The Congress of South African Trade Unions (Cosatu) called on the government on Thursday to review the constitutional mandate of the South African Reserve Bank to make employment an explicit objective of its monetary policy.
Zwelinzima Vavi, the general secretary of Cosatu, said the mandate of the bank should be reviewed because the current strength of the rand had caused thousands of workers in the clothing, textile and footwear industry to lose their jobs.
The rand should fluctuate between R9 and R10, because the currency was bad for jobs and the economy when it was trading at R7,50, said Vavi. On Monday he had said the recent interest rate cut to boost the economy was ”too little, too late”.
”When the rand strengthens under these conditions, jobs are destroyed. Congress calls for a rand valued more appropriately, and designed to take into account employment and the needs of the local industry and mining,” Vavi told Cosatu’s national congress in Midrand on Thursday.
The resolution calling for the review of the constitutional mandate of the bank was proposed to congress by the Southern African, Clothing and Textile Workers’ Union (Sactwu), which was the hardest hit by the strengthening of the rand.
Sactwu general secretary Ibrahim Patel said: ”We have chosen here a band which we believe is balanced.”
Reserve Bank governor Tito Mboweni, who was present at the Cosatu congress, has on more than one occasion stated that the primary function of the bank was to contain inflation, and his team was committed to achieving that.
Vavi said the congress had noted that the mandate of the central bank was to protect the value of the rand in the interest of balanced and sustainable economic growth in the country. However, protecting the rand at the current rate was bad for the economy.
”The rand at R7,50 is bad for jobs, bad for workers and bad for the economy,” Vavi said.
The South African Democratic Teachers’ Union said the congress should initiate further debate on the matter between Cosatu and its partners in the tripartite alliance — the South African Communist Party and the African National Congress. — Sapa