By the end of last week, the news trickling through was that the longest mining strike in South Africa was about to reach a conclusion.
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On the surface, this is good news to the mining sectors, the labour movements and the employees who had gone for five months without wages.
But is this good news at all or it is just a positive development whose impact in terms of outcome is next to nothing?
For the mining sector, it is good news as they will resume production enabling them to service their debts.
But they resume operations in an economy whose rand has been weakened by the same strike.
This means that the mining sector will have to pay more in rand for imported materials required for the mining industry.
And this may likely push prices of local products higher.
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For employees, it also seems to be good news. But five months without reporting for work in South Africa is not one of the easiest tasks unless one can access ancillaries from the banks, friends or relatives.
So they too resume work needing to service their debts. But that is not the only challenge.
The labour movements have not managed to get R12 500 monthly salary, but reports suggest that they secured something nearer to that.
Whatever they get today, its buying power has already been washed away, as prices of goods and services continue to rise owing to a weakened rand partly due to the strike.
So who are the biggest losers and winners from the five-month long striker? Certainly the mining sector and the employees are the direct losers and the reported agreement to resume work in nothing more pacifying both ends.
The South African economy is by far the biggest loser given the role of the mining sector in South Africa.
Perhaps the leaders of the labour movements are the biggest winners, not only in terms of numbers, but political influence.
Securing something nearer to R12 500 a month quantitatively and politically resembles an achievement though qualitatively a nullity when we factor the weakening rand against major currencies and rising prices of goods and services.
In my previous installments, I have questioned how labour movements in South Africa have wielded so much power unchecked, a situation which now threatens the economic stability of the country.
In fact, it seems the government of South Africa has not shown a lot of interest in mediating between the employers and labour movements, a situation which has put employers at the mess of the labour movements.
Labour movements are a big political venture in South Africa.
Leaders of the ever-increasing labour movements are more inclined to take workers to the streets to showcase their following than enskilling their followers to be more effective and productive and use that as justification for wage demands.
In such a scenario, where investors are attracted by abundance of business opportunities, but faced by a hostile labour movement, one has to trade carefully to minimise the loss.
This means, in some cases investing less, to lessen the risk which ultimately means less jobs.
For those reasons and the government’s loud silence on these issues, the South African economy has been apprehensive, slumbered and somewhat regressive with the rand hitting a five-year low against the dollar.
The government has allowed this under the pretext of ensuring workers’ rights and addressing the imbalances of the past without taking into account the negative impact of labour organisations to the economy of the country.
While the government has remained aloof, there are both financial and political costs to that approach.
Strikes are counter-productive to job creation, the more people continue to strike, the more likely unemployment is going to increase and the welfare bill continue to increase against a depleting income tax-base.
As poverty creeps in, the people will turn on their frustrations to the government and not labour movements.
While it remains one of the biggest economies in Africa, the South African economy needs to be rescued, protected and grown.
Doing so requires balancing between upholding workers’ rights and creating an environment conducive for investors.
As it stands, South Africa is an attractive investment destination that is contaminated by political interests of those occupying leadership positions in the labour movements.
