The South Africa Reserve Bank has warned that the worrying trend of above-inflation wage hikes being granted to unions threatening strikes will lead to a price spiral. Because productivity gains in the various sectors do not offset the larger wage hikes, this will likely lead to inflation. This, in turn, will require a harsher monetary response from the central bank. The bank is already in a hiking cycle, with most economists anticipating at least another 100bp hike by the end of the year.
Questions have also been raised as to why the group is spending so much money expropriating properties to make way for new routes instead of taking the system fully underground. [The Financial Sector Conduct Authority has ordered the ANC to pay up its provident fund, which has fallen into arrears to the tune of R86 million. Over 500 employees have been locked out of their pensions because the party failed to keep up to date with payments.