In the years leading up to the pandemic, chronically high unemployment had already begun eroding South Africa’s economic position.
Now, post-pandemic, record-high unemployment seems an impenetrable barrier to economic recovery. While the government has implemented several measures in an attempt to overcome the unemployment crisis, policy-makers need to “think bigger” and be far more ambitious in expanding both public employment programmes and support for private sector job creation if these initiatives are to make a tangible difference.
This is the opinion of Andrew Donaldson, the former deputy-director general of the National Treasury. His commentary formed part of a discussion facilitated by journalist, Alishia Seckham as part of PSG’s Think Big series of webinars.
Donaldson is currently a senior research associate of the Southern Africa Labour and Development Research Unit at the University of Cape Town. In reference to initiatives like The Expanded Public Works Programme and Ramaphosa’s Presidential Employment Stimulus Programme, Donaldson commented that: “The state should not be thinking of job creation initiatives as temporary. If they are to make any kind of lasting impact, these programmes need to become permanent elements of our approach to raising living standards and investing in the socioeconomic fabric of the country.”
This particular webinar, which focused on the future of employment in South Africa, saw a number of hard-hitting questions being posed, one of which centred on whether government should be concentrating its efforts on creating an enabling environment for business rather than on job creation. For Donaldson, higher investment and growth are imperative, but job creation has to come from both the public and the private sectors. “The youth employment incentive is not enough. The tax subsidy should be extended to all labour-intensive industries and low wage earners, not just young first-time work-seekers.”
He elaborated: “To talk to the issue of supporting the South African business environment is to cast the net wide. The reality is that ‘business’ is not a homogenous subject – in South Africa, due to the prevailing inequalities, the topic of ‘business’ extends from well-established commercial enterprises who have thrived for decades, to the emerging township economy, the economies that exist within informal settlements and accessibility issues that affect rural communities. The bottom line is that the South African government needs to invest in cultivating opportunities for work across the entire economy.”
Furthering his argument that employment development programmes need to become permanent fixtures on the country’s socioeconomic landscape, Donaldson made reference to the relative efficacy of the President’s Employment Stimulus Programme which in 6 months achieved more success than that of preceding public employment programmes. The solution therefore, is to scale-up where institutional capacity is in place. “We cannot employ temporary solutions to permanent problems,” said Donaldson in reference to the fact that the unemployment crisis has plagued South Africa for decades.
“The President’s Stimulus Programme placed South Africans in schools across the country as assistants and workers in various capacities. Now, we need to take this same approach and apply it to sectors such as the healthcare industry, crime prevention, securities on our rail system and in municipalities. In tandem with these kinds of efforts, we need to keep building our education system to address the skills shortage as a longer term solution. In other words, we need to act with both the short- and long-term in mind – a two-pronged approach to the crisis,” explained Donaldson.
He added that the reality of the South African situation necessitates a ‘back-to-basics’ approach. “We need to renew our focus on the areas of service delivery and basic infrastructure that we have known how to do for 100 years. Municipal infrastructure, housing, transport and water services don’t need new technologies or innovation, they investment spending and long-term cost recovery from users. To do this, we need to cement public-private partnerships to inject much-needed funding into these areas. Ultimately, we need to invest in the infrastructure that can support labour-intensive industries.”
The debate made it clear that the solutions to the unemployment crisis, which is particularly rife amongst the youth of South Africa, will not be found within state policy alone. Instead, it will require a collective effort from the public and private sectors as well as civil society at large.