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Alba Iulia
Sunday, January 17, 2021

Mboweni warns that South Africa could become another Zambia

Economy Mboweni warns that South Africa could become another Zambia

South Africa can’t implement a pay deal with public servants because it would precipitate a fiscal crisis, Finance Minister Tito Mboweni said.

The government and labour unions will square off in the Labour Appeal Court on Dec. 2 over Mboweni’s proposal to freeze wages that have surged 51% since 2008.

Last week, Fitch Ratings and Moody’s Investors Service cut South Africa’s debt assessments deeper into junk, saying the state may struggle to stick to its plan to rein in spending.

“What government and the South African economy cannot now afford, and what is not just and equitable under the current circumstances, is for civil servants to claim yet further inflation-beating and private sector outperforming salary increases off an already high base,” Mboweni said in court documents.

South Africa’s government reneged on a three-year pay deal earlier this year and Mboweni said last month it will freeze wages for the coming three years.

The government and unions usually negotiate page for three years at a time and the current agreement will end in March 2021.

The Congress of South African Trade Unions, the nation’s largest worker federation, has warned the dispute over salaries could lead to the unravelling of its alliance with the ruling African National Congress.

Mboweni said Zambia’s financial woes provided a cautionary tale and South Africa can ill afford to go down the same path.

Zambia this month defaulted on its Eurobonds, the first African nation to do so since the onset of the coronavirus pandemic.

The South African government would be compelled to borrow more than R78 billion ($5.1 billion) if the court backs the labour unions in their fight to have the wage agreement implemented, Public Service and Administration Minister Senzo Mchunu said in the court documents.

Source: Bloomberg

22 COMMENTS

  1. Our friends in RSA, you still have a chance to save your economy.

    Us here in Zambia, it is too late. It is just a matter of months before we are like Zimbabwe.

    You have seen here in Zambia that corrupt thieving leadership destroys economies and lives.

    Save yourselves while you still can.

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  2. HAHAHA this is the funniest thing I have read al year. I agree with the first comment above that south africa can never and will never be like zambia. Surely we are much better and advanced than them. Last I checked, we did not have whlte people in zambia owning majority of our land. Also last i checked we did not have segregation in our country or whltes who think that they are better than the indegenious owners of the country. Last I checked we did not have one of the highest crime rates in world. last i checked we did not have one of the highest rape rates in world. SO please how can this f00lish finance minister compare his backwards country to the great zambia? I even wonder why zambians move to south africa to risk their lives.

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  3. HAHAHA this is the funniest thing I have read al year. I agree with the first comment above that south africa can never and will never be like zambia. Surely we are much better and advanced than them. Last I checked, we did not have whlte people in zambia owning majority of our land. Also last i checked we did not have segregation in our country or whltes who think that they are better than the indegenious owners of the country. Last I checked we did not have one of the highest crime rates in world. last i checked we did not have one of the highest rape rates in world. SO please how can this sick fat finance minister compare his backwards country to the great zambia? I even wonder why zambians move to south africa to risk their lives.

  4. Massive corruption has destroyed our country, all that huge debt with nothing to show for it. It is very embarrassing especially for those in power, the situation can not be reversed or improved unfortunately. I saw them making huge donations on ZNBC TV, where do they get such money? One of them donated K100,000, another K50,000 and a K20,000

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  5. We took mboweni to school run away from his homeland because he’s a coward failed to liberate himself from apartheid it to take Zambia and it’s frontline states to negotiate for political independence as they still are not economically Independent as most blacks are illiterate in SA.

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  6. Zambia is by far better than South Africa, we are not oppressed by foreigners in our midst that own and enjoy the blessings God has endowed us. As for ratings agencies, their credibility has been tarnished, they downgrade and downgrade yet life goes on. Thank God for China, we now how an alternative to western capital. What they don’t know is Zambia’s GDB is based on 2012 inputs, if you look at the economic expansion since then we are at least three times bigger an economy than they base their myopic ratings on. That’s why we don’t collapse as they expect.

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  7. He is capitalist together with his president and they are not different from hh, they have sold their lives to the white man as they have co-owned businesses with white men and they are the ones managing the same in tax Haven’s. You stole from Africa and gave white man to manage on their behalf hence their loyalty to white people and always painting Africa badly!

  8. Ndileshyafye please wake up while you are still dreaming. You may go in a nightmare!! They are already in Zambia and they lockup workers in factories because of COVID-19. Ask Joyce Nyonde! When you get the answer rally behind Kaizer- 2021 momentum is picking up.

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  9. What’s with this Mboweni and Zambia?? His obsession for Zambia sounds exactly the same as Seer 1’s obsession for our country.

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  10. Never mind about the animal called mbowenu. H|is brain resides in his bottoms. Besides he knows that friend hh is headed for another landslide loss in 2021.

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  11. We’re becoming a by-word for how things can go wrong. Wait till the effects of default percolate through the economy. Then u will know that u don’t take tribal politics to the bond markets.

  12. Zambia was used as a template by Greece when they had issues with IMF, with Zambia having reneged on its IMF obligations about 30 years ago when it asked the IMF to delay its repayment… it’s an old habit this of asking for nkongole to be postponed. We just shouldn’t make it a habit and fall into the Zimbabwe sinkhole. It is hard to get out of that one banene…

  13. Ati Zambia is better than South Africa! Kikikikiki. And the reason given is that indigenous South Africans are poor and that it is Foreigners that are prosperous. Isn’t this true about Zambia as well? Indians and Chines control our econmy. And if we are not careful, the Rwandese are becoming powerful by suffocating the small businesses that our brothers and sisters were enjoying. These guys are now living like Kings. Our GRZ is just concerned about bill 10 and winning 2021 elections.

  14. Zambia is now an example of how delinquent a country can be, all thanks to chagwa and his illiterate advisers like kz

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