The South African Federation of Trade Unions (SAFTU) strongly condemns today’s decision by the Monetary Policy Committee (MPC) to cut the interest rate by a paltry 25 basis points, and we outright reject their outrageous suggestion that South Africa should consider an even lower inflation target.
This is nothing short of economic sabotage against a country that is already bleeding.
Imported Austerity: A Policy for the Rich, a Disaster for the Poor
The idea of further lowering the inflation target is a neoliberal fantasy imported from the Global North — completely inappropriate and destructive for a developing country like South Africa. We are still battling to bring millions of people into the first and second industrial revolutions, let alone the fourth.
How can we chase lower inflation targets when:
- Thousands of rural communities have no basic roads or reliable transport?
- Clinic access requires walking for hours, and even then, medicine shelves are often empty?
- Children learn in collapsing schools still using deadly pit latrines?
- Unemployment sits at 42.9%, and 62% of South Africans live in poverty?
This obsession with inflation at the expense of development is killing our country.
A Recipe for Permanent Underdevelopment
The MPC’s fixation on inflation and fiscal discipline has become a structural barrier to development. It keeps interest rates high, public debt service costs soaring (R1.2 billion a day), and ensures that investment in infrastructure, services, and jobs is sacrificed on the altar of “price stability.”
This is a policy regime designed for already industrialised countries — not one like ours, which has:
- Massive developmental backlogs
- A fragile and shrinking industrial base
- 22.7 million people unemployed and millions more locked in informal or precarious work
- Public institutions collapsing under austerity
SAFTU’s Message to the Reserve Bank and Treasury: No More Conservatism!
We say no to a lower inflation target. We say no to high interest rates. We say no to imported policies that do not fit our historical and material realities.
SAFTU calls for:
- A comprehensive overhaul of the South African Reserve Bank mandate to include employment creation and developmental objectives
- A clear rejection of any plan to lower the inflation target
- Immediate moves to align monetary policy with the urgent need for public investment, industrialisation, and infrastructure roll-out
- An end to austerity and the mobilisation of domestic resources — including progressive taxation, prescribed assets, and public banking — to build an economy for the many, not the few
Conclusion: People Before Inflation Targets
South Africa will never overcome poverty, inequality, and unemployment through elite economic conservatism. The time has come for a worker-led alternative — one that puts people before profits, jobs before inflation targets, and development before debt repayments.
We will continue to mobilise against policies that entrench suffering and stand in the way of a dignified life for all.
Statement issued on behalf of SAFTU by the General Secretary, Zwelinzima Vavi.
For more details, contact the National Spokesperson at:
Newton Masuku
066 168 2157
Newtonm@saftu.org.za
