South African News Update: Cosatu Set to Shut Down Three Provinces Over Price Hikes; ANC Makes Changes

South African public sector workers during the strike in 2007. The COSATU trade union federation is set to demonstrate again over the current energy crisis in the country.
Originally uploaded by Pan-African News Wire File Photos

Cosatu expects to 'shut down' three provinces

BLOEMFONTEIN, SOUTH AFRICA Jul 15 2008 16:32

The Congress of South African Trade Unions (Cosatu) is expecting a total shutdown of business in the Free State, Mpumalanga and Northern Cape during the second round of its planned protests against spiralling electricity, food, and fuel costs.

Cosatu's provincial secretary in the Free State, Sam Mashinini, said on Tuesday that its officials expect "thousands and thousands" of workers and community members to participate in the Bloemfontein protest march on Wednesday

"We expect a total shutdown tomorrow [Wednesday]," he said.

Protest marches are planned for Bloemfontein, Kimberley and other towns in the Northern Cape and various places in Mpumalanga.

The protests, along with a call for a day-long general work stayaway, are mainly against the cost of electricity, which has increased up to 27% in recent months.

"This will put more strain on the income of the poor households," said Mashinini.

He said many workers and communities cannot pay the new prices.

"There are many signs that families cannot handle the high increases. If you go inside Bloemfontein, you would realise that poor families send their children to school without taking something to eat in the morning."

Mashinini said Cosatu has already urged its members to tighten their belts. "The belt we have asked them to tighten has been tightened up to the buckle."

He said Wednesday's action is a legal strike, protected by the Labour Relations Act, adding that no one may be victimised or harassed for taking part in such an action.

In Bloemfontein, Cosatu is expected to march to the office of Premier Beatrice Marshoff to hand over a memorandum. In Kimberley, two memorandums will be handed over to officials of the government and Eskom.

Mashinini said the intention is to put pressure on the government and Eskom to review the recent increases. "We want an assurance that there would be no new increases in future to pay for the blunders and sloppiness of the two in failing to actively do their duties which they were deployed to."

More protests are planned for July 23 in Gauteng, the Eastern Cape, Limpopo and North West, while a "national strike and stayaway" for all provinces is planned for August 6. -- Sapa

Source: Mail & Guardian Online
Web Address: http://www.mg.co.za/article/2008-07-15-cosatu-expects-to-shut-down-three-provinces


COSATU Strike action on the electricity crisis, Mpumalanga, Free State, Nothern Cape

14-07-08

Media alert
More strike action on the electricity crisis
Mpumalanga, Free State and Northern Cape

16 July 2008

On Wednesday 16 July 2008 the Congress of South African Trade Unions will continue with its strike action and demonstrations on the issue of the electricity crisis in South Africa, in Mpumalanga, Free State and Northern Cape. Full details of the activities are listed below.

The strike action is in accordance with COSATU's Notice under Section 77 (1) (b) of the Labour Relations Act, dated 13 March 2008, in response to the danger of retrenchments in the mining sector and elsewhere due to Eskom's decision to reduce electricity supply to industry and its threat to oppose any new major construction initiatives.

COSATU is further concerned that Eskom's 27.5% tariff increase, which municipalities can increase still further, will put thousands more jobs at risk, as companies, already facing massive increases in the cost of fuel and interest rates, try to balance their books by retrenching workers, or may be forced to close down.

COSATU acknowledges that the current power-cuts and power shortages constitute a national crisis which affects all South Africans. We will work actively and constructively to help manage the power-shortage and to find a lasting solution, but are adamant that workers should not be asked to pay for government's failure to invest in electricity in the late 1990s, as a result of its plans to privatise Eskom and do nothing when it was warned about the amount of investment that would be required to meet the expected rise in demand for power in the future.

Workers can rest assured that all those who participate in the strike will be protected by law and cannot legally be victimised or punished, except for those performing genuinely essential services and who do essential maintenance work.

The action will then continue on 23 July 2008 in Gauteng, Eastern Cape, North West and Limpopo and culminate in a national strike on 6 August.

Deployment for 16 July Provincial Strikes

Province
Venue and activity: All starting at 10h00
Contact
Main speaker

1. Mpumalanga

Nelspruit: gather outside showground March to Eskom
Mapetla Mashele
078 323 0735
Thobile Ntola, SADTU Deputy President

Witbank: gather at Broadway garage parking
March to Eskom
Leah Khoza
076 842 5795
Sidumo Dlamini, COSATU President

Secunda: gather at open space next to Secunda Graveyard. March to Police Station where employers will receive memorandum

Petros Sehlabela
076 051 1908
Welile Nolingo, CEPPWAWU General Secretary

Kwa Mhlanga: gather at Kwaggafontein Hall

March to Kwagga-plaza Shoprite
Issy Thwala
082 885 5949
013 947 3079
Bones Skulu, SACCAWU General Secretary

Bushbuckridge: gather at Twincity Complex
March to Police Station
Pretty Makhubedu
072 212 4090
Abbey Witbooi, POPCRU General Secretary

Ermelo: gather at Mpumalanga Stadium
March to Checkers Mall
Ellias Shabangu
082 974 6480
Mabutho Sithole, CWUSA President

Nkomazi: gather at Old Taxi Rank
March to Civic Old Taxi Rank to Civic Centre
James Mhlabane
082 372 6653
Lulamile Sotaka, NEHAWU First Deputy President

2. Free State

Bloemfontein: gather at Pax Nova Maguang
March to the Premiers Office in Saint Andrews Street
Sam Mashinini
082 563 6955
Bheki Ntshalintshali, COSATU Deputy General Secretary

3. Northern Cape

Kimberley: gather at Open Air Arena
March to Eskom in Saint George Street and to National Institute of Higher Learning
William Sikali
082 491 1591
Zwelinzima Vavi, COSATU General Secretary
De Aar: Details to follow
Ntamehlo
083 294 0237
Keith Jacobs, CEPPWAWU Deputy General Secretary
Upington: Details to follow
Joyce Muller
076 416 5446
Derrick Elbrecht, NUM National Treasurer
Kuruman: Stayaway, Details to follow
Patrick Mngoma
082 484 6751
Daniel Van Wyk, PAWUSA General Secretary

Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
1-5 Leyds Cnr Biccard Streets
Braamfontein, 2017
P.O. Box 1019
Johannesburg, 2000
SOUTH AFRICA
Tel: +27 11 339-4911/24
Fax: +27 11 339-5080/6940/ 086 603 9667
Cell: 0828217456
E-Mail: patrick@cosatu.org.za


OECD report frankly assesses SA's problems

EVAN PICKWORTH
JOHANNESBURG, SOUTH AFRICA
Jul 15 2008 17:17

The Organisation for Economic Cooperation and Development's (OECD) secretary general, Angel Gurria, said on Tuesday that in the coming years the OECD will seek active dialogue with South Africa as an enhanced engagement partner.

Part of this, he said, will be challenging the country if it ever becomes too complacent but is being left behind by other growing countries.

He said the engagement will also entail drawing on the OECD's experience and allowing South Africa to share its own valuable experience.

"You can be proud of some major achievements, but it is good if we come here and tell you what everybody else is doing. Nobody knows what's good for South Africa better than South Africans, but it is good to also tell you what others are doing.

"For example, while you may be moving fast, we can come and tell you others are moving faster and you may be getting left behind. This is the service we provide to our partners," he said.

He said South Africa's labour force had enormous potential, but key policy changes -- such as the implementation of policies involving the Accelerated and Shared Growth Initiative for South Africa (Asgisa), noted constraints and less protectionism in certain industries -- are needed to unlock this potential.

He was speaking at the launch of a key OECD report on South Africa that calls for broader-based growth, with the event hosted by South Africa's Finance Minister, Trevor Manuel.

The report is the first assessment of South Africa by the OECD and studies reforms needed to create jobs, tackle poverty and allow growth to catch up with the most dynamic emerging economies.

South Africa is currently not a member of the OECD, but is among the five countries offered enhanced engagement with a view to having an opportunity to work more closely with the group of 30 countries committed to democracy and the market economy.

The release of this report is seen as a major step for South Africa on the road to becoming a fully fledged member of the OECD.

South Africa has a strong partnership with the OECD, Manuel said on Tuesday.

"South Africa has benefited from OECD policy inputs on competition policies and practices, technology and innovation, tax policy and administration and agriculture," he said.

Gurria congratulated Manuel on stabilising public finances, but said that challenges for South Africa remain. "The people who were supposed to benefit most from democracy are still lagging behind."

He also referred to South Africa's high rate of unemployment and said that part of the gap between per capita income between South Africa and the OECD countries is due to labour productivity.

The report
The OECD report says that monetary policy in South Africa has been effective and credible -- even if it is now under strain.

"As was the case for many other countries adopting inflation targeting in the past two decades, the early experience was broadly positive," the report says.

However, initial progress in reducing South Africa's inflation was temporarily unwound by the emerging-market crisis of 2001.

Despite this, inflation in South Africa on the targeted CPIX measure declined from about 7% prior to the introduction of the new monetary policy regime to just more than 3% in early 2005 -- and expectations quickly converged to the South African Reserve Bank's (SARB) target zone.

Recently, however, the increase in world food and fuel prices "posed a stern challenge to the SARB, as it has to many other inflation-targeting banks", the report says.

Despite a series of rate hikes from mid-2006 to June 2008, inflation has continued to rise in South Africa, driven by increases in food and energy prices.

"The SARB itself, in its June 2008 monetary policy statement, pushed back the expected horizon for getting inflation back into the target band to the third quarter of 2010," the report says. The worsening in expectations shows recognition that significant inflationary pressures remain in the pipeline.

Growth rate
South Africa's growth rate trails those of the most dynamic emerging economies such as Indonesia, Chile, India, Russia and China, according to the report.

Moreover, the faster rate of growth in the past four years has been accompanied by only a modest decline in unemployment. The government's development strategy, Asgisa, foresees further increases in growth rates to an average of 6% a year between 2010 and 2014 in order to halve unemployment and poverty.

"The most disappointing aspect of post-apartheid economic performance is the emergence and persistence of extreme levels of unemployment, particularly for less-skilled younger blacks, together with the continuation of widespread poverty."

The failure to bring unemployment down decisively is probably "the greatest source of popular discontent" about the government's economic policies. The report says that this is recognised by the government, which aims to promote more employment-intensive growth.

The economy is rightly seen as suffering from a shortage of skilled labour, reads the report. Also, there are high barriers to entry and low competition in some sectors of the economy.

The report concludes that while the policy interventions set out by Asgisa are each aimed at addressing one or more of the constraints identified, in some cases the linkage between the constraint and the policy solution is weak. In others the policy action looks insufficiently strong to remove the constraint to faster and evenly shared growth.

Electricity
Power shortages are a pressing economic problem for South Africa and threaten near-term growth prospects, the report also says.

"The loss of output in the first quarter, together with the prospect of extended power shortages and outages at least during the rest of 2008, has led economic forecasters to revise down their projections for real GDP growth this year by between 0,5 and one percentage point," it says. This has been "a blow" to financial market sentiment towards South Africa.

The government is "preparing" the population for the prospect of substantially higher electricity prices, the report says. An initial price increase of 14,2% will not be enough to cover the long-run costs of electricity production.

The National Energy Regulator of South Africa has awarded a further increase of 13,3% -- but it has warned that annual increases of 20% to 25% a re expected for the next three financial years.

Unemployment
On unemployment, the OECD report says that some aspects of South Africa's unemployment problem are clearly related to legacies of the apartheid era.

"Under apartheid, the education system was not designed to provide the majority black population with the human capital necessary to perform skilled work," it says.

Although access to schooling for black people has "commendably been increased" and public financing per pupil largely has been equalised across the school system, serious defects remain -- "which continue to impede the opportunities of historically disadvantaged groups".

The report says that little has been done "to unwind the spatial misallocation of workers" and, despite improvements, "the marks of the homeland and township system remain visible in present settlement patterns".

The long distances travelled in commuting and job searching raise reservation wages and depress search activity.

Another negative aspect of apartheid not fully addressed is the suppression of entrepreneurial initiative among the majority black population, the report says.

"In the formal sector, the attractiveness for skilled blacks of affirmative-action positions in existing corporations under the BEE [black economic empowerment] initiative hinders the creation of new small black-owned businesses."

Meanwhile, the informal sector remains small for an economy of South Africa's average income level and has absorbed surprisingly little of the surge in the supply of less-skilled labour.

Education
There are also doubts about the quality of education being provided to the majority of students in South Africa, the report says. In international tests of literacy and maths and science learning since the late 1990s, average scores for South Africa have "trailed the pack".

In the crucial areas of maths and science, the government has set itself ambitious goals for increasing exam pass rates, "but the goals are not being met". The number of passes even fell between 2005 and 2006, according to the report.

The poor results in the post-apartheid era may be a by-product of the "understandable effort to make the system more democratic", the OECD says.

One factor is the expansion in the number of teachers to deliver greater access to schooling for black children. "The certification of a large number of teachers appears to have been associated with a relaxation of standards, given the shortage of experienced and well-qualified teachers."

There have also been efforts to encourage white teachers to quit or retire to rebalance the teaching corps -- "which worsened the shortage of trained teachers", the report adds.

And in spite of the acute shortage of well-trained teachers, anecdotal evidence suggests that it can be difficult for qualified teachers from abroad to obtain working visas for South Africa.

Other problems in the education system include a shortage of texts and basic infrastructure, teacher absenteeism, the impact of HIV/Aids and "the continued disparity between the former white schools and others, especially the former black schools", the report says. -- I-Net Bridge, Sapa

Source: Mail & Guardian Online
Web Address: http://www.mg.co.za/article/2008-07-15-oecd-report-frankly-assesses-sas-problems


'No one in the ANC is permanent'

MATUMA LETSOALO, MANDY ROSSOUW AND ZODIDI MHLANA

JOHANNESBURG, SOUTH AFRICA - Jul 15 2008 12:30

Fear and insecurity over what decision Luthuli House will take on the troubled government of the Eastern Cape last week led to jostling among provincial ANC leaders and the release of an explosive report implicating Sports Minister Makhenkesi Stofile and two senior ANC executive members in a R200-million scam.

The leaking of extracts from the report of the Pillay commission into corruption and maladministration, which Premier Nosimo Balindlela has been sitting on for more than two years, came two days before the ANC's national executive committee was to decide Balindlela's fate.

The leaked portion of the report alleges that Stofile, Enoch Godongwana, Mcebisi Jonas and ANC provincial chairperson and former education minister Stone Sizani were involved in corruption on a massive scale.

A provincial government official told the Mail & Guardian that the report was being leaked to prevent Balindlela being ousted from her position.

'The premier has been under pressure from people who are implicated in the report, especially Godongwana and Sizani, so the timing was right to leak the report. We are just clearing the air. They knew that the report was going to expose them. Now that we have leaked the report they don't stand any chance. All they want is to see her go."

The report alleges that Stofile as former provincial premier, Godongwana as former finance minister and Sizani as former education minister benefited from government contracts valued at close to R200-million.

It accuses them of awarding contracts to companies linked to their partners and relatives. It also says how wives and relatives of the three leaders got loans from provincial government institutions, which were later written off without any attempts to recover the outstanding balances.

The irregular transactions recorded in the report include:

Stofile in his capacity as premier authorised payments of R760 000 to two entities linked to his wife;

A company in which Sizani was a shareholder was awarded a R157-million contract by the provincial government;

A company belonging to Sizani's wife received a R50 000 loan from the provincial government which was later written off;

A loan of R900 000 was irregularly granted to Stofile to build a Spar in Alice, which was later written off by the provincial government;

Godongwana's wife Tandi was awarded a R15,7-million contract; and

An entity linked to Godongwana's sister was given an amount of R177 000 by the provincial government.

Sizani and Godongwana told the Daily Dispatch that the Pillay commission was a political ploy to discredit them.

"The timing of the release of this report is also strange," Godongwana reportedly said.

The ANC's national working committee is believed to have recommended the removal of Balindlela for her lack of leadership in resolving perennial poor governance and service delivery.

The Eastern Cape, one of the poorest provinces in the country, has for years been plagued by incidents of financial mismanagement, corruption and poor corporate governance, which impacted on service delivery.

Balindlela had apparently failed to convince the ANC leadership, including party president Jacob Zuma and secretary general Gwede Mantashe, during their recent visit to the province that all was well.

The ANC's national working committee recently held a meeting in the province, where it met with both the ANC and the Eastern Cape government to understand the nature of the problem.

The ANC's alliance partners -- Cosatu and the SACP have, on several occasions. called for Balindlela's dismissal.

However, the ANC in the province believes removing her now would cause unnecessary instability months before elections.

Balindlela and her supporters believe the plan to fire her is part of an orchestrated attempt by Zuma supporters to get rid of all those who supported Mbeki in his bid to be re-elected ANC president last year.

Stofile, they say, is one of the ANC leaders who have been pushing hard for her replacement.

He is currently the convener of ANC deployees in the Eastern Cape and it is said by party insiders that he has tried to convince the NEC at previous meetings to force the province to go to an early conference.

Among those touted by Cosatu, the youth league and the SACP as replacements for Balindlela are: former Eastern Cape Development Corporation chief Jonas, former provincial finance minister Godongwana and SACP provincial chairperson and former public works provincial minister Phumulo Masualle.

But the provincial leadership will probably recommend provincial deputy chair and MEC for economic development and environmental affairs Mbulelo Sogoni. He is the highest ranking provincial serving in government.

The leadership in the Eastern Cape will meet on Monday to decide on how to deal with the situation should Balindlela get the chop.

Youth league deputy president Andile Lungisa says Balindlela must go because of the poor service delivery and administration in the province.

"No one in the ANC is permanent. People move all over the show 24 hours a day. There can be changes any time."

Source: Mail & Guardian Online
Web Address: http://www.mg.co.za/article/2008-07-16-no-one-in-the-anc-is-permanent


Still no word from ANC on axing of premiers

JOHANNESBURG, SOUTH AFRICA Jul 15 2008 15:17

The African National Congress (ANC) retracted a statement on Tuesday that it would make an announcement on the reported axing of two premiers.

It said it could no longer indicate when a statement would be released -- despite its Western Cape spokesperson Garth Strachan telling the South African Broadcasting Corporation (SABC) on Tuesday morning that Premier Ebrahim Rasool would be asked to resign.

"Our processes are still ongoing," said national ANC spokesperson Jessie Duarte, who earlier had said a statement would be released on Tuesday. "I can give no time frame at all as to when we will be able to make a statement ... We are discussing the situation in the two provinces and we will initiate communications."

"The media are talking about premiers, not us," Duarte added.

The Sunday Times reported at the weekend that the ANC national executive committee (NEC) had decided to sack the Eastern Cape and Western Cape premiers with immediate effect.

The decision to axe Rasool and Nosimo Balindlela was taken at the party's NEC meeting in Gauteng as the ANC battled to contain chaos in its structures across the country ahead of next year's general elections.

The SABC reported on Tuesday that the decision to ask Rasool to resign was taken after a meeting of senior ANC national leaders with members of the provincial executive committee in Cape Town on Monday.

The provincial leadership had been informed that Rasool would be asked to resign in the interest of the organisation, to allow the ANC to best prepare for the forthcoming elections.

His successor would be identified after following the necessary procedures, the report said.

Meanwhile, the Eastern Cape's Herald newspaper, quoting unnamed sources, reported that the province's premier, currently in China, would also be axed on Tuesday.

It added that provincial education minister Johnny Makgato and finance minister Billy Nel were expected to be "redeployed", while health minister Nomsa Jajula's job was on the line.

The newspaper's source said President Thabo Mbeki was likely to offer Balindlela a diplomatic posting.

The ANC said on Monday it would be sending officials to the Eastern and Western Cape to address problems there. ANC secretary general Gwede Mantashe said the planned visits followed a report by the NEC.

"We are not going to rush because the media has pre-empted the process," Mantashe told reporters in Johannesburg.

He said that the information contained in media reports "may be a product at the end of that process" but added that the nation is "not going to wake tomorrow without Nosimo or Ebrahim". -- Sapa

Source: Mail & Guardian Online
Web Address: http://www.mg.co.za/article/2008-07-15-still-no-word-from-anc-on-axing-of-premiers