Trade union Cosatu has had a direct and indirect role in the destruction of an estimated one-million jobs in the South African economy over the last five years, says economic adviser to PwC Roelof Botha.

The economist says Cosatu – “a dangerous organisation” – achieved this through a combination of unrealistic minimum wage demands, the violent nature of labour action and the resultant growing shift by the production and manufacturing sectors to automation.

“Factories will typically decide to use a machine requiring fewer operators in an effort to reduce their workforce,” says Botha.

He believes the mining sector has not been an employment generator in recent years, as it has failed to recover since the recession, with this sector set to increasingly move towards automated mining techniques as strikes in the sector continue.

Botha says it is a fallacy that wages in South Africa are low, as they are three times higher than the average wage in sub-Saharan Africa.

He says one of the biggest success stories of South Africa, in turn, has been that the gross national income per capita has increased 40%, in real terms and inflation adjusted, to R60 000, in 2013, from 1997.

He adds that basic income grants are the best way to combat poverty in South Africa.

Botha believes the biggest challenge for the South African economy in 2015 will not be electricity, or the lack thereof, but rather skills shortages, especially at government level.

One solution is to second professionals from the private sector to municipalities to solve the multitude of dysfunctionalities that exists at local government level, he says.

Botha expects South Africa’s gross domestic product (GDP) growth to reach 4% next year.

The interest rate may move another 0.5% this year, but he is positive it could remain at the current level in 2014 and 2015.

The rand is likely to remain stable against the dollar this year, at R10.40 to R10.60, notes Botha.

He adds that it is myth that the rand is weak, quipping that the media creates the impression that the currency “is on par with the Zim dollar”.

The rand is indeed weaker than it was, says Botha, but, should one factor out inflation, the rand is as strong as it was in 2001.

Botha believes the rand has been overvalued during and after the recession.

“The rand is not [currently] weak in real terms.”

Botha also targets the media for its “hysteria” over urban tolling, or the implementation of the ‘user pays’ principle, on Gauteng’s freeways.

He says this principle is the “only way” to fund new urban highways in South Africa.

Gauteng Africa’s Singapore
There is nothing negative about Nigeria over-taking South Africa as Africa’s biggest economy, says Botha. The same is true for the high GDP growth achieved in the economies around South Africa.

“What is good for Africa is good for South Africa.”

Botha says Gauteng remains a central point of convergence in Africa, with Africans coming to Gauteng for shopping and medical procedures.

“Gauteng is becoming Africa’s Singapore.”

Botha also disputes the opinion held by some commentators that South Africa can soon expect its own Arab Spring.

He believes these Middle-Eastern and North African uprisings were the result of people seeking freedoms that are enshrined and protected in South Africa’s Constitution, such as freedom of speech, religion and association.

“We have micro problems in South Africa, not macro problems. Our problems can be solved.”