Johannesburg, South Africa — MININGREVIEW.COM — 05 June 2009 – The National Union of Metalworkers of South Africa (NUMSA) – an affiliate of South African labour confederation COSATU – has threatened mass strikes to press for steeper rate reductions because recession is forcing companies to scale down operations in Africa’s biggest economy.
“We fully endorse that we must engage in mass action,” COSATU General Secretary Zwelinzima Vavi told reporters. The unions have not set any date for possible strike action.
The central bank’s monetary policy committee cut the key repo rate by 100 basis points last week, adding to 350 basis points worth of cuts in a monetary loosening cycle that began in December last year. COSATU, which has criticised inflation-targeting, had demanded a 200 basis point cut at last week’s policy meeting.
The metalworkers’ union, which says it has more than 260 000 members and is one of the country’s three biggest, staged a protest at the Reserve Bank prior to the rates decision, and criticised Reserve Bank governor Tito Mboweni’s refusal to accept a petition.
COSATU said it would not support the renewal of the central bank governor’s contract, which expires in August “We need change there at the Reserve Bank," said COSATU President S’Dumo Dlamini.
Markets and investors fear powerful unions will influence South Africa’s new President Jacob Zuma from business-friendly policies to more populist ones, like increasing social spending, after they helped him win leadership of both the ruling ANC and the country.