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Strikes hurt SA’s credibility – Gordhan

Johannesburg - South Africa’s credibility with investors had been hurt by the strikes that were limiting growth in the economy and had led to two credit rating downgrades, Finance Minister Pravin Gordhan said.

The government and businesses were addressing the concerns of ratings companies and the causes of the strikes in the mining industry, Gordhan said on Thursday in a speech in Johannesburg.

South Africa's credibility with investors had been hurt by the strikes that were limiting growth in the economy and had led to two credit rating downgrades, Finance Minister Pravin Gordhan said. Photo: Bloomberg. Credit: Independent Newspapers

The strikes “have damaged the credibility of South Africa”, Gordhan said. “It has created doubt in a certain class of investors.”

The economy is growing this year at the slowest pace since a 2009 recession, as strikes that started in platinum mines and spread to gold operations cut output and exports. A recession in Europe is also hurting demand for manufactured exports. Walkouts have cost more than R10 billion in lost mine output and will probably shave about 0.5 percentage point off economic growth, Gordhan has said.

About 3 000 workers at Lonmin’s Marikana platinum mine downed tools on August 10 demanding better pay. More than 46 people died in clashes at the mine northwest of Johannesburg, the worst mining violence since the end of apartheid.

Workers at AngloGold Ashanti, Anglo American Platinum, Kumba Iron Ore, farmworkers and transport workers later went on strike as well. The strike at Anglo American Platinum ended on Thursday.

The government lowered its forecast for economy growth to 2.5 percent on October 25 from a previous estimate of 2.7 percent. – Bloomberg

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