South Africa was once again failing to align its economy to the strong post-crisis commodity boom and was instead witnessing a further shrinking of the mining sector, which was being undermined further by the nationalisation rhetoric, an economist said on Wednesday.

Speaking at a Siemens breakfast, Efficient Group chief economist Dawie Roodt said the mining industry’s direct contribution to South Africa’s gross domestic product growth (GDP) would be less than 5% in the next two to three years.

“That person working at the children’s league calling for the nationalisation of the country’s mines is not doing the country’s economy any favours,” Roodt quipped.

In 1995, mining’s direct contribution to GDP was 10% falling to about 8% in 2000. The sector’s current contribution was only about 5%, and diminishing. “This is at a time when South Africa’s mining industry needs to explode.”

He expected South Africa’s overall GDP growth to hover around the 4% mark in the next two to three years. “While this is much better than the recession, it is not the 7% or 8% that we need to sufficiently grow the economy and tackle our high unemployment rate,” said Roodt.

South Africa, whose official unemployment rate has risen to worse than 25%, has set a target of creating five-million additional jobs by 2020 through its New Growth Path.

But, Roodt doubted that this would be possible if higher GDP growth was not achieved. Some of the inhibitors to stronger growth were the country’s low spending on capital and economic services, and its high spend on social grants and wages.

“The average public worker earns about 45% more than a private sector worker, yet unions keep on demanding more, despite the country’s unemployment rate. Last year, the unit labour cost increased by 10%, while productivity only increased by 3%,” Roodt lamented.

He also asserted that a South African earning R1-million a year, was receiving only about 0.6c back in the form of public goods and services.

Nevertheless, Roodt believed that the country would see a decrease in unemployment numbers as the country increasingly interlinked its economy with other emerging markets and commodity prices kept on rising.