News / Africa

S. Africa Economy Falls in First Quarter

Mine workers sing and dance outside the Lonmin's platinum mine in Marikana near Rustenburg, South Africa, Thursday, Jan. 30, 2014. The Association of Mineworkers and Construction Union (Amcu) on Thursday rejected a 9% wage offer from leading platinum prod
Mine workers sing and dance outside the Lonmin's platinum mine in Marikana near Rustenburg, South Africa, Thursday, Jan. 30, 2014. The Association of Mineworkers and Construction Union (Amcu) on Thursday rejected a 9% wage offer from leading platinum prod

Multimedia

Audio
Joe DeCapua
South Africa’s economy shrank more than one-half a percent in the first quarter of the year. It’s the worst performance since the global recession five years ago. Most of the decline is blamed on the country’s prolonged platinum mining strike.
 
The decline in South Africa’s economy follows a nearly four-percent growth rate in the last quarter of 2013. However, the platinum mining strike is now in its fifth month. The government has made a new pledge to mediate the labor dispute, saying mining companies “have not done enough to address the well-being of workers.”
 
David Shapiro, a director at Sasfin Securities, said the strike has been a big drag on the economy.
 
“Platinum today is one of our biggest exports. In fact, it certainly exceeds gold. You know, gold production in South Africa has fallen dramatically over the last decade or so. Not for any reasons other than we’ve run out of cheap gold and it’s more difficult to get to the gold. So platinum today is a major mineral export.”
 
He described the strike as a major worry. It’s unclear how quickly the mining sector would bounce back once the strike does end.
 
He said, “When we talk about mines, if you keep them closed for that long there are all kinds of issues even if labor does come back to work. These are deep underground mines and require a lot of attention. So you can’t neglect them. And even if they came back to work it’ll take some time to fire them up again.”
 
Local economies are formed where mines are located.
 
“People live around the mines and of course they earn their income there. The go out and spend it either on entertainment or they buy groceries. So every industry around the mine also starts to suffer as a result,” said Shapiro.
 
Many of the miners in South Africa are migrant workers. Mine companies offer them either a housing allowance or actual housing. Shapiro said the decision they make can have long-term financial effects.
 
“A lot of these miners decided to accept a payment, an allowance, instead. And what they did is instead of buying a decent house or renting a decent house, they would send most of the money back home and then rent shacks. And when I say shacks – literally shacks -- living in really dire circumstances, terrible conditions. And that started strike action,” he said.
 
Because of the strike, the miners are not being paid, and are not able to send any money back home. In addition, there are also tensions between trade unions representing the miners. And while miners demand higher wages, demand for platinum is currently down.
 
South Africa’s economy has also been affected by a slowdown in China’s economy. Shapiro said from 2000 to 2010, the country benefitted greatly from China’s expansion and demand for natural resources, such as iron ore, copper and coal.
 
“Now that China is slowing down emerging countries, such as South Africa, which are major exporters of minerals, are also starting to feel the pinch. So, that’s contributed, as well.”
 
Shapiro also said manufacturing in South Africa has declined as it imports cheaper goods. At the same time, families are under greater pressure to pay back loans and have cut back on buying consumer goods.
 
Despite the first quarter’s bad news, the Sasfin Securities director is optimistic. But he said South Africans are looking to the government to tackle some big issues.
 
“We’re a rich economy,” he said, “It’s a problem we can overcome. Yes, we’ve got a lot of people that are unemployed here. That’s a throwback from apartheid. Skills development here is very low. But it’s an economy that is blessed with so many natural resources. We have a massive array of minerals here. We have natural beauty, which should attract tourism. It’s a country that should be flourishing. We shouldn’t be where we are.”
 
Three mining companies are negotiating with AMCU, the Association of Mineworkers and Construction Union. However, little progress has been made so far regarding a pay hike.

You May Like

Jihadist Assassin says Goal of Tunisia Murders Was Chaos

Abu Muqatil at-Tunusi’s remarks in a propaganda interview also cast light on attack on Bardo Museum More

Russia Denies License to Tatar-Language TV Station in Crimea

OSCE official says denial shows 'politically selective censorship of free and independent voices in Crimea is continuing' More

Kenyan Startups Tackle Expensive Remittances Through Bitcoin

Some think services could give Western Union a run for its money, though others say it’s still got a long way to go More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Indiana Controversy Highlights Divergent Meanings of Religious Freedomi
X
Jerome Socolovsky
April 01, 2015 1:41 AM
Indiana’s state government has triggered a nationwide controversy by approving a law that critics say is aimed at allowing discrimination against gays and lesbians. The controversy stems from divergent notions of religious freedom in America. VOA's Jerome Socolovsky reports.
Video

Video Indiana Controversy Highlights Divergent Meanings of Religious Freedom

Indiana’s state government has triggered a nationwide controversy by approving a law that critics say is aimed at allowing discrimination against gays and lesbians. The controversy stems from divergent notions of religious freedom in America. VOA's Jerome Socolovsky reports.
Video

Video Nigerians Welcome Buhari's Return to Power

Crowds of jubilant Nigerians nationwide have celebrated the return to power of former military ruler Muhammadu Buhari. The retired army general won this year's presidential election with more than 2 million votes more than incumbent President Goodluck Jonathan. Buhari's supporters hope he can strengthen the country's economy and security once he takes office in late May. Zlatica Hoke has this story.
Video

Video Report: State of Black America a 'Tale of Two Nations'

The National Urban League has described this year's "State of Black America" report as a "tale of two nations." The group's annual report, released earlier this month (March), found that under an equality index African Americans had only 72% parity compared to whites in areas such as education, economics, health, social justice and civic engagement. It’s a gap that educators and students at Brooklyn’s Medgar Evers College are looking to close. VOA's Daniela Schrier reports from the school.
Video

Video Film Tells Story of Musicians in Mali Threatened by Jihadists

At this year's annual South by Southwest film and music festival in Austin, Texas, some musicians from Mali were on hand to promote a film about how their lives were upturned by jihadists who destroyed ancient treasures in the city of Timbuktu and prohibited anyone from playing music under threat of death. As VOA’s Greg Flakus reports from Austin, some are afraid to return to their hometowns even though the jihadists are no longer in control there.
Video

Video Gamma Ray Observatory to Open Soon in Mexico

American and Mexican scientists have completed construction of the world's largest gamma ray observatory, situated high in central Mexico’s Sierra Negra Mountain. The observatory's huge array of water-based detectors will soon start discovering secrets about black holes and supernovas. VOA’s George Putic reports.
Video

Video Ebola Vaccine Trials Underway in West Africa

Ebola has claimed the lives of more than 10,000 people in West Africa. Since last summer, researchers have rushed to get anti-Ebola vaccines into clinical trials. While it's too early to say that any of the potential vaccines work, some scientists say they are seeing strong results from some of the studies. VOA's Carol Pearson reports.
Video

Video Philippines Wants Tourists Spending Money at New Casinos

Tourism is a multi-billion dollar industry in the Philippines. Close to five million foreign visitors traveled there last year, perhaps lured by the country’s tropical beaches. But Jason Strother reports from Manila that the country hopes to entice more travelers to stay indoors and spend money inside new casinos.
Video

Video Civilian Casualties Push Men to Join Rebels in Ukraine

The continued fighting in eastern Ukraine and the shelling of civilian neighborhoods seem to be pushing more men to join the separatist fighters. Many of the new recruits are residents of Ukraine made bitter by new grievances, as well as old. VOA's Patrick Wells reports.
Video

Video Islamic State Prisoners Talk of Curiosity, God, Regret

Islamic State fighter, a prisoner of Kurdish YPG forces, asked his family asking for forgiveness: "I destroyed myself and I destroyed them along with me." The Syrian youth was one of two detainees who spoke to VOA’s Kurdish Service about the path they chose; their names have been changed and identifying details obscured. VOA's Zana Omer reports.
Video

Video Germanwings Findings Raise Issue of Psychological Testing for Pilots

More is being discovered about the co-pilot in the crash of Germanwings Flight 9525 in the French Alps. Investigators say he was hiding a medical condition, raising questions about the mental qualifications of pilots. VOA's Carolyn Presutti reports.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.

VOA Blogs

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More