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Job creation is South Africa’s top priority for a peaceful future

This article first appeared in Engineering News. 11 October 2019.


A poisonous thread links the violence that has broken out sporadically in South Africa in recent months, from truck-burning in KwaZulu-Natal to gang warfare in Cape Town, xenophobic attacks in Johannesburg and service delivery protests across the country. That thread is South Africa’s record unemployment levels.


Joblessness is not the direct cause of any of the violent outbreaks, but the desperation of the jobless is fertile ground for discontent. It might factor into the country’s horrific crime levels too.


That is why economic growth and job creation must be the number one priority for every government department, elevated above all other considerations.


The urgent need for jobs is recognised in Finance Minister Tito Mboweni’s latest economic policy paper. It was emphasised in President Ramaphosa’s opening of parliament this year, when he promised the creation of more than two million jobs over the next decade. It has been highlighted in four jobs summits over the past 20 years.


And still unemployment keeps rising, with a net increase every year despite job-creation efforts. Millions of school leavers and graduates have no hope of getting a job, families and communities cannot feed themselves and youngsters roam the streets with nothing to do. It is easy to become numb to the facts, but let’s consider the staggering figures: 29% of South Africans are unemployed; approaching 40% if you include those who have given up looking for a job. Youth unemployment – probably a key factor in recent disturbances – is reaching 40%. A minimum of 6.7 million people are without work, including millions of increasingly desperate young people.


Multiple government plans have promised millions of jobs. So far, all have failed. The Treasury document released by Mboweni aims to raise economic growth by two to three percentage points and create up to a million jobs. It too will fail unless government decides that nothing is more important.


Job-creation and labour absorption must become government’s overriding focus, because of the implications for our future if unemployment keeps rising. Decades ago economists calculated that the country needed a 5% economic growth rate to absorb the annual increase in job-seekers, and 8% to start eating into the backlog. Neither has happened – GDP growth is languishing below 1% and the crime and social unrest of which we were warned is erupting in isolated but violent incidents.


It is not too late to turn the tide, but doing so will take a massive effort from President Ramaphosa’s government, and active support from labour and business. That means a focus on jobs to the exclusion of almost everything else.


While Minister Mboweni looks for medium-term and longer-term economic growth to stimulate job creation, there are some quick wins on which government should focus without delay.


FairPlay has repeatedly pointed to the job-creation and labour absorption potential of the chicken industry, particularly in poverty-stricken rural areas, if it is protected from dumped imports and predatory trade, and Minister Mboweni sees potential across the agricultural sector. There are other industries such as tourism and textiles where jobs can be created fairly rapidly, of which Minister Mboweni and Trade and Industry Minister Ebrahim Patel will be aware.


The 2018 jobs summit produced a framework agreement committing government, business and labour to a variety of actions to create and save jobs. It included a lengthy and detailed list of the potential for job creation and the obstacles to be overcome.


Last month, Mboweni’s economic policy document highlighted five fundamental building blocks of sustainable long-run growth, including prioritising labour-intensive growth in agriculture and services.


The government is aware of the issues, and has research and analysis of the means to address unemployment, both immediately and over the longer term. It has job-creation strategies, lists of projects and schemes to attract investment, start new businesses and expand production in existing ones. These cannot be pushed aside for other objectives – as local and international headlines about South Africa have shown in recent weeks, these plans have to be the priority for implementation now.


It is going to be up to President Ramaphosa, and his job-creation ministers Tito Mboweni and Ebrahim Patel, to bring new urgency to the longstanding need to stop the rise in unemployment and bring hope to the jobless.


If South Africa is to have a stable and peaceful future, nothing can be more important.


Written by FairPlay founder, Francois Baird.


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