News24

SA must create jobs - Minister

2010-03-05 22:36

Johannesburg - Creating more jobs was South Africa's most critical challenge Deputy Minister of Finance Nhlanhla Nene said in Johannesburg on Friday.

"There are far too many South Africans that do not work, with the bulk of the gains in national income inevitably going to those who are employed," he said in a speech prepared for delivery at a breakfast discussion forum in Maponya Mall in Soweto.

He said that without higher growth and more inclusive growth, SA was not likely to address the high levels of poverty and inequality which persisted 16 years into democracy.

"Over time, South Africa's firms and factories, corporates and service providers, must absorb more labour, and include more people in economic activity."

Nene said the most significant rule of the game was that SA needed a more labour-absorbing growth path.

More competitive


"Making the economy more labour-absorptive will require raising productivity, boosting exports and promoting greater levels of savings and investment.

"India, China, Vietnam and Brazil, for example, are taking active steps to improve their competitiveness."

Nene said SA had to take steps to become more competitive.

"We cannot be left behind."

In developing a new growth path, progress also needed to be made in developing sectoral plans to raise employment and output.

"For example, South Africa needs a strategy to raise agricultural output, which will have positive benefits for rural employment.

"Similarly, a plan that removes obstacles to mining investment and exports could boost output and support job creation."

Public spending

The deputy minister said South Africa's large budget deficit had to be reduced gradually.

"Ensuring an orderly decline in the budget deficit will require a more moderate growth in public spending."

He said part of South Africa's success over the last decade could be attributed to "the stabilising influence of the Reserve Bank’s inflation targeting policy".

"This policy will remain in place, although we will establish and maintain an open dialogue on this policy stance with our social partners."