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Lo and behold! The strike is over but at what cost?

By Staff Writer
Transnet finally reached a deal with the striking workers on Thursday to end a long running wage dispute - and with the World Cup just around the corner, the timing could not have been sweeter.

The transport strike has been on the go for three weeks and it has cost South Africa's economy billions and has also had an effect on those who rely on the country for export materials.

South Africa exports tons of metals, cars, fruit and wine to places like Europe and other neighbouring and it's expected that the loss in production and sales sits at about R7 billion.

The South African Transport and Allied Workers Union (Satawu) said that the majority of its members had agreed to Transnet's new offer - which is made up off an one-off one percent payment and an 11 percent wage increase.

"The offer has been accepted ... and the understanding is that the workers will start going back to work tomorrow," Robert Mashego, Deputy President at Satawu, told Reuters on Thursday.

The strikes came under vast criticism from both economists and the central bank - both claiming that the unions have sinister motives by striking prior to the World Cup, and there were claims that the World Cup could be used as leverage to try to push increases 5.1 percent past inflation.

"We are seeing continued upside pressures on wages in both the public and private sectors," said Peter Attard Montalto, emerging market economist at Nomura International.

"Wage settlements are still unanchored from inflation and will cause a range of second-round inflation effects through the second half of the year ... leading ultimately to rate hikes."

The backlogged caused by the strike will take about a month to clear with the mining, transport, manufacturing and producers of perishable goods being hit the hardest.

Expert analysts believe that the strike will have long-lasting effects on the country's exports with South Africa losing export contracts to places like Brazil and India and job cuts could follow as a result.

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