South Africa’s Finance Minister Pravin Gordhan on Friday warned that the unrest hitting the country’s mines will hurt economic growth, jobs and investor confidence in the continent’s powerhouse if unchecked.
“If this instability continues and the lack of production continues, firstly the cost will be in terms of the overall growth numbers in South Africa,” he told reporters.
Gordhan said the troubles which have shut down two of the world’s top platinum producers will hit South Africa’s exports, as the key sector contributes 50 percent of the export earnings.
A further risk was the threat to already worrying joblessness with platinum giants Anglo American Platinum and Lonmin having sounded the alarm on potential job losses posed by the strikes which have swelled in recent weeks.
“At a time when we are talking 23, 24 percent unemployment in South Africa, we cannot allow the sort of activities to go on which threaten to increase the unemployment numbers in this country,” he said.
In a worrying image for investors, the walkouts have been accompanied by bloodshed with 45 people killed so far at Lonmin and threats have been made on miners who try to go to work amid calls for deeper strike action.
“The violent acts we engage in or the incitement and perpetration of violence undermine confidence in the South African economy,” cautioned Gordhan.
South Africa’s growth is set to slow to 2.7 percent this year, according to the government’s estimates in February, with the International Monetary Fund last month slightly dimming their forecast to 2.6 percent.