SA’s recovery plan needs to focus on disadvantaged communities in order to make an impact
This week, the South African government, in conjunction with the National Economic Development and Labour Council (NEDLAC) will host the Jobs Summit on Thursday and Friday.
In February this year, after ousting former president Jacob Zuma, president Cyril Ramaphosa delivered his first State of the Nation Address where he said young South Africans would be moved to the center of the country’s economic agenda.
In that address, he alluded to how young people in South Africa are already forming a greater proportion of the labour force on the country’s infrastructure projects and are the primary beneficiaries of various programmes. He maintained that the economy was continuing to draw young people in far greater numbers into productive economic activity through various initiatives such as the Employment Tax Incentive.
However, the smart move by the president was ensuring that the economic stimulus and recovery plan announced recently puts the agricultural sector at the center of the country’s new path of growth, employment, and transformation. The move was smart because the country is currently grappling with a land reform crisis where expropriation without compensation is at the center of our national discourse.
The R400 billion economic stimulus package will be re-prioritized in the existing three-year budget cycle and spent on investment in infrastructure.
Looking at what the president said in his build up to announcing the Jobs Summit all the way back in February, it is important to highlight that currently, 68 percent of individuals under the age of 25 in South Africa are unemployed while close to 40 percent of individuals between the ages of 25 and 34 years are also unemployed.
The figures are even shockingly worse for black women where the expanded unemployment rate was even higher and increased from 30.9 percentage points in 2008 to 37.2 percentage points in 2018. Throughout this period, both of these rates were higher amongst women than men.
According to government statistics released in August this year, the rate of unemployment amongst women was 29.5 percent in the second quarter of 2018 compared with 25.3 percent amongst men, leaving the the rate of unemployment amongst women at 7.5 percentage points higher than that of males.
Data from Stats SA’s Quarterly Employment Statistics (QES) survey shows that the total number of jobs reported in the second quarter showed a decrease of 69 000, bringing the total number of persons employed in the formal non-agricultural sector of South Africa to just under 10 million.
Industries such as mining, manufacturing and transport are continuing to bleed the economy dry, which is evidenced on how the South African economy has contracted to levels last seen in 2009 which has subsequently thrown the nation into a technical recession that has further squeezed consumers through increases in Value Added Tax, petrol and escalating costs of basic necessities and staple food price items.
Not only do these figures and scenarios highlight a national crisis in the jobs sector and the broader economy but it also highlights an even bleaker picture that paints a very dark future for South Africa. Both the private sector, the public sector and organised labour to a certain degree have been complicit in driving the South African economy to the brink of disaster where young people in our communities still find themselves at the margins of lucrative economic prosperity and employment opportunities.
The current Jobs Summit, with all its good intentions may very well fall under the ambit of what some scholars call “disaster capitalism”. The term was coined by Naomi Klein in her book titled: The Shock Doctrine, where she explains how power profits from disaster.
If one looks at SA’s economic trends since the global financial crisis of 2008, there has been steady growth in the financial markets where many of the top companies listed on the Johannesburg Stock Exchange have been operating at a profit, growing exponentially. There have been a few exceptions, however but with solid turnaround strategies many companies that have taken a knock during the economic down turn have managed to bounce back, earning billions for private equity fund managers.
Yet one problem that prevails; is that growth for companies in the private sector does not necessarily translate to more employment or growth opportunities for people where these major conglomerates rake in their billions.
On the other side of the spectrum, government has managed to also reach significant levels of growth where tax revenue collection is at an all time high, despite a shortfall on some of the targets that had been set under previous administrations.
Yet, the burden towards ensuring economic growth, particularly youth employment remains the burden of government and not the private sector in South Africa. We find ourselves in a position where the private sector would rather employ minimal people, stretch the work and sit on hard cold cash that could be invested in various initiatives in our communities that can pull our people out of the economic doldrums.
That question that will be high the government’s agenda at the Job Summit is: How do you create more jobs and stimulate the economy when plans are in place to retrench close to 30 000 workers in the public sector, which is one of the largest employers in the South African economic landscape?
Even organised labour in South Africa at some point alluded to the fact that the private sector is sitting on close to a trillion-rand worth of stockpiles of cash that is only benefiting a select few.
As SA, under Ramaphosa’s administration finds itself embarking on an investment overdrive in order to stimulate economic growth, at the core of the of the problem is how the president will ensure that SA’s economic stimulus and recovery package moves towards benefiting the people instead of “stimulating” what some may perceive as an ineffective private sector that has turned South Africa into a consumerist economy where only a select few stand to benefit while the majority continue to be side-lined on a daily basis.
Ayanda Mdluli is the Group Opinion and Investigations Editor at Independent Media