President Cyril Ramaphosa acknowledged that South Africa will not be able to reach the goal of reducing the unemployment rate to 6% by 2030 as outlined in the National Development Plan unless the country did something “extraordinary”.
Ramaphosa was addressing government, business, labour and community organisations at the start of the two-day Jobs Summit on Thursday at the Gallagher Convention Centre in Midrand.
The summit is meant to bring stakeholders together to devise a coordinated framework to tackle unemployment.
The different social roleplayers signed a framework agreement designed to create an additional 275 000 direct jobs a year. This is over and above the jobs that would have been created in the economy without these interventions — on average about 300 000 a year.
South Africa’s unemployment rate rose to 27.2% of the labour force in the second quarter of the year. The rate of unemployment amongst the youth was at 38.8% compared to 17.9% for adults.
A critical part of the framework agreement would be efforts to retain current jobs while creating new jobs, said Ramaphosa.
“All social partners have committed themselves to concrete steps to avoid retrenchments and support struggling companies,” he added.
Ramaphosa also mentioned that the business labour and community social partners had agreed to revive and improve the training layoff scheme which was introduced in response to the 2008 global crisis.
Agriculture and manufacturing
Ramaphosa also said the framework had plans to promote more local procurement and exports to create jobs.
“This is the time to put South Africa first,” said Ramaphosa to a room of applause.
“This we say, not in an arrogant way like it is said elsewhere. We say it with deep feeling that when it comes to buying local that is where we want to put our country first”
“If we do not buy the food that comes out of South African soil, there will be no farms and no farm workers. If we do not buy the goods made by South African hands, there will be no factories and no workers.
“The most direct way for South Africans and South African companies to create jobs is to buy only South African products,” he said.
The government will speed up the process of designating products for local procurement and already has companies who have committed to buy local as part of their operations.
These companies who are part of what is called a “Buy SA Circle” include Adcock Ingram, AngloGold Ashanti, Clientele, Coca-Cola SA, Edcon, FirstRand, Lixil, Mondi, Nandos, Nestle, AB InBev, Sappi, Sasol, Standard Bank and Tsogo Sun.
The new framework will also focus on funnelling more investment into the manufacturing and agricultural sectors which are seen as having greater potential for creating jobs.
When the country slipped into a recession last month agriculture was one of the biggest contributors to the drop in economic growth with a production decline of 29.2%
New hectares owned by black people will be procured particularly for women farmers, producers and processors through the government’s accelerated land reform programme.
The financial sector will invest R100-billion over five years in the manufacturing sector, with the money being ring-fenced for black-owned industrial enterprises.
Youth skills development
On youth unemployment, Ramaphosa made a commitment to deal with skills shortage amongst the youth saying, “the issue of a lack of experience should be done away with”.
There will be a focus on the development of the technical skills that are required in the industrial economy. Companies have pledged to form partnerships with TVET colleges in their communities where they will offer practical work experience on top of the theoretical learning at the colleges
“This is part of a series of initiatives supported through the framework agreement to ensure that graduates are absorbed into the economy”.
“Effective skills development on a large scale will not only help to expand the opportunities and capabilities of young people but will also assist in reducing the wage gap between the lowest and highest paid due to skills scarcities,” said Ramaphosa.
Speaking on behalf of organised business, Sipho Pityana — the president of Business Unity South Africa — said the disruption of labour by digitisation and the fourth industrial revolution had not been addressed enough and raised concern with the exclusion of young people at the Summit.
Pityana said the future of South Africa, which has a largely low-skilled population, is likely to be impacted by automation, artificial intelligence and robotics and this had already happened in labour-intensive sectors at “dazzling speed”.
“These seismic-technological changes stand to disrupt our labour market and change methods and types of jobs required by the economy. We know that this Summit doesn’t address this in any systematic and meaningful way,” he said.
“It’s our mistake that we often reflect on these challenges of the digital era, without the digital generation leading the charge. We must rediscover the value of the young in the redefinition of our future. The grey hair — or lack of any hair at all — at this gathering is not, I say this with all due respect, equipped to define a radical path for the digital era.”
Pityana said: “If we fail to prepare in anticipation of these disruptions, our current unemployment problems will soon seem like prosperity in comparison with the employment calamity we’ll face”.