The latest critical skills list from the government is dovetailing into the state’s plans to boost the economy.
There are no longer any doubts that South Africa’s labour market is suffering from a chronic shortage of critical skills, killing any prospects that our country could develop into a fast-growing, middle-income economy.
SA is also home to probably the world’s most militant and strike-prone labour that always keep investors and capitalists on tenterhooks. Only the toughest capitalists stick it out and those that cannot take it anymore, exit the SA market to look for better investment returns elsewhere, where labour is placid and demands less pay.
The scarcity of critical skills and our strike-prone labour are often listed by investors and financial pundits as some of the biggest contributors to SA’s anaemic economic growth. The government has not found a policy cure for our low-growth problem since the collapse of the US housing market in 2008, which dragged the global economy into a recession.
For now, the government does not appear to have a solution to reducing or ending labour strikes and therefore the problem will persist. However, it is looking to plug the critical skills hole through importing skilled foreign labour as our vocational or technical education institutions and universities have been unable to grow critical skills in the short-term at home.
The Department of Home Affairs (DHA) recently published a revised critical skills list (CSL) and invited members of the public and interested organisations to submit written comments on the technical report by 31 March.
After the public engagement has been done with, the CSL will probably be refined before it is gazetted, as required by the legislation.
The CSL is contained in a 132-page report, titled “A Technical Report for the 2020 Critical Skills List”, authored by two researchers, Michele Capazario and Fouche Venter.
According to DHA’s definition, critical skills are “high-level skills” that are critical for improvement in economic growth and without which certain projects and work cannot be undertaken. The department, which is the custodian of the CSL, will then issue critical skills work permits or visas to foreign workers wishing to provide critical skills to SA.
The old list, gazetted in 2014, contains 159 skills compared with the revised draft list (2020), which has 125skills. Given that the revised CSL is shorter than the old CSL, this could mean that SA is succeeding in domestically producing the skills it previously did not have, or the market no longer requires some of the skills, due to technological advancements.
This has intensified competition for scarce economic and employment opportunities between locals and foreigners.
With the CSL, the government will have to strike a delicate balance between offering critical skills work permits to skilled foreigners, while simultaneously protecting domestic workers.
If government offers permits too liberally, it risks taking employment opportunities away from locals. The same is true, if the permits are strictly withheld, the critical skills shortage will worsen, damaging the SA economy even further.
The trick is to accurately identify the skills that the country needs in relation to skills that must be imported to ramp up production and growth in our economy.
In 2020, the economy was battered by the Covid-19 pandemic as government implemented hard lockdowns to slow down or prevent the transmission of the virus. Unfortunately, the lockdowns resulted in staff layoffs, business closures, and pushed the economy to contract by 7.2% last year.
By the end of 2020, there were 1.35 million fewer people employed than there were in the first quarter, before the pandemic unleashed havoc.
Since then, the economy has been slowly on the mend. An upbeat Finance MinisterTito Mboweni, who delivered the 2021 budget speech last month, expects the economy to rebound by 3.3% this year, after which it is forecasted to grow at an average of 1.9% in 2022 and 2023.
In the short term, this recovery will be spearheaded by the rollout of Covid-19 vaccines as the impact of loosening the lockdowns helps in turning the economy around.
In the long term, the government is pinning its hopes to stimulate the economy on President Cyril Ramaphosa’s pet project, the Economic Reconstruction and Recovery Plan.
The plan is anchored on the implementation of economic reforms by government, such as infrastructure rollout, ramping up of local production, employment creation, and expansion of energy generation capacity.
The revision of the CSL to attract skilled foreign workers dovetails nicely with the economic reforms and will add value in stimulating our economy and labour market.
So far, the updated CSL list has been warmly received by the business community with no social
media noise coming from the supporters of the popular #PutSouthAfricansFirst movement, whose detractors accuse it of xenophobic and anti-foreign sentiments.
I suspect the authors of the technical report have done irrefutable and impeccable research that cannot be easily challenged. It is also possible that they are carefully studying the report and CSL before weighing in.