Ramaphosa declares economic emergency in South Africa

South African President Cyril Ramaphosa has declared an “economic emergency” as the ruling African National Congress (ANC) unveiled a sweeping 10-point plan to revive the country’s faltering economy, even as labour tensions at Eskom and mounting financial woes within the ANC threaten to deepen instability.

• President Ramaphosa declares an “economic emergency” and launches a 10-point recovery plan focused on job creation and state efficiency.
• Eskom’s largest union demands a 15% wage increase, more than four times the inflation rate, as wage talks loom.
• The ANC faces insolvency proceedings after debts surpass $4.5 million, threatening its campaign funding.
• Despite economic turbulence, South Africa’s foreign reserves increased to $67.9 billion, and the rand remained stable against the dollar.

Speaking at the launch of the initiative, Ramaphosa announced the creation of an “Economic War Room” within the Presidency. This task force will coordinate government performance and track progress on job creation, state efficiency, and industrial growth.

“We are treating this as an emergency because it is one. The Economic War Room will ensure that government departments are held accountable, that delivery is tracked, and that South Africans see the impact of our actions,” Ramaphosa said.

The announcement comes as South Africa faces persistent unemployment, sluggish economic growth, and ongoing power challenges.

The rand traded relatively stable on Tuesday at around R17.21 to the dollar, supported by a rise in foreign reserves to $67.9 billion, up from $65.9 billion in August, slightly higher than analysts’ expectations.

Eskom wage tensions rise

In a parallel development, South Africa’s state-owned power utility, Eskom, is bracing for heated wage negotiations.

The utility’s largest union is demanding a 15% pay increase, over four times the inflation rate, following Eskom’s partial stabilisation of the national grid after years of rolling blackouts.

Eskom spokesperson Daphne Mokwena declined to discuss specific wage demands, saying talks had not yet formally begun.

Analysts warn that the standoff could reignite tensions in the energy sector, potentially disrupting the fragile power recovery that has brought relief to businesses and households.

ANC’s financial troubles deepen

Adding to the country’s growing list of crises, the ANC itself faces a potential insolvency battle.

Reports indicate that the party’s bank accounts have been attached to settle debts amounting to $4.5 million, which threatens access to over $55 million in state and private funding ahead of next year’s crucial local elections.

Party insiders fear the financial blow could weaken the ANC’s campaign capacity and deepen internal divisions.

Legal and financial hurdles

Meanwhile, lobby group AfriForum successfully obtained a temporary court order halting Eskom’s $2.8 billion settlement with the National Energy Regulator of South Africa (Nersa), calling the deal “unlawful and lacking transparency.”

The ruling has been hailed as a win for public accountability but may complicate Eskom’s financial restructuring efforts.

Separately, the Government Employees Pension Fund (GEPF) announced a temporary freeze on new “two-pot” withdrawal applications from October 7 to 21 for a system upgrade, although regular benefit payments will continue.

Despite these domestic challenges, the rand’s relative stability underscores investor resilience amid global volatility, a sign that, for now, markets are still giving South Africa the benefit of the doubt.