The South African rand is far too strong, Congress of South African Trade Unions (Cosatu) secretary general Zwelinzima Vavi said on Monday.
He was addressing the launch of a joint declaration by the country’s three major trade union federations and a grouping of important South African manufacturers in Johannesburg to create decent jobs.
“The declaration calls for interventions to ensure an appropriately valued, competitive and stable currency,” Vavi said.
A competitive currency would allow South African manufacturing to compete on a similar footing to other developing countries, he said.
“The Chinese economy has grown because the Chinese actively intervene in their currency and they peg it at a particular level.
“Government from time to time speaks about the need for the rand to reach a competitive level, but we only really hear this in the budget speech or the State of the Nation address.”
Vavi said the South African Reserve Bank confirmed that it bought “lots of dollars”, but this was not enough.
“We need to see some aggression in terms of the competitiveness of the exchange rate and more needs to be done.”
Vavi also called for a reduction in real interest rates, as well as the introduction of concessional finance for productive investment.
“Currently, the unavailability of finance and the exorbitant level of lending rates by the financial sector makes borrowing expensive,” he said.
The three major trade union federations represented at the launch of the declaration were Cosatu, the Federation of Unions of South Africa, and the National Council of Trade Unions.
South African manufacturers that signed the document included ArcelorMittal SA, Consol Glass, Hulamin, Bell Equipment and Altron. — Sapa