Experts say the international monetary organization and other stakeholders believe the South African economy will suffer from current crises, such as food prices and power outages. The IMF also revealed in its recent report that the country would likely experience inflation for the better part of the coming year.
After further review, the IMF believes there were reasons beyond doubt that the South African economy would no longer grow at the pace it had earlier projected. It now believes that the economy will grow by only 2.1% this year. This is against its earlier expected growth projection of 2.3%, which the IMF released earlier this year in July. South Africa’s economy has grappled with the energy crisis, KZN floods, rising food and fuel prices, and higher inflation.
For 2023, the IMF also revised the country’s expected economic growth from 1.4% to 1.1%. With the new revisions, Sub-Saharan African countries are expected to grow faster than South Africa after their IMF pegged their projection at 3.7% for 2023.
In the same vein, the new IMF report released in the October 2022 World Economic Outlook also reviewed its projected global growth expectation for 2023 to 2.7 percent, down from 2.9 percent in July 2022. It expects the long-term average growth for the world economy is around 3.4 percent.
Economic and financial experts say that the South African economy could well suffer even a bigger catastrophe if the impending strike action by workers from the national port and freight-rail.
According to a report by Business Tech, South Africa’s economy cannot afford a strike at Transnet, and the stakes are higher than they have ever been with the country already on its knees, says the Steel and Engineering Industries Federation of South Africa (Seifsa).
A full-blown strike at the national port and freight-rail operator will have serious effects on the economy – halting exports and putting thousands of jobs on the line, added the federation.
“A full-blown strike at Transnet, will add to the damage suffered by the South African economy. This will be as bad as load-shedding in terms of economic impact. For an economy battling to maintain momentum this could well be the final nail in the coffin,” said CEO, Lucio Trentini.
On 7 October, Transnet declared force majeure across all its harbours as employees began to strike, demanding higher wages – the strike continues on Tuesday (11 October), with threats by unions that it will intensify if a resolution is not met.
Over 40,000 union members have downed tools. Transnet and the unions are now in a deadlock negotiation around the table at the Commission for Conciliation, Mediation and Arbitration (CCMA).
The protesting unions, namely the South African Transport and Allied Workers Union (Satawu) and the United National Transport Union (Untu) originally sought a 15% wage increase; however, this has changed.
According to a press statement, Transnet has acknowledged that the two unions have signed picketing rules and agreed on the site to facilitate peaceful picketing.