Violent Strikes Worsen South Africa’s Economic Situation

South Africa Economy
South Africa’s economy is still in the hands the White minority

AFRICANGLOBE – Unlawful or violent industrial action could only worsen South Africa’s economic situation, according Roger Jardine, the CEO of Aveng, one of the country’s largest construction companies.

This makes Jardine to be among the first of South Africa’s chief executive officers to come out publicly criticising the violent strikes and their impact on the country’s economy.

South African company executives often refrain from making comments about the country’s economy as they get to be reprimanded by the ruling party, ANC and the country’s most powerful worker federation, Cosatu.

Aveng had to soak up R120 million ($13 million) in costs related to labour troubles at the Medupi power plant construction site and at other construction and mining works in the second quarter of the company’s half-year reporting period.

“Since the middle of last year, our company and many others across the mining, construction and transport industries have been negatively impacted by a series of un-procedural and sometimes violent strikes,” Jardine said.

“I acknowledge the right of employees to strike as part of the collective bargaining process, or when their rights are violated, (but) the level of violence and disregard for established dispute resolution processes is self-defeating and cannot be justified.”

Jardine said this was happening at a time when the South African economy had slowed down for a couple of years and fewer “new job opportunities were being created.”

Jardine made these comments as the company posted a 30 percent increase in revenues for the six months to December 2012.

Operating profits “improved 56 percent” while the order book was strong at R40 billion ($432.5 million).

The group was excited that some of the large African infrastructure projects outside South Africa had reached implementation stage. The company had made progress in its big contracts in Mozambique and Mauritius.

“The group’s performance for the first six months of the year reflects the modest recovery in the global economy and the subdued operating environment in the construction and engineering segments,” Jardine said.

“Despite challenging market conditions, Aveng continues to unlock value for its shareholders by remaining focused on its long term strategy of diversifying revenue in key growth markets.”


By Mzwandile Jacks