The South African Reserve Bank (SARB) should seriously consider lowering the repo rate to stimulate our flagging economy.

If Moody’s acts on its threat to cut the already low credit rating of South African resources groups if the new Mining Charter is implemented, the mining industry will bear the brunt, and likewise the thousands of workers whose jobs will be in jeopardy.

A one-notch downgrade would leave only leave miner South32 above junk status, while AngloGold Ashanti, Anglo American, Gold Fields, Sibanye and Petra Diamonds would eat dust.

Yesterday’s news that there were more than 17 million South Africans dependent on monthly social grants compared to about 15,5 million people holding jobs last year, is another salient point. The sheer numbers are a recipe for social and political chaos if the situation is left unchecked. A slowing economy has only one outcome for the workers – fewer jobs and more people demanding grants.

Inflation is well within its target of between 3% and 6%, making a good case for the SARB to ease the repo rate.

A lower repo rate will give the economy a push and create the opportunity for more employment, which will translate into fewer South African being dependent on state grants to survive.

South Africans must stand together to make our country the success it can be and demand that Government put the workers first, do its utmost to get us out of the current recession, and see to it that more jobs are created instead of looking after comrades and producing a Mining Charter that has investors looking at more profitable destinations.

 

Issued by UASA