The South African Federation of Trade Unions (SAFTU) notes with grave concern the latest data from Statistics South Africa, which confirms the deepening crisis in our manufacturing sector. Manufacturing production fell by 6.3% year-on-year in April 2025, marking six consecutive months of contraction. This confirms what SAFTU has warned repeatedly: our economy is locked into a crisis created by structural failures, neoliberal dogmas, and elite capture.
A NEO-COLONIAL AND EXTRACTIVIST ECONOMIC MODEL
At the heart of this crisis is the continued neo-colonial and extractivist character of the South African economy. We remain locked into a model based on the export of raw minerals and commodities to global markets, while importing finished goods that South African workers should be producing. The wealth extracted from our land and resources leaves our shores while our factories collapse, our communities disintegrate, and millions are left without work.
There has been no serious programme of industrialisation, beneficiation, or economic diversification to break from this colonial legacy. Instead, successive governments have deepened dependence on multinational corporations, allowed foreign capital to dominate key sectors, and opened domestic markets to cheap imports that have destroyed local industries.
THE INVESTMENT STRIKE: PRIVATE AND PUBLIC
While workers are losing jobs and families are plunged into poverty, the private sector continues to sit on more than R1 trillion in idle cash reserves, refusing to invest in new industries, factories, or job creation. This is not a failure of profitability — corporations continue to report large profits — but a refusal to invest in productive sectors that serve national development.
At the same time, public sector investment has collapsed, with government failing to meet its own infrastructure investment targets. The supposed R1 trillion infrastructure programme remains largely on paper, blocked by austerity, weak state capacity, and political paralysis.
INAPPROPRIATE FISCAL AND MONETARY POLICIES
South Africa’s fiscal and monetary policy frameworks continue to deepen the crisis. Austerity budgets slash critical public spending, freeze public service posts, and undermine public sector wages. Meanwhile, high interest rates, maintained in the name of inflation targeting, choke off household spending, suppress industrial borrowing, and feed the profit margins of commercial banks and speculators.
This policy regime serves financial markets, credit rating agencies and global investors — not the working people of this country.
MASSIVE CAPITAL FLIGHT, LOOTING AND CORRUPTION
Adding to this disaster is the systematic looting of public resources through state capture, procurement corruption, and massive illicit capital outflows. It is estimated that trillions of rands have been stolen or illegally transferred out of the country, draining desperately needed resources that could have been used to finance industrialisation, infrastructure, job creation and service delivery.
Instead of recovering these stolen funds, the government continues to plead for foreign loans while cutting public services at home.
THE HUMAN COST: UNEMPLOYMENT, POVERTY AND INEQUALITY
The real measure of this failure lies in its devastating human impact:
• Expanded unemployment now stands at 43.1%, meaning nearly half of working-age South Africans are out of work when discouraged jobseekers are included.
• Youth unemployment remains catastrophic, with over 60% of young people excluded from work or education opportunities.
• Poverty and inequality have reached crisis levels, with millions trapped in hunger, informal housing, insecure jobs, and debt traps while a tiny elite enjoys obscene wealth.
The manufacturing collapse is not just a sectoral issue — it is a reflection of a deeper systemic failure that condemns millions to lives of permanent economic exclusion.
SAFTU’S ALTERNATIVE PATHWAY
SAFTU repeats its urgent call for a fundamental break with the failed neoliberal order:
- Break the neo-colonial economic structure by rebuilding national industrial capacity, local manufacturing, beneficiation, and food sovereignty.
- End the private and public investment strike: redirect hoarded private capital and unlock public investment into job-creating sectors.
- Abandon austerity: expand public spending on infrastructure, services, education, and industrial policy.
- Transform monetary policy: lower interest rates to support industrial credit, job creation and economic expansion.
- Recover stolen wealth: launch serious investigations, asset recovery processes, and crackdowns on illicit financial flows.
- Launch a mass job creation programme rooted in reindustrialisation, green energy, agro-processing, infrastructure renewal, public services, and cooperatives — placing the working class at the centre.
This is not simply an economic crisis — it is a political and moral crisis. The current path leads only to deepening poverty, permanent unemployment, violent inequality and social collapse. We say enough is enough. South Africa’s economy must serve its people — not foreign capital, monopolies, or corrupt elites.
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
