South Africa ‘concerned’ as port, rail strike hits economy

South Africa’s government said on Thursday it was “extremely concerned” at a prolonged strike at state-owned logistics utility Transnet that has affected ports and rails, hampering exports and hurting the economy.

Workers at the company, which operates the freight rail network and all the ports in Africa’s most industrialized economy, went on strike last week demanding an increase in wages amid high inflation.

“Government is extremely concerned about the negative impact on the South African economy,” South Africa’s ministers for labour, agriculture and public enterprises said in a joint statement.

They called for the resumption of exports of agricultural, minerals and other products “as soon as possible”, noting these contributed to maintaining hundreds of thousands of jobs across the country.

The strike is costing mining firms 815 million rand ($44 million) in exports a day, according to the Minerals Council South Africa, an industry group.

Major mineral export harbours were operating at between 12 percent and 30 percent of their daily averages, the group said in a statement, adding this was “damaging an already fragile economy”.

Negotiations between Transnet and trade unions have so far been unsuccessful.

On Thursday, Transnet offered workers a 4.5 percent increase in wages followed by a further 5.3 percent raise over the next two years.

But the offer was promptly turned down by workers’ representatives that are demanding a pay raise aligned with inflation, which stood at 7.6 percent in August.