The Congress of South African Trade Unions (Cosatu) said on Thursday it would intensify strikes already planned for July if the South African Reserve Bank announces another increase in interest rates later in the day.
”If the Reserve Bank again increases the repo rate, either by half a percentage point or a full percentage point, we will be left with no option but to intensify the strike that we are going to be embarking upon in July and August, and the rolling mass action that will take us right up to the end of this year,” Cosatu general secretary Zwelinzima Vavi said.
South Africa’s rand hit its weakest level since April 1 on Wednesday, weakened by the country’s gloomy growth and inflation outlook. By 6.55am GMT, the rand was trading 0,34% weaker at 8,03 to the dollar.
Cosatu, an ally of South Africa’s ruling African National Congress, is an umbrella labour federation representing two million workers.
South African inflation jumped to a near five-and-a-half-year high in April. Reserve Bank Governor Tito Mboweni is expected to increase the bank’s repo rate by a full percentage point later on Thursday, according to a Reuters poll of 22 economists.
Cosatu already said on Wednesday it planned to call a national strike next month to protest against job losses linked to the country’s power crisis.
South Africa has suffered electricity shortages since the start of the year as power utility Eskom struggles to generate enough power to meet demand.
The power shortages have dented economic growth — which fell to a six-and-a-half-year low of 2,1%, quarter-on-quarter in the first three months of 2008 — unnerved investors and heaped pressure on President Thabo Mbeki.
National stayaway
”The action is … in response to the danger of retrenchments in the mining sector and elsewhere due to Eskom’s decision of to reduce electricity supply to industry and its threat to oppose any new major construction initiatives,” said Cosatu spokesperson Patrick Craven on Wednesday.
”It will begin on July 2 2008 with provincial action, continuing throughout the month of July and culminating in a national stayaway on 30 July.”
”This comes at the time when unemployment is still about 35% and poverty affects about half of the population,” said Craven.
He said Cosatu would work constructively to help find a lasting solution to the national power crisis.
Cosatu was demanding that the costs of the power failures not be borne by the poorest, that workers not be retrenched as a result of the cuts and that the electrification of poor households not be compromised.
It also wanted a package of short-, medium- and long-term measures and significant financial contribution by the government towards new power generation.
The mining sector should not be sacrificed in managing the crisis and electricity disruptions at hospitals, emergency services and other essential services should also be avoided.
”We should be prepared to review projects with a high power usage and low employment density. The smelters have been identified as a key area of concern,” said Craven. — Reuters, Sapa