Ramaphosa to meet with rating agencies over minimum wage implications

The deputy president says the proposed figure still needs to be debated but cannot be set too high.

FILE: Deputy President Cyril Ramaphosa speaking at the South African National Aids Council plenary meeting held at the Sheraton Hotel. Picture: GCIS.

JOHANNESBURG – Deputy President Cyril Ramaphosa says he will be meeting with the ratings agencies and alerting them to the possible implications of a national minimum wage.

On Sunday, Ramaphosa released a report which has proposed a starting level of R3,500 as a means to address the wage gaps in South Africa.

The deputy president says this policy intervention will assist in assuring ratings agencies that the country is working towards a more stable labour environment.

Ramaphosa says the proposed figure still needs to be debated but it cannot be set too high as this could increase the risk of job losses.

He says there has been agreement among the social partners to have workers vote on whether or not they want to go on strike

“And it’s been broadly agreed that there should be balloting before strikes and this has been a phenomenal success.”

But the Federation of Unions of South Africa (Fedusa)'s Dennis George says this shows a trust deficit.

“Why would you ask the next person to do a ballot? It’s because you want to more clarify what's really happening.”

The report has proposed a timeline for a national minimum wage to be implemented by July 2019 but Ramaphosa says this is not rigid as the figure must first be debated.

FITCH SATISFIED WITH GOVT EFFORTS

Last week, Ramaphosa said he met with credit rating agency Fitch and said that the agency is satisfied with government’s efforts to achieve economic growth.

Government is seeking to avert a further downgrade of the country’s credit rating which Fitch has at BBB minus with a stable outlook.

The deputy president said he had a positive meeting with the rating agency.

“We had a long discussion, one of the things they're focusing on is the labour stability issue, they wanted to know what progress we are making and they wanted to hear about the minimum wage.”

In its last assessment in June, Fitch flagged the country’s low economic growth as a concern.

“The growth story, where is growth going to come from? They are focusing on, but by and large we had a good a meeting with them.”

He said he also briefed the agency on the reform process for state-owned enterprises, saying that it seemed satisfied with the progress made.

(Edited by Leeto M Khoza)