The Congress of South African Trade Unions has noted the recent reports by Statistics South Africa that South Africa’s official unemployment rate rose 0.4 percentage points to a record 35.3% in the fourth quarter of last year. The expanded definition of unemployment is sitting at 46.2 %. There is a real danger that it may rise in the next quarter as the war in Ukraine unfolds and the global oil and domestic fuel prices skyrocket.
This is very alarming because it means that in no time about 50% of people in the working-age population will be officially unemployed. The government’s decision to suffocate the economy by implementing a framework of economic policies that do not place employment creation as a priority but is geared at reducing the budget deficit and containing the debt burden has backfired.
The Federation is disappointed by the timid response from the government in resolving some of the most critical issues bedeviling the nation. The problem of load-shedding has left the economy bleeding, and it is disappointing that the government has failed to offer leadership on this urgent and critical issue.
The nation needs serious political leadership on what needs to be done short-term to fix the energy crisis. The price of fuel has been rising exponentially and so far, there is no solid intervention from the government to solve this problem.
The fuel price increases and the ongoing load shedding have created more hardship for the working class that is already suffering from high levels of unemployment and stagnant or declining real wages.
The country needs a more stable and affordable electricity tariff regime conducive to industrial and economic growth. Eskom is the lifeline for this economy and there cannot be an economic recovery without an efficient and stable Eskom.
Eskom’s situation will worsen with the rise in fuel prices as it depends upon diesel to offset load shedding. We must now finalise Eskom’s debt relief package so that its unhealthy dependence on double-digit tariff hikes can end and it is enabled to focus on ramping up maintenance and expanding generation capacity.
The government needs to Intervene now to save Transnet and Metro Rail. An efficient Transnet will get our mining, manufacturing, and agricultural products to their markets on time, helping to save and create jobs in those sectors. A revived Metro Rail will get 10 million workers to work on time and off our roads. This will boost economic productivity and lessen our dependence on petrol.
Investing in additional personnel and resources for SARS will enable it to ramp up customs duties’ enforcement. This will not only generate badly needed revenue for the state but also help protect local manufacturing jobs.
The Presidential Employment Stimulus funding needs to be doubled to R30 billion to help create 1 million job opportunities for young people.
Our education system also needs to be responsive and equip young people with the necessary skills to be competitive. Without urgent and targeted action to manage the near-term transition and build a workforce with futureproof skills, we are likely to continue to cope with ever-growing unemployment and inequality.
But creating skills alone will not fix unemployment, the country needs many young people to also be job creators and get involved in entrepreneurship. Programmes or interventions to improve labour-force skills can be effective in urban regions or in intermediate regions but have little impact in rural areas where take-up rates are low.
Entrepreneurship is only possible if the government can solve some of the problems facing
small businesses like the lack of funding. Young people are rarely targeted with subsidised credit, and they are not well served by the formal sector financial institutions.
By becoming so profit-seeking, micro-lending institutions have also contributed to the marginalisation of young people as they resorted to charging high-interest rates and demanding collateral security for informal financing. The solution is to fix the National Youth Development Agency (NYDA) and ensure that its funds go to young people seeking to set up their own businesses.
Banks need to be engaged to provide affordable and accessible credit to young people wanting to set up their own businesses. The R35 billion in state financing for SMMEs must be provided on conditions that are affordable for SMMEs. There is also a need for the development of non-banking and not-for-profit financial institutions which can reduce lending costs to young people.
The Federation also wants the public procurement system to be overhauled so that there is a single open, online system for the entire state. This will make it easier to monitor and ensure that it favours local procurement and prioritises young entrepreneurs. The Trade and Industry’s Sectoral Master Plans need to be reinforced to get those sectors of the economy moving and require them to prioritise youth employment.
Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson)
Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794