Social partners at the policy formulating body the National Economic Development and Labour Council (Nedlac) have criticised the government’s lack of leadership in steering efforts aimed at hammering out a comprehensive social compact to tackle slow economic growth and rising unemployment in SA.
During his state of the nation address in February 2022, President Cyril Ramaphosa announced that the government and its social partners would within 100 days hammer out a comprehensive social compact to deal with poor economic growth and unemployment.
In March, Ramaphosa, criticised by former president Thabo Mbeki for making false promises to the nation, sought to explain why the social compact had not been realised: “We had wanted to have a comprehensive social compact and we had put together a timeline and we were not able to reach that timeline, but what we have seen over time is that we have been able to reach a number of compacts.”
The social partners on Thursday berated the government, saying it lacked seriousness to see to the cohesion required for strong economic growth.
The struggling economy continues to show signs of strain from rotational power cuts, high interest rates and accelerating inflation that has sent the cost of living through the roof.
Data released by Stats SA on Tuesday shows the economy grew 0.4% quarter on quarter after a downwardly revised 1.1% decline in the prior quarter. Eight of the 10 industries recorded growth on a quarterly basis.
The economy, one of the largest and most diversified on the continent, is dogged by one of the highest joblessness rates in the world, with the latest Stats SA numbers in May showing it increased 0.2 percentage points to 32.9% from 32.7% previously.
Nedlac executive director Lisa Seftel responded to a list of questions from Business Day with a one-liner: “Nedlac has not been involved in the proposal of the president for a social compact as spelt out in his [state of the nation address] in 2022.”
Cas Coovadia, CEO of Business Unity SA (Busa), which represents established businesses, said: “We have been clear: a broad social compact [is] not [the] way to go ... We believe bilateral, action-orientated work between the government and business could go towards building a compact that is action-orientated.”
Business Day reported on Thursday Ramaphosa teamed up with executives from the country’s largest companies to form “crisis committees” to tackle power shortages, inefficient ports and rampant crime — a huge involvement of the private sector that illustrates the weakness of the state.
Zwelinzima Vavi, general secretary of the SA Federation of Trade Unions (Saftu), which was accepted as a member of Nedlac in February, said his federation was wary of the compacts: “From where we stand all those agreements are not worth the paper they are written on. The crisis is worse today than before. They misled the country into believing that help is on its way.”
National Council of Trade Unions (Nactu) general secretary Narius Moloto said “not much has really happened” with the social compact, and that social partners last met in 2022.
“There were efforts at Nedlac but those efforts did not bear any fruit. There is no clear outcome. There is nothing I can tell you that this is the product of those discussions. Talks have been there but nothing came of those talks,” he said.
Empty promises
Moloto put the blame for the snail’s pace squarely at the government’s door, saying: “There is no leadership and no commitment to this thing. There is no focus. The government is trying to focus on too many things at once.”
He described announcements around the social compact as “cheap politicking” akin to making empty promises. “This year social partners have not met, this is a very disappointing state of affairs.”
Matthew Parks, Cosatu’s delegate to Nedlac, said there had not been “much progress”, and blamed the government for dragging its feet and cancelling meetings at the 11th hour. “We have been waiting for the government, there have been several meeting dates set and they were cancelled by government, leaving us in limbo,” Parks said.
“We even made proposals to the government to say let’s take it one step at a time, like, looking at a discussion on the rail network or municipalities.
“We were supposed to meet as partners at the end of March but that meeting was cancelled at the last minute by the government ... we have not heard from them since. There are too many distractions.”
Traps
Federation of Unions of SA (Fedusa) general secretary Riefdah Ajam said things had regressed: “We are not making progress.”
Community leader Thulani Tshefuta said his constituency wanted the social compact to be the biggest “we have ever worked on”.
“One of the first traps we fell into was that, immediately after discussions started, the different constituencies put forward their narrow sectarian demands ... that shifted us from the spirit of using the social compact to find solutions to challenges confronting our country,” Tshefuta said.
“The decline [began] from there ... the direction the discussions began to take was not addressing what the president had called us to do,” he said.
“In discussions, we were beginning to say let’s use the social compact to be an implementation plan for the Economic Reconstruction and Recovery Plan. But our view was that the plan was insufficient on its own as it never dealt with issues of poverty, which is a pressing and glaring challenge in our society.”
The social partners last met during the second semester of 2022, he said.
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