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

Beloved Lion Killing Sparks Virtual, Real Life Outrage

Twitter, as usual, was epicenter for anger directed at Palmer, with some questioning his manhood, calling for him to be released into the wild More

Video Booming London Property Market a Haven for Dirty Money

Billions of dollars from proceeds of crime, especially from Russia, being laundered through London property market, according to anti-corruption activists More

Video Scouts' Decision on Gays Meets Acceptance in Founder's Hometown

One former Scout leader thinks organization will move past political, social debate, get back to its primary focus of turning boys into good citizens More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Booming London Property a ‘Haven for Dirty Money’i
X
July 29, 2015 9:34 PM
Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Scouts' Decision on Gays Meets Acceptance in Founder's Hometown

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.
Video

Video 'Metal Muscles' Flex a New Bionic Hand

Artificial limbs, including the most complex of them – the human hand – are getting more life-like and useful due to constant advances in tiny hydraulic, pneumatic and electric motors called actuators. But now, as VOA’s George Putic reports, scientists in Germany say the future of the prosthetic hand may lie not in motors but in wires that can ‘remember’ their shape.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video 'Positive Atmosphere' Points Toward TPP Trade Deal in Hawaii

Talks on a major new trade agreement among 12 Pacific Rim nations are said to be nearing completion in Hawaii. Some trade experts say the "positive atmosphere" at the discussions could mean a deal is within reach, but there is still hard bargaining to be done over many issues and products, including U.S. drugs and Japanese rice. VOA's Jim Randle reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.
Video

Video Racially Diverse Spider-Man Takes Center Stage

Whether it’s in a comic book or on the big screen, fans have always known the man behind the Spider-Man mask as Peter Parker. But that is changing, at least in the comic book world. Marvel Comics announced that a character called Miles Morales will replace Peter Parker as Spider-Man in a new comic book series. He is half Latino, half African American, and he is quite popular among comic book fans. Correspondent Elizabeth Lee reports from Los Angeles.
Video

Video Historic Symbol Is Theme of Vibrant New Show

A new exhibit in Washington is paying tribute to the American flag with a wide and eclectic selection of artwork that uses the historic symbol as its central theme. VOA’s Julie Taboh was at the DC Chamber of Commerce for the show’s opening.

VOA Blogs