South Africa: a ticking time bomb

On Wednesday, thousands of workers of the labour federations SAFTU and Cosatu took to the streets across South Africa to protest against the massive cost of living crisis, which has hit the working class and poor people especially hard.

Protests were held in the major cities of Pretoria, Johannesburg, Durban and Cape Town. Deep anger and frustration are running high amongst the working class over a deep cost of living crisis, mass retrenchments, wage freezes and brutal austerity measures in the wake of the coronavirus pandemic.

But the truth is that these protests on Wednesday were very small and hardly made a dent in the functioning of the economy, despite the fact that the unions called it a “national shutdown.” 

The reason for this can be found in the way the unions have conducted the struggle over the last few years. As a matter of fact, this is the latest in a series of one-day general strikes: in April 2018, October 2019, February 2020 and again on Wednesday.

But a series of one-day strikes is not enough to stop the attacks on living standards. Over this period, the situation has only worsened. The truth is that the unions have not used this series of one-day general strikes to build momentum in order to elevate the struggle to a higher level. The effect is despondency and demoralisation in the ranks of the workers. But this does not mean that the workers are not prepared to fight. On the contrary, what is needed is a genuine programme of struggle. The movement of the working class is not a tap, which can be opened and closed at the whim of the trade union officials.

Rising cost of living

Inflation has been soaring worldwide, fuelled by supply chain disruptions after the easing of COVID-19 restrictions, as well as surging energy and food prices following Russia’s war on Ukraine. In South Africa, it has resulted in rising costs for goods including food, electricity, fuel and medication. According to a World Bank report, about 30 million people in South Africa are now living in poverty, while 13.8 million people are facing food scarcity that has been worsened by rising food prices due to the Russian invasion of Ukraine.

People are having a tough time surviving. As of July, inflation has accelerated to its highest level in 13 years, pushed mainly by surging prices for food, transport and electricity. Consumer prices rose by 7.8 percent in July after reaching 7.4 percent in June, according to the national statistics agency, StatsSA.

Food prices have gone up by 10 percent in the last year alone. Prices for bread and cereals were up by 13.7 percent in July from 11.2 percent in June. It means a loaf of white bread now costs 17.84 rands  compared with 15.57 rands one year ago. The price of fuel increased by 56.2 percent from last year, pushed up by Russia’s invasion of Ukraine, despite the government’s suspension of an increase in the fuel levy earlier this year. The rising cost of living is taking a toll on the public, where the jobless rate hovers near 34 percent.

A deep crisis

The South African economy has been on the receiving end since 2009. Since then, it has never returned to pre-2008 levels of economic growth. That crisis led to job losses of about 1 million in 2009. Moreover, economic growth declined further from 2011 onward, as commodity prices fell due to falling demand.

But even before the pandemic, South Africa had entered into a recession. GDP growth declined by 0.6 percent in quarter three of 2019, and by 1.4 percent in quarter four. The trend of low growth continued, worsening when COVID-19 hit.

Moreover, consumers’ purchasing power is deteriorating on a daily basis due to high prices for food, electricity and interest rates.This is compounded by high inflation since 2018, which averaged 5.9 percent and has now risen to 7.8 percent.

About 14 million South Africans, or approximately 24 percent of the population, were living in poverty before the pandemic. Then the deprivation and inequality worsened when President Cyril Ramaphosa launched one of the world’s strictest lockdowns in March 2020. The country continued to enforce lockdowns to varying degrees for much of the next two years. The result was that by the end of 2020, 2 million South Africans had lost their jobs, pushing unemployment up to 35 percent. One survey reported that 47 percent of households had run out of money to buy food by April 2020.

A crisis of capitalism

South Africa’s economy is still reeling from the negative impact of the COVID-19, compounded by the fallout of the war in Ukraine. The rising cost of living has been compounded by rolling power blackouts due to the inability of the state-owned power company, Eskom, to generate adequate electricity. To add insult to injury, Eskom then applied for an increase in electricity prices despite it failing to provide an uninterrupted power supply for industry and households.

The crisis of capitalism is especially acute in South Africa. It is the vast majority of poor and working-class people who suffer the worst effects of this crisis: mass unemployment, a lack of decent housing, inadequate education, landlessness, and rapidly falling living standards. The root cause of this situation lies in the capitalist system, which is unable to grant even the smallest concessions to the workers and poor.

The crisis in the economy is having a catastrophic impact on living standards. Working class people are now worse off than they were ten years ago. Real unemployment stands at 10.2 million people. To this must be added the millions of jobs lost during the lockdown. Precarious workers have been devastated, with 3 million having lost their jobs overnight. Youth unemployment is the highest in the world. Unemployment levels for young people aged between 15 to 24 stands at 59 percent. More than 8 million of the country’s 20.5 million young people neither have a job, nor are they in education or training. A whole generation has now grown up with this as their reality.

One of the most unequal countries

South Africa is one of the world’s most unequal societies both in terms of income and wealth. The top one percent takes 20 percent of all income, while the top 10 percent takes 65 percent of all income. The real wages of the bottom 10 percent shrank by 25 percent between 2011 and 2015. By contrast, the income of the top two percent grew by 15 percent over the same period. The top one percent meanwhile saw their incomes grow by a massive 48 percent.

South Africa has a relatively well-developed economy and advanced infrastructure. One of the world’s largest exporters of gold, platinum, and other natural resources; it also has well-established manufacturing, financial, energy and communications sectors. Despite this, the majority of the people lead a precarious existence.

Half of the population lives in poverty. Feeding a single person nutritiously for one month costs between 530 and 670 rand. A child support grant of 440 rand a month isn’t even enough to meet a child’s nutritional needs, while an old age grant of 1,860 rand falls far short of what is required to cover the costs of maintaining a family. This is the situation simply as regards food, before we take into account the cost of transport, rent, electricity, education, clothing, etc. The monthly minimum wage of 3,500 rand is nearly half the amount required to cover the basic costs of a household for one month.

A revolutionary alternative needed

Since at least the 1950s, the ANC has held a near-monopoly of support from the black, working masses. Now, decades after it won the 1994 elections, the former liberation movement is facing a ruinous crisis. The collapse of its moral authority, after years of corruption scandals and attacks on the working class, is the end result of governing on a capitalist basis. There are huge class contradictions within the party. While the ANC leadership has joined the ranks of the ruling class, living lavish lives and engaging in a frenzy of looting and theft, the conditions of the working masses, for whom the party served as the traditional political vehicle, have either stagnated or worsened.

The crisis in the party shows how the interests of these two forces cannot be reconciled. The class contradictions are tearing the party apart. The problem is that there is not yet a genuine revolutionary party in South Africa, which could lead the working class and the oppressed out of this quagmire. The building of such a revolutionary tendency is the most urgent task facing the working class and the revolutionary youth of South Africa today.

The pressures building up in South African society are enormous. It must find an expression in one way or another. Sooner or later, that limit will be reached and the workers will move again. When they do, all organisations, groups, tendencies and leaders will be put to the test.

The capitalist system is completely incapable of providing people with a decent standard of living. It is a monstrously oppressive system that enriches a tiny minority of capitalists and crushes the majority of ordinary people. The only way forward for the working class and the oppressed is to overthrow this system.