Our government is a headless chicken
IT WAS HEARTBREAKING to read an article about the incredible boom in the Australian mining industry. The profits generated recently were in excess of A$200 billion (R2.04 trillion), and with new investments topping $20bnn when last year all the investment that South Africa managed to attract and not just for mining, was a minuscule $2bn. Now compare this to Australia’s fortunes.
Finally we have our “esteemed” Minister Zwane hammering the last nail into the coffin of the mining industry with the new amendments of the Mining Charter and the suspension of new mining and exploration licences, which will harm the fragile industry even further. We see already the results with AngloGold Ashanti shedding 8 500 jobs with immediate effect.
For decades now our mining industry has been on a downward spiral, bleeding jobs at the rate of 1 200 to 1 500 per month and the industry having retrenched more than 70 000 jobs in the last five years, when we are blessed and endowed with the best resources in the world to mine.
Then I read the Fraser Institute’s new list, and got even more depressed because we have dropped from the top five in the world to be sitting as the 74th mining investment preference in the world now.
Wow, what an achievement for the ANC government.
The reasons are many and varying, like the militant unions requesting increases of 15% per year in a low inflation environment; the constant strikes; the slow economic growth; policy uncertainty, but mainly that the government has no idea whatsoever how to run not just the mining industry, but the country.
Small wonder that most of our mining companies keep on investing in offshore destinations and they have stopped investing in this country, with the recent outflows already topping R350bn.
While the government talks and runs around like a headless chicken and pushes its own version of transformation, which is a pie in the sky and which is not going to happen if there is no growth in the economy, and I mean growth of 7% as the IMF suggested just last week and not the shockingly 0.3% that was achieved last year or the government’s projection of less than 1% for this year(which according to me will be even worse than last year, because another downgrade is looming at the beginning of August) and when our population growth is almost 2%. I wonder when we can start absorbing the millions of unemployed.
Does the government with its cheap talk and fancy slogans not realise they must take into consideration that unless we grow at the above rates and with a technical recession which will be a full blown one soon, we will keep on going into a deeper hole than we are in already?
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