City loses 2 000 jobs

2018-04-09 16:15
A familiar sight on the streets of Pietermaritzburg: unemployed people advertising their skills in the hopes of work.

A familiar sight on the streets of Pietermaritzburg: unemployed people advertising their skills in the hopes of work. (Ian Carbutt)

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At least 2 000 people have lost their jobs around Pietermaritzburg due to companies closing down or downsizing since November.

Pietermaritzburg Chamber of Business (PCB) chief executive Melanie Veness said the factories are most affected because companies are starting to find it difficult to run successful businesses in the region.

“We’ve had several big companies closing down but the increase in job losses has been as a result of the run-off, because the suppliers also either closed down or have to shed jobs after losing their big clients,” she said.

Some of the local companies that recently closed their doors include Interpak Books, BSI Steel and several restaurants. However, Veness said there are several others that are on business rescue.

“The industries are the ones that are struggling the most. They are also a massive employer of people, so when you lose one factory, you lose 450 jobs or 1 000. We have a huge amount of risk in that space and we’ve got to help them stay competitive because you can’t recoup those jobs once they are lost,” she said.

The slow growth of South Africa’s economy, which is estimated to be below one percent, and the high inflation are some of the driving factors. She said while the SA inflation is between five and six percent, in other countries it is between two and three percent per annum.

“All our costs are going up but the economy is not and companies still have to compete on the international market, but they can’t add to their pricing to increase the turnover otherwise they risk pushing themselves out of the market so it becomes harder and harder to accommodate the additional costs.

“So something’s got to give and unfortunately in a transaction it lands up being people because companies in the private sector have to operate on such knife-edge margins,” said Veness.

She said that is the reason the PCB is fighting against Msunduzi’s proposed 14,3% water tariff increase because it will cripple the local businesses.

“Some businesses are either going to close down or retrench people because water will become unaffordable. Last year, we faced a 15% increase from Msunduzi on water tariffs that were already marked up between 353% and 462%. The compound effect of this is significant,” she said.

Veness said Pietermaritzburg is also plagued with urban decay as well as unreliable supply of even the basic services such as water and electricity. She said power outages and water shortages are making it hard for factories to operate.

“When there are power outages the factories lose production and sometimes the equipment is damaged and that can take time to repair because some of the equipment they are using is imported.”

She said one of the things that used to be advantageous about SA was its low energy costs but those have since gone up. Veness said the local municipalities need to start by getting the basics right by making sure that the capacity on the electricity grid can take on additional load.

She said they also need to come up with incentive packages to attract investment to the region. She added that there should also be policies that are geared towards ensuring that the businesses that are in the area do not pack up and move to other parts of the country. “We also need piped gas on the N3 corridor because that opens up a whole lot of advantages for us because it attracts industries that are energy intensive because we are right here near the port, but we still need to provide the infrastructure that supports the investment in the city,” said Veness.

Cosatu regional co-ordinator Zimasile Giyama, echoed Veness’s sentiments saying many of the job losses were as a result of failure of local municipalities to provide a conducive environment for businesses to operate.

“Two municipalities under uMgungundlovu received qualified audit opinions and Msunduzi received a disclaimer. This instability creates panic among business people and they start leaving.

“Those 2 000 job losses will be a drop in the ocean if they do not recall the executive of Msunduzi and place the municipality under administration. If Msunduzi coughs, the whole of uMgungundlovu District catches the flu because Msunduzi is the richest in the district,” he said.

Giyama said some businesses had closed down in Msunduzi because they were harassed by vagrants.

Recently retrenched Mduduzi Dlamini said he had expected to lose his job because the company he worked for was in a bad financial state in the last couple of months.

The 37-year-old father of four from Thornville said retrenchment was a double blow for his family because his brother was also retrenched last year.

“It’s going to be very difficult for my family because my brother also lost his job last year. Right now I just want to move on and get back into the workplace as soon as possible.”

He said although he was running an informal business on the side making carports, the profit made will not be enough to put food on the table and also send his children to school.

Jabu Mncube* (not her real name) is also among employees in the city who were affected by retrenchments.

Although Mncube has started identifying alternative employment opportunities she has not received any potential offers.

“I don’t know how I’m going to manage the coming months financially. I have to pay schools fees, monthly transport fees and pay for rent.”

Mncube, who rents a flat in the CBD said without an income for her monthly expenditures, she may be forced to move back home to Elandskop.

“I’ve considered moving but it’s the middle of the year and it will be an inconvenience for my children because they attend schools in Pietermaritzburg,” she said.

Read more on:    pietermaritzburg  |  job losses

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