Spreading Strike Undermines Zuma Alliance With South African Labor Unions

A strike by South African teachers, nurses and other state workers may spread in coming days, eroding an alliance between the ruling African National Congress and labor unions and harming the country’s image with investors.

The Congress of South African Trade Unions, which was pivotal in President Jacob Zuma’s rise, has called a national strike for Sept. 2 in support of the state workers. The Labor Court today stopped police officers and prison wardens from joining the strike, a spokeswoman for the police said.

The ANC’s 17-year alliance with Cosatu and the South African Communist Party has weakened since Zuma, 68, was elected last year as tensions over monetary policy and job creation increase and unions accuse officials of corruption. Labor leaders are criticizing Zuma for visiting China while schools shut down and hospitals turn patients away. The government has condemned the workers’ “sheer brutality” and called on troops to keep hospitals open.

“What we have is a fracturing of the Zuma coalition,” Aubrey Matshiqi, a political analyst at the Center for Policy Studies, said in a phone interview from Johannesburg. “People find themselves on different sides of the fault line.”

Members of the alliance were unable to convene a summit, “for fear of an implosion,” Cosatu General-Secretary Zwelinzima Vavi told reporters in Johannesburg today.

‘Dysfunctional’

The alliance with the ANC has become “dysfunctional,” Vavi said. “We face a serious crisis of legitimacy amongst workers if we can’t demonstrate concrete gains.”

The strike by state unions, representing 1.3 million workers, is the latest in a series of industrial actions that closed ports and disrupted rail services in May and shut coal mines in July. It comes three years after unions helped Zuma oust Thabo Mbeki as ANC leader.

Detroit-based General Motors Co., Toyota City, Japan-based Toyota Motor Corp. and other carmakers closed plants for eight days in August after 31,000 workers from the National Union of Metalworkers of South Africa went on strike over pay. Workers won a 10 percent wage increase.

Unions have started to direct their anger at Zuma, who has been out of the country on a state visit to China since Aug. 24 to drum up investment from the world’s second-largest economy.

Come Home

Thousands of workers marched in Johannesburg and other cities today, some bearing placards that said “Zuma, borrow money from China for your civil servants,” the South African Press Association reported.

Zuma should be at home to help revive negotiations that collapsed last week, Thembeka Gwagwa, general secretary of the Democratic Nursing Organization of South Africa, said in a phone interview yesterday.

“There are concerns about the very fluid political situation,” Razia Khan, head of Africa economic research at Standard Chartered Plc, said in a phone interview from London yesterday. “Investors haven’t yet priced in adequately the political risk.”

The rand has weakened 1.3 percent against the dollar since the strike started on Aug. 18, paring this year’s gain to only 0.4 percent, while the benchmark FTSE/JSE Africa All Share Index has fallen 3 percent.

Teachers, nurses and other state workers went on strike after the government rejected their demands for an 8.6 percent wage increase and a 1,000-rand ($136) monthly housing allowance. The government has offered to raise pay by 7 percent and the housing allowance by 700 rand, adding an extra 5 billion rand to its budgeted expenditure for the year.

Salaries Swell

Salaries already account for 32 percent of the 850 billion- rand budget, according to Finance Minister Pravin Gordhan, while inflation is at a four-year low of 3.7 percent.

The strikes have disrupted output at a time when the economy is struggling to gain momentum after last year’s recession, its first in 17 years. Growth slowed to an annualized 3.2 percent in the second quarter, down from 4.6 percent in the previous three months, as mining exports plunged, the statistics office said on Aug. 24.

The economy needs to expand 7 percent annually over the next two decades to make a significant dent in unemployment and poverty, Gordhan said on Aug. 19. The jobless rate of 25.3 percent is the highest of 62 countries tracked by Bloomberg.

Striking teachers and nurses have picketed outside hospitals and schools since last week, preventing staff from going to work and clashing with police.

“We did foresee that there was going to be a strike,” Health Minister Aaron Motsoaledi told lawmakers in Cape Town on Aug. 24. The government never foresaw “the sheer brutality and the sheer inhumanity that has been displayed.”

To contact the reporters on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net.

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