South Africa's economy contracted by 1.3% in the second quarter of 2015, according to Stats SA's latest GDP data.
Stats SA says the weak rate of economic growth is due to poor performances by nearly all major industries.
(Also read our article: SA unemployment rate drops to 25% in second quarter)
According to Stats SA, the country’s economy has not grown since the beginning of the year and the agriculture, manufacturing and mining industries could jeopardise any prospect of achieving 5% GDP growth.
Although total mining production is up 4% in June 2015 compared to a year ago, the industry is said to be facing serious challenges, particular with regards to labour legislation.
Peter Major, Mining Analyst at Cadiz Corporate Solutions, says that comparing economic figures across time periods is problematic because of changing industry conditions.
According to Major, the South African mining sector is suffering because it is run on ideology and not meritocracy.
Unfortunately, these are man-made problems, exclusive to South Africa. Though commodity prices are not bad, the issue lies with labour laws and the political attitudes of our leadership. The industry needs straight talk.— Peter Major, Mining Analyst at Cadiz Corporate Solutions
Trade union solidarity has estimated that 60,000 jobs will be lost across different sectors this year.
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