A few hours after President Jacob Zuma sought to allay investor fears at an unexpected news briefing on Thursday, the rand dropped to its lowest level in four years.
The local currency weakened to R10 against the US dollar, levels it last reached in March 2009.
The opposition Democratic Alliance criticised Zuma’s address to the media at the Union Buildings in Pretoria, saying it had been a missed opportunity.
DA MP Lindiwe Mazibuko said Zuma should have spoken decisively about the problems facing the economy.
“But instead of a plan of action on how to address our economic growth collapse to just 0.9 percent in the first quarter, we received only more of the vague reassurances which have characterised his term in office,” said Mazibuko.
She said if Zuma were “serious” about addressing the country’s economic problems he would have announced immediate changes to the “winner takes all” labour relations which had caused tensions between competing unions.
The briefing was called by Zuma to speak on the economy and developments in the mining sector.
Zuma told reporters South Africa needed a stable mining industry in order to increase its economy growth.
“Our country needs a stable and growing mining industry. Mining has been a key feature of this country’s economy for more than 130 years,” Zuma said.
He said the mining sector remained the cornerstone of the economy, “even though now smaller, relative to the size of the overall economy”.
Mining accounted for six percent of the country’s gross domestic product (GDP) and generated 60 percent of South Africa’s export revenue, he said.
The mining sector employed about one million people including nationals from neighbouring countries.
Zuma said the mining sector had been negatively affected by the depressed global economic growth, especially in Europe.
“The global recession has led to substantial declines in commodity prices and in the demand for our minerals abroad,” he said.
“And when our mining sector is in difficulties, this affects the wider economy, leading to industrial slowdown.”
Zuma said 2012 was a difficult year for the mining sector with the death of more than 40 people during a strike in Marikana.
However, government had acted to address labour relations in the mining sector.
Last week, Deputy President Kgalema Motlanthe was tasked to lead talks with labour and the mining companies, assisted by finance, labour and mineral resource ministers.
Zuma said Finance Minister Pravin Gordhan had been using every available opportunity to reassure foreign and domestic investors of government’s seriousness and commitment to the mining sector.
Mining Minister Susan Shabangu would also continue supporting the mining industry — in policy and operational aspects — to promote stability in the sector.
“Also high on the agenda is the improvement of the living conditions in the mining town, which we committed to as business, government and labour in October last year,” Zuma said.
He called on all concerned parties to “recognise the impact of the industrial relations environment on jobs and development”.
Zuma said everything done in the mining sector should be done to strengthen and grow it.
All sectors of the economy to work harder to strengthen economic performance.
“We must strengthen economic performance and increase growth,” Zuma said.
“We cannot deliver growth on our own. We need business labour and community sectors to play their part. More importantly we need all South Africans to play their part.”
A united effort was needed to improve economic growth from the 0.9 percent GDP reported in the first quarter of 2013 to the 2.7 percent targeted by government for the year, Zuma said.
Only three questions where entertained by the president after delivering his speech.