The South African Federation of Trade Unions (SAFTU) notes the upcoming Monetary Policy Committee (MPC) meeting scheduled for 20 March 2025 and calls on the South African Reserve Bank (SARB) to immediately abandon restrictive monetary policies that have strangled economic growth and deepened the crisis of unemployment, poverty, and inequality.
A Stagnant Economy in Crisis
The latest Gross Domestic Product (GDP) figures confirm what SAFTU has long warned: South Africa’s economy is in a deep state of stagnation due to a combination of restrictive monetary policies and brutal austerity measures. Decades of high interest rates and neoliberal fiscal policies have collapsed investment, while deindustrialization has gutted our economy.
- The manufacturing sector—once a cornerstone of the economy—has plummeted from contributing 22% of GDP to a mere 11–12%.
- Unemployment remains at crisis levels, with over 12 million people jobless and many discouraged workers no longer counted in official statistics.
- Poverty and inequality are deepening, with wage earners struggling under the weight of soaring food, energy, and transport costs.
- Industrial capacity sits idle, while high borrowing costs make expansion impossible for local industries.
Despite these glaring crises, the MPC has continuously prioritized inflation targeting over job creation and economic growth, refusing to acknowledge that its high interest rate regime is strangling economic activity.
SAFTU’s Expectations of the MPC Meeting
The March 20 MPC meeting must mark a decisive break from this anti-worker economic regime. We demand:
- A reduction in interest rates to spur economic growth.
- The SARB’s tight monetary stance has choked investment and suffocated industrial recovery. Lowering interest rates will provide much-needed relief for businesses, workers, and households struggling under excessive debt burdens.
- A shift away from inflation targeting towards full employment and economic development.
- The SARB’s obsession with keeping inflation within a rigid 3–6% target range has come at the cost of economic collapse. SAFTU calls for a people-centered monetary policy that prioritizes job creation and industrial development.
- An expansionary approach to stimulate industrial production.
- South Africa’s manufacturing sector is in free fall, worsened by the government’s own austerity policies and restrictive credit environment. We need investment in infrastructure, incentives for industrialization, and an end to policies that favor financial speculation over productive industries.
- Urgent intervention to reverse mass unemployment.
- SAFTU calls for a national employment strategy that ties monetary policy to a broader industrialization plan, ensuring job creation through state-led investment and local industry support.
The Failure of Neoliberalism
For decades, South African economic policy has favored financial markets over real economic growth. SARB’s rigid stance on monetary policy has:
- Made borrowing more expensive for businesses, killing investment.
- Deepened financialization, where speculation flourishes while production declines.
- Blocked access to affordable credit, worsening inequality.
South Africa needs a fundamental shift in economic policy. We cannot afford more of the same.
A Call to Action
SAFTU will mobilize workers and communities against economic policies that continue to drive job losses and deepen the cost-of-living crisis. We will not stand by while financial elites dictate policies that serve their profits at the expense of workers.
We demand a decisive break from neoliberalism and call on the government to implement a progressive economic agenda centred on jobs, industrial expansion, and economic sovereignty.
SAFTU urges the MPC to take bold steps towards economic recovery and worker-centred development. The time for hesitation is over.
For a working-class alternative, for a people-first economy!
A Statement was issued on behalf of SAFTU by General Secretary Zwelinzima Vavi.
For more details, contact the National Spokesperson at:
Newton Masuku
066 168 2157
Newtonm@saftu.org.za
