13th annual Municipal Finance Conference


13th annual Municipal Finance Conference


Africa in the news: South African mining sector takes hit, Burundi shaken by assassinations, Zimbabwe undergoes mass firings


Economic challenges in South Africa include potential job losses in mining sector


Several of South Africa largest mining companies are considering plans to reduce operations and cut jobs as global commodity prices drop to record lows. Announcements from industry leaders, including Sibanye Gold Ltd., Lonmin Plc, and AngloGold Ashanti Ltd., add to the country’s ongoing economic woes. As a reaction to planned retrenchments, South African Minister of Mineral Resources Ngoako Ramatlhodi held a series of emergency meetings with business leaders and labor unions this week to identify “alternatives” to projected job cuts (as many as 10,000), which could add to the country’s already high 25 percent unemployment rate. These meetings occurred as the largest union in South Africa’s gold industry rejected pay increase proposals that might otherwise have ended ongoing contract negotiations, prompting renewed concern over “a repeat of a strike that crippled the world’s biggest platinum mines for five months last year.”

Unemployment and labor unrest are likely to be major considerations in South Africa’s 2016 municipal elections, with the ruling African National Congress’ largest rival the Democratic Alliance seeking gains in several of the country’s key metropolitan areas, including South Africa’s economic center, Johannesburg.

assassinations target activists and 
political elite

Following Burundian President Pierre Nkurunziza’s widely disputed re-election last month, several high-profile assassination attempts on members of both sides of the political divide have stoked concerns that the escalating violence could become “a danger for the whole region,” as stated by U.N. Special Representative Abdoulaye Bathily. On Sunday, one of the president’s closest advisers, General Adolphe Nshimirimana, and his bodyguards were killed in a drive-by shooting by men in military uniforms. On Monday evening, human rights activist and ardent critic of the president’s third term bid, Pierre Claver Mbonimpa, was seriously injured by armed motorcyclists in another attack. By Thursday, four more government officials had been murdered.

Despite these assaults, some analysts argue that the country is not yet at its “worst case scenario” as the violence remains fairly contained and reflects similar tensions following the 2010 elections. Still, Human Rights Watch released a report earlier this week documenting an increase in violence from the police, who have been conducting sweeping arrests and even torture of the political opposition since April 2015. Regional and international actors are also watching the situation in Burundi closely and have expressed grave concerns over the recent killings, although their ability to prevent further violence by sanctioning the perpetrators or intervening militarily in Burundi may be seriously constrained by regional political dynamics. As noted in the Daily Maverick, Burundi provides nearly a quarter of the African Union’s (AU) 22,000 troops to its mission in Somalia (AMISON). Any dismissal of Burundi from the AU or threat of military action could result in the troops being withdrawn, seriously jeopardizing the progress and sustainability of the mission.


Zimbabwean cabinet approves amendments to labor law


Zimbabwe Federation of Trade Unions’ estimates suggest that over 18,000 employees have been dismissed in Zimbabwe over the last three weeks following the Zimbabwean Supreme Court’s ruling on July 17 that eased the termination of employees’ contracts. The ruling has made it legal to let go employees with just three months’ notice and without any retrenchment packages. Together with a shrinking economy, the labor act has exposed workers to large-scale layoffs.  Public sector employees have also been targeted by the ruling as the government has ordered parastatals to reduce their administrative costs. Civil servant wages account for around 80 percent of the national budget and in the mid-term fiscal policy review in July, Finance Minister Patrick Chinamasa hinted at civil service retrenchments to bring the wage bill down to 40 percent. Supporters of the ruling have denied that employers were retrenching workers without a just cause. They have claimed that the changing social dynamics necessitated the ruling, and the law would ease the recruitment of employees on contract basis.

The cabinet has now approved some amendments to the labor act to protect both employers and employees. Earlier President Mugabe was also expected to intervene using his presidential powers to halt the retrenchment.