https://www.engineeringnews.co.za
Africa
Africa
africa

South Africa's wage freeze plan hinged on 'difficult' negotiations, says Fitch

29th October 2020

By: Reuters

  

Font size: - +

South Africa's plan to freeze public sector wages, announced by the finance minister in a budget speech, will face opposition from labour unions, ratings firm Fitch said on Thursday.

The success of the plan "will depend crucially on difficult negotiations with public sector trade unions," said Fitch Ratings in a detailed commentary after publishing a brief statement late last night.

Finance Minister Tito Mboweni pledged on Wednesday to freeze the wages of the country's 1.3-million civil servants as part of government's plan to narrow a yawning budget deficit and bring down debt.

Freezing civil servants' salaries will put the governing party on a collision course with its labour union allies. Public sector unions have already taken the government to court for failure to pay wage increases due in April.

"Tensions within the governing African National Congress will also hamper policy-making and exceptionally high inequality raises social pressure for additional spending," Fitch said.

Fitch, which rates South Africa's debt at BB with a negative outlook, added: "Despite the Economic Reconstruction and Recovery Plan released by the president, Cyril Ramaphosa, in mid-October, growth will remain weak."

Treasury cut its growth forecasts for 2020 to a 7.8% contraction, while the budget deficit is seen widening to 15.7% of GDP.

Edited by Reuters

Comments

Showroom

Rittal
Rittal

Rittal is a world leading provider of top-quality integrated systems for enclosures, power distribution, climate control, IT infrastructure and...

VISIT SHOWROOM 
Schauenburg SmartMine IoT
Schauenburg SmartMine IoT

SmartMine IoT has been developed with the mining industry in mind, to provides our customers with powerful business intelligence and data modelling...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 10 May 2024
Magazine round up | 10 May 2024
10th May 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.228 0.283s - 138pq - 2rq
Subscribe Now