COSATU statement on the 2022 Fourth Quarter GDP numbers

7 March 2023

The Congress of South African Trade Unions has noted the latest GDP growth figures by Stats SA, showing the economy shrunk by 1.3% in the fourth quarter of 2022. These numbers are not shocking considering that load shedding, fuel price hikes, interest rate hikes, and budget cuts have acted as a drag on the economy for the last couple of months.

These numbers must serve as a wake-up call for South Africa.  We cannot afford to continue to limp along and not undertake the decisive actions needed to grow the economy and create jobs. This should push the government to accelerate the implementation of the commitments made in the SONA and budget speech, in particular measures to ramp up maintenance of key Eskom power stations and bring new energy generation onto the grid.

The Federation hopes the government can start promoting investment in rural areas and  the townships because economies are made up of people. There is a need to reduce the red tape and improve coordination between government agencies and departments that are supposed to help SMMEs. 

In addition to targeting employment, the Reserve Bank should align its policy to industrial development, introduce foreign exchange controls, and impose quantitative controls on commercial banks to ensure that a quarter of their loans go to priority sectors that drive the growth path and create jobs on a larger scale. The government and the private sector need to come to the party and play their roles if we are to turn the economy around.  Key interventions must include:

Protecting and rebuilding passenger and freight rail which are critical to getting passengers and goods to their destinations on time, this is critical for mining, agriculture, manufacturing sectors, and the cities.

· Modernising our ports so our exports can be competitive.

· Repivoting and financing embattled State-Owned Enterprises so they can fulfil their developmental and economic mandates.

· Rebuilding dysfunctional municipalities to stem the closure of businesses that cannot operate without reliable basic services.

· Tackling corruption to ensure badly needed revenue is spent on public services and stimulating the economy and not lost to criminals.

· Investing more in SARS to tackle tax and customs evasion, thus enabling the state to provide quality public services, and grow local manufacturing sectors.

· Ramping up local procurement support by the state, businesses, and consumers.

· Ensuring that social relief for workers and the unemployed reach them pension relief for workers, in particular the SRD Grant for the unemployed and linking its recipients to skills training programmes.

· Mobilising financial stimulus for the economy, and for jobs-rich sectors and SMMEs.

· Reducing the fuel price regime which consumes 28% of the fuel price and is suffocating the economy.

· Alternatives to retrenchments, including expanding the Presidential Employment Stimulus to accommodate at least 1 million active participants and other job creation programs.

If government and businesses fail to undertake these urgent interventions, then we must expect next quarter’s reports to continue this negative path and to see jobs being lost.  What we cannot afford is to allow things to continue this trajectory.

Issued by Sizwe Pamla, National Spokesperson, COSATU, 7 March 2023