The South African Federation of Trade Unions (SAFTU) rejects with absolute contempt the claim by the National Treasury that lowering the inflation target to 3% “brings South Africa in line with our peers”. The government wants the nation to swallow the myth that South Africa is a normal upper-middle-income economy, when in reality, we are an international outlier, a country where workers, the unemployed, and the poor are experiencing levels of deprivation unseen anywhere else in our income group. If the government wants to compare “bananas to bananas”, then let us compare them properly, using the same World Bank, ILO, and upper-middle-income benchmarks they claim to follow.
1. On Inequality: South Africa is the Most Unequal Country on Earth
Treasury wants us to believe we are like Thailand, Peru, or Argentina.
But the World Bank’s own data shows:
- South Africa’s Gini coefficient is 63–67, the highest in the world.
- Our “peers” Algeria (28), Thailand (35), Vietnam (36), Peru (42), Argentina (43), Colombia (51), are not even in the same universe.
South Africa is 50% more unequal than the average of upper-middle-income countries’
economies.
This is not convergence with peers; this is social collapse engineered by neoliberalism
austerity.
2. On Poverty: South Africa Has the Highest Poverty Rate of All Its Peers
Using the same World Bank upper-middle-income poverty line of $6.85/day
(PPP):
- South Africa: 61.6% of the population lives in poverty.
- Our peers range between 10% and 36%.
Argentina sits at 9.7%, Thailand at 15.6%, and Vietnam at 22%.
South Africa has more than double the poverty levels of most countries, the Treasury
claims, as “peers”.
Even Stats SA’s own upper-bound poverty line shows that more than half of the
The nation is poor. How dare Treasury pretend this is a normal economy that can survive the hammer of even tighter monetary policy?
3. On Unemployment: South Africa Is Not Just an Outlier – It Is the world leader
According to the ILO and global datasets:
- The global unemployment average is around 5%.
- South Africa’s official unemployment rate is 33.2%, and
- Expanded unemployment is about 43%, affecting nearly 8 million people.
- Within our “peer group”, unemployment ranges from 1% in Thailand to 14% in Colombia.
No other upper-middle-income economy has anything remotely close to these
figures. South Africa has one of the worst or second-worst unemployment rates in the world.
When 43% of the labour force is without work, and millions more are trapped in
precarious, underpaid work, a 3% inflation target is not a policy; it is a death
sentence.
4. Youth Unemployment: A Whole Generation Sacrificed
On NEET (Not in Employment, Education or Training):
- South Africa: 60% of youth aged 15–24.
- Peers: Thailand (5%), Vietnam (7%), Peru (13%), Colombia (26%), Algeria (31%).
South Africa’s youth exclusion is twelve times worse than some peers.
This is not a normal economy; it is a system designed to discard an entire
generation.
5. Treasury’s “Peer Comparison” Is Dishonest, Anti-Worker, and Economically
Illiterate by importing a “normal country” inflation target into an economy with abnormal unemployment, abnormal poverty, and the world’s highest inequality,
The government is:
- Enforcing austerity on a collapsing society
- Bleeding the public service through hiring freezes
- Crushing workers and communities under a high-interest-rate regime
- Killing jobs in manufacturing, mining, retail, and community services
- Blocking growth by strangling demand
- Pretending that poverty, unemployment, and inequality are irrelevant
Treasury wants to claim similarity only on the inflation target, but refuses to admit
South Africa is completely unmatched in its human suffering.
This is not technocracy.
This is class war.
6. SAFTU’s Message: You Cannot Compare Bananas to Bananas When the
Orchard Has Already Burned Down.
South Africa cannot adopt the monetary policy of Thailand or Vietnam while having
Unemployment is six times its level.
We cannot copy Colombia’s inflation target while sitting with double its poverty
rate. We cannot imitate Peru’s central bank when our inequality is uncontested as the
highest in the world. Treasury wants to pretend we live in a “normal economic environment”. Workers know the truth: we live in a manufactured disaster, created by 30 years of neoliberalism, privatisation, and austerity.
7. What SAFTU Demands
SAFTU asserts that real economic alignment with global peers requires:
1. Immediate reversal of the contractionary monetary stance
2. Scrapping the 3% target, and reopening democratic dialogue on a full-
employment-centred macroeconomic framework
3. Ending the Treasury-driven hiring freeze and filling all vacant posts in
health, education, policing, social work, and frontline services
4. Expanding public employment through a job guarantee programme
5. A Universal Basic Income Grant
6. An industrial strategy that rebuilds manufacturing and local production
7. Public ownership, not privatisation, of energy, water, rail, and logistics
8. Tax justice, increase corporate taxes, tax wealth, curb illicit financial flows
9. Austerity must end, for good
These are the policies that normal upper-middle-income countries use to build
employment, reduce poverty, and stabilise their societies.
Treasury’s approach is the opposite: it protects financial markets and punishes the
working class.
Treasury claims that a 3% inflation target will “bring us in line with our peers”.
The data shows the opposite: South Africa is not aligned with its peers on any
social measure that matters for human life.
You cannot cherry-pick inflation and ignore unemployment. You cannot praise a target while people starve. You cannot claim “normality” while sitting at the top of every global index of misery.
SAFTU will not accept a policy regime that normalises mass unemployment and
deepens poverty.
We stand with workers, communities, the unemployed, and young people who refuse
to be sacrificed on the altar of technocratic fantasies. We call on all workers and communities to intensify mobilisation against austerity, the 3% inflation target, and the ongoing attack on public services.
Another economy is possible- but not under this Treasury.
A statement was issued on behalf of SAFTU General Secretary Zwelinzima Vavi.
For Media enquiries, contact the National Spokesperson at:
Newton Masuku at:
078516 4094
Media officer
Asive Dyani
0719019564
