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

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Islamic State Prisoners Talk of Curiosity, God, Regreti
X
Zana Omer
March 28, 2015 1:19 AM
The 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 Islamic State Prisoners Talk of Curiosity, God, Regret

The 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 Hi-tech Motorbike Helmet's Goal: Improve Road Safety

In cities with heavily congested traffic, people can get around much faster on a motorcycle than in a car. But a rider who is not sure of his route may have to stop to look at the map or consult a GPS. A Russian start-up company is working to make navigation easier for motorcyclists. Designers at Moscow-based LiveMap are developing a smart helmet with a built-in navigation system, head-mounted display and voice recognition. Zlatica Hoke has more.
Video

Video New Wheelchair Is Easier to Use, Increases Mobility

Traditional push-rim wheelchairs create a lot of stress for arm, shoulder and neck muscles and joints. A redesigned chair, based on readily available bicycle technology, radically increases mobility while reducing the physical effort. VOA’s George Putic 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.
Video

Video Virginia Tavern Takes Patrons Back to Medieval Times

European martial arts are not widely practiced and are unknown by most people. A tavern in Old Town Alexandria, outside Washington, wants to change this by promoting these fighting techniques from medieval times. Through combining visual arts, martial arts and culinary arts, this tavern brings medieval history back to life. VOA's Yang Lin and Helen Wu report.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.

All About America

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