Johannesburg - Government could reach a deal with public workers before a coalition of unions, representing 1.3 million civil servants including police, customs officials, teachers and health workers, stages a prolonged stoppage that could deal a blow to commerce and trade.
South African public sector unions on Tuesday rejected a revised government wage offer and said they planned a mass strike from Wednesday that will bring public services to a halt.
Analysts, however, expect a deal to be reached before the strike commences.
There is pressure on both sides to reach a deal.
A one-day strike last week did little to hurt the economy. Union sources said there are cracks in the labour coalition, with some groups looking favourably on the latest offer. This could diminish the impact of any potential strike.
The ANC has a long-standing alliance with unions forged in the fight to end apartheid and has often struck deals tilted in their favour so as not to lose votes from a traditional base.
But the government has also said it cannot afford the demands, adding it will be forced to cut spending elsewhere. This could erode support for President Jacob Zuma's government, which has already faced protests from the poor who say it has not done enough to supply them with electricity, running water and better schools.
A mid-grade public sector employee makes on average R8 800 a month in salary and benefits, above the national average wage of R6 383, according to government figures.
"From tomorrow there will be a total shutdown and the beginning of a protracted strike and we will only stop when government responds," said Thobile Ntola, president of the South African Democratic Teachers Union (Sadtu), a part of the labour coalition.
The strike threat by unions in the country's largest umbrella labour group Cosatu increases pressure on the government to improve its terms or risk what could be the worst strike by state workers for three years.
Economists worry that whatever deal is reached will swell state spending as the government tries to bring its deficit down from 6.7% of gross domestic product.
Last week the government offered to increase the monthly housing allowance to R700 from a previous offer of R630, but refused to increase its wage rise offer of 7%.
The housing allowance alone would be equal to about 1% of government spending.
The unions are demanding an 8.6% pay rise, more than double the inflation rate, and R1 000 for housing.