The Congress of South African Trade Unions has noted the latest quarterly employment statistics that show that unemployment has increased by 1,7 percentage points to 32.5% in the fourth quarter of 2020. These appalling and scandalous numbers are the highest on record in this country. In reality, more than 50% of working-age people are unemployed in South Africa. This dire economic situation reflects a lack of vision and decisive leadership.
This calamitous socioeconomic crisis that is currently engulfing South Africa can be attributed to the misguided macroeconomic policy framework that has been implemented over the years, especially over the last twelve months. The Federation has long lamented the de facto control of economic policy by Treasury. This is the price that workers are paying for this failure by the government.
The National Treasury adopted an austerity strategy that was geared towards containing public-debt and reducing the budget deficit, instead of achieving structural economic transformation through diversifying and building the productive capacity of the economy.
It is unacceptable that no one has been held accountable for this calamitous mismanagement of the economy. This calls into question the efficacy of the monitoring and evolution of government departments by the Presidency. This lack of accountability is unacceptable.
COSATU did warn that the fiscal framework that is centered on austerity that was outlined and adopted in the 2020 Budget speech was going to plunge the economy into a deep depression and destroy jobs. The Federation calls for the review of the macroeconomic framework to align it with the commitments of the ANC manifesto in order to address the basic needs of our people, transform the economy, strengthen the public service, renew efforts to build a capable developmental state and address the triple challenges of unemployment, poverty, and inequalities in our society.
The latest round of electricity cuts that began in December have worsened an already bad situation. Fixing the power utility, Eskom, should be treated as a priority.
The spectacular failure of the Loan Guarantee Scheme was a reminder that solving this economic crisis alone cannot be left at the hands of the private sector. Government and the banks must go back to the drawing board to increase the uptake of the scheme. We need a people-centered economic development strategy to get out of this economic quagmire. This needs to be resolved as soon as possible. The national budget should be targeted at promoting investment in rural areas and townships because economies are made up of people.
The government needs to reduce the red-tape and improve coordination between government agencies and departments that are supposed to help SMMEs. An increase in the number of start-up businesses will go a long way to solve unemployment and economic stagnation.
COSATU reiterates its position that in addition to targeting employment, the Reserve Bank should align its policy to industrial development, introduce foreign exchange controls, and impose quantitative controls on commercial banks to ensure that a quarter of their loans go to priority sectors that drive the growth path and create jobs on a larger scale.
Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson)
Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794