South Africa unions call for economic changes

JOHANNESBURG (Reuters) – South Africa's powerful trade union federation said on Friday it would still push for economic policy changes after the ruling ANC warned labour against pressuring President Jacob Zuma to meet their demands.

Investors worry that trade unions and communists who helped Zuma’s rise will push the new leader into steering Africa’s biggest economy to the left.

After metalworkers protested outside the Reserve Bank on Thursday, demanding a deep interest rate cut, ANC Secretary-General Gwede Mantashe said unions were projecting Zuma’s leadership as weak and indebted to constituencies.

The COSATU trade union federation said workers were experiencing tough times during the global economic crisis and must stand up for their rights. The key mining industry has announced 24,000 job cuts. But only a fraction of that has been carried out.

"COSATU cannot simply sit back and relax," union spokesman Patrick Craven told Reuters. While he pledged COSATU would work closely with Zuma’s government, Craven said it should defuse a "time bomb" over wages.

COSATU, which says it has 1.8 million paid-up members, moved quickly to assert itself after Zuma was sworn in on May 9.

It came close to derailing the listing of mobile phone group Vodacom, objecting to the company going public because it forms part of a deal that gives UK-based Vodafone control of the company and would lead to job losses.

COSATU also warned of a public sector strike unless the government fulfilled promises it made in a 2007 wage deal. 

The case has intensified fears of resurgent union clout under Zuma and raised questions about South Africa’s reputation as an investor-friendly emerging market. Zuma has promised continuity.

South Africa’s central bank cut its repo rate by 100 basis points on Thursday to help boost an economy now in its first recession in 17 years, but warned against further big reductions because of "sticky" inflation.

COSATU had demanded a rate cut of at least 200 basis points.