President Cyril Ramaphosa said in his latest newsletter, released on Monday morning, that government would work to draw investment in catalytic infrastructure projects, while urging business to continue investing in South Africa as retrenchment season began.
The Covid-19 pandemic, which arrived on South African shores in late March, prompted a national lockdown in April to stem the spread of the virus. This rocked an economy already in recession.
In April the International Labour Organisation predicted global formal job losses of about 305 million and an estimated loss of 1.6 billion jobs in the informal economy. Ramaphosa's newsletter comes ahead of Minister of Finance Tito Mboweni's supplementary budget to be submitted on Wednesday.
Former South African Airways board member and former Rothschild & Sons chair Martin Kingston said in May that the economic quandary South Africa was in was so bad that 1 million people could be added to the unemployment line this year.
The newsletter also comes ahead of the first Sustainable Infrastructure Development Symposium, which is set to take place on Tuesday.
Ramaphosa said government was seeking sponsorship from the private sector for a number of catalytic infrastructure projects in water, transportation, energy, digital infrastructure, human settlements and agriculture. He said these would be showcased at the symposium.
He pointed out that last week that e-commerce giant, Amazon, announced a drive to hire 3 000 South Africans, calling it "a welcome signal". Energy storage company Metair also secured contracts from Ford Motor Company and Africa Data Centres has acquired a data centre in Johannesburg.
Ramaphosa said it was imperative that the South African economy prioritise opening avenues for self-employment and entrepreneurship, especially for young people, as multitudes of formal jobs would be lost.
"As more economic activity resumes, struggling businesses will be 'playing catch-up' to recoup lost productivity and revenue for some time to come. As much as we seek to protect current jobs, we also need to create new ones, and attract new, greater levels of investment," Ramaphosa said.
Ramaphosa said a number of companies had already announced plans to retrench staff last week but urged that investors that committed to deepening their investment in the country continue to do so if they could.
"From aviation to construction, from entertainment and leisure to hospitality, companies have indicated their intention to retrench staff because of heavy losses incurred over the past three months," Ramaphosa wrote.
He urged the business community and international investors to honour the investment commitments they made over the past two years in a number of forums, including the South Africa Investment Conference in November.
"The measures we put in place to protect local businesses during the lockdown in the form of loans, tax relief, debt restructuring, extended credit lines and retail rental exemptions are continuing to provide vital support," he said.
Minister of Employment and Labour Thulas Nxesi told Parliament in May that the department managed to assist more than 2.5 million workers to receive protection benefits worth more than R3 billion.
The Congress of South African Trade Unions parliamentary liaison officer Matthew Parks said he wanted government to reconfigure the South African economy and address its systemic inequalities. The labour federation wanted Mboweni to unveil an audacious response to the economic crisis.