Companies are closing shop and abandoning entire towns in South Africa

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The Congress of South African Trade Unions (Cosatu) has warned of dire consequences if the country fails to fix its local government structures and municipalities.

In a presentation on the Division of Revenue Bill to parliament this week, the country’s largest trade federation slammed the government for being silent on these failures and the impact on the local job market.

“In 2013, 86 out of the 259 municipalities were in financial problems. In 2019, it had risen to 175. In 2022, according to the Auditor-General, it has risen to 90%. Yet the Bill and Budget are silent on what is the government’s plan to fix this crisis.”“Municipal workers are being sent home unpaid. Roads, water, sanitation, and electricity are deteriorating at an alarming pace. Companies are closing, retrenching, and abandoning entire rural towns.

It cited the recent water crisis in the Lekwa Municipality in Mpumalanga which affected poultry farming and increased production costs for the region’s biggest job creator Astral Foods. South Africa’s unemployment rate reached a record high of 34,9% in Q3 2021, with 7.6 million people looking for work.

 

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