Since 2000, South Africa’s productivity rate has fallen by 41%, while looming strikes in the manufacturing, motoring and mining sectors is clouding SA’s outlook.This is also in light of the recently held Mining Lekgotla, held last week, where a call to mining stakeholders was made to promote peace and stability in the sector, especially in promoting economic investment in the country. According to Arjen de Bruin, MD of Operation Solutions at OIM, South African companies, many of which are operating at between 50%-60% of their potential productivity, need to address inefficiencies in several key areas if they are going to remain competitive in global markets, especially in light of impending strike action in the country. He argues that the current labour productivity levels have the potential to cripple South Africa’s economy, especially as job losses in the long term look imminent the current climate of high wage increases unaccompanied by higher productivity levels continues.
“We have found that, across a variety of industries, most staff produce between 4-5 hours a day, yet with the current Rand/Dollar exchange rate, which is making mineral export for mining companies expensive, means that companies are going to have work extremely hard to remain globally competitive, in light of reduced productivity. It will be really interesting to see where South Africa ranks this year on the World Economic Forum’s Global Competitiveness Report, which comes out the first week in September.”De Bruin explains that it is highly likely that, in light of ongoing strikes in the manufacturing and mining sector in the last year, the country’s ranking on the report may have slipped considerably. Last week the Rand/Dollar exchange rate hit R10.75; a new four-year low. Earlier this month workers in the gold sector downed tools, and since then the wave of strikes has mining companies recording losses of R1.9 billion in productivity. This quarter’s Employment Index from Adcorp shows that South Africa’s labour productivity has been declining steadily since 1995 and currently sits at a 50 year low. It further shows that over the last 18 years the increases in real wages have not been matched by increases in worker productivity.