our socioeconomic challenges. We need a structural transformation if we are to fix the country’s economic problems.
Issued by Sizwe Pamla, National Spokesperson, COSATU, 6 December 2022
