The Congress of South African Trade Unions (COSATU) welcomes the 25 basis points cut to the repo rate by the South African Reserve Bank (SARB). Whilst we had hoped for a more aggressive rate cut of at least 50 basis points by SARB, this will nonetheless provide valuable relief for millions of highly indebted workers. It will inject important cash into an economy that has been struggling to grow.
As inflation has fallen well below the SARB’s target range and stagnant economic growth continues to shed jobs, COSATU expects further and much more aggressive repo rate cuts over the course of 2025.
Talk of reducing the inflation target by half is premature when unemployment remains at a staggering 43.1% and rising.
Whilst appreciating this relief for workers, it is critical government move with speed to cushion workers from the rising costs of living and give more impetus to a weak economy. Key interventions needed include:
- Supporting Eskom to provide reliable and affordable electricity;
- Ensuring indigent households receive their free electricity and water allocations, as well as to increase these;
- Boosting efforts to return Transnet and Metro Rail to full capacity to shield food and commuters from inflation;
- Reviewing and reducing the taxes that consume a third of the fuel price,
- Adjusting the SRD Grant for value lost to inflationary erosion;
- Drastically expanding public employment programmes to provide a pathway to permanent jobs for the 12 million unemployed;
- Ensuring the bold infrastructure programme is spent timeously and efficiently; and
- Mobilising greater public and private investments for the SMME, industrial and export sectors.
COSATU will continue to push government led by the African National Congress and the private sector, on the need for such critical interventions, as well as a bold and progressive Marshall Plan to capacitate the state, grow the economy, create jobs and provide relief for the poor and unemployed. Whilst repo rate cuts are important, the economy needs much more decisive relief to turn South Africa around.
Issued by COSATU
Matthew Parks (COSATU Parliamentary Coordinator)
Cell: 082 785 0687
Email: matthew@cosatu.org.za