Johannesburg - It was a meeting that was meant to play down the effects of labour unrest, but what President Jacob Zuma did manage to do was trigger a run on the rand.
Shortly after his speech to journalists at a hastily convened news conference, the rand broke through the 10 to the dollar level, and it didn’t bottom out there.
The currency slipped to R10.09 to the dollar on further news that mining company Glencore Xstrata was facing a wildcat strike at three of its chrome mines in South Africa.
The last time the rand broke the psychological barrier of R10 to the dollar was four years ago. For consumers, a weaker rand spells inflation and further price hikes at the petrol pumps that will, in turn, push up living costs.
The president’s woes were made worse when Cosatu general secretary Zwelinzima Vavi said on Thursday that ongoing protests across the country were a ticking bomb about to explode.
“Nineteen years later in a democracy we are becoming the protest headquarters of the world; we call that a ticking bomb about to explode,” Vavi told delegates at the SA State and Allied Workers Union congress in Ekurhuleni.
He said the majority of people, especially in the townships, “cannot take it any more” and were living in “grinding” poverty and unemployment, hence the protests.
Zuma’s address was meant to reassure foreign and domestic investors that the government was committed to sorting out the troubled mining sector, which over recent months has been racked by unrest, strikes, growing tension sparked by union rivalry, looming job shedding and the police killing 34 miners at Marikana last year.
Zuma said although South Africa’s economy was among the first few to recover quickly from the global financial crisis, the recovery “had not been as strong as needed”.
“We need faster growth. Without faster growth we cannot succeed in reducing unemployment, poverty and inequality,” he said.
“The government will redouble its efforts to support the economy towards achieving this objective.”
Zuma, who condemned illegal strikes, said, however, strikes were a “feature of democracy”.
“Strikes are a normal thing in a democratic country. It is only in undemocratic countries where there are no strikes,” he said.
“I don’t think we should take strikes as a problem because workers in democratic countries are allowed by law, by the constitution, to go on strike.”
Zuma said the government was intervening in the industry by engaging all role-players, including mining companies and labour unions. He was quick to dispel any perception that his government could favour the National Union of Mineworkers, which is affiliated to the ANC alliance partner Cosatu.
He said the process would be impartial and engage all unions, including the NUM’s rival, the Association of Mineworkers and Construction Union.
He added that Finance Minister Pravin Gordhan had been using every available opportunity to reassure foreign and domestic investors of “our seriousness and commitment to the mining sector and to affirm confidence in South Africa as an investment destination”.
But it wasn’t enough.
Analysts and traders said Zuma had failed to outline a plan that would resolve the industrial strife, which was effecting mining output.
DA parliamentary leader Lindiwe Mazibuko said Zuma should have spoken decisively about the problems facing the economy.
“But instead of a plan of action on how to address our economic growth collapse to just 0.9 percent in the first quarter, we received only more of the vague reassurances which have characterised his term in office,” said Mazibuko.