We must overcome the scourge of unemployment in South Africa


We must focus on accelerating economic growth so that through investment a sufficient number of jobs can be created to begin reducing unemployment in general, and youth unemployment in particular, writes Ronald Lamola.

Twenty-five years after achieving our political freedom and democracy in 1994, South Africa's high unemployment rate continues to haunt the country. Millions of people continue to be unemployed with little hope of ever finding a job and the rate of unemployment among the black youth in particular remains unacceptably high.

The total number of people employed in South Africa's formal and informal sectors has grown from around 9 million in 1994 to over 16 million currently. But the increase in the number of jobs has not kept pace with the growing size of our labour force, leading to the strange situation where during our years of freedom we have experienced increases in the number of those employed and the number unemployed at the same time. 

In other words, we have created millions of jobs since 1994, but the rate of job creation has not kept pace with the growing size of the labour force.

There is only one sustainable solution to this problem: we need to focus on accelerating the rate of economic growth so that through new growth and investment a sufficient number of jobs can be created to begin reducing unemployment in general, and youth unemployment in particular.

How do we begin to grow South Africa more effectively and more inclusively?

Firstly, we need to put an end to the scourge of corruption that has re-purposed and eroded our public and private institutions in recent years.

Secondly, we need to return to our vision of building a developmental state capable of changing the unequal structure of our society.

Thirdly, we need to improve our basic and higher education outcomes to ensure that our young people are acquiring the right kind of skills that will enable them to work effectively and compete in a global economy that is undergoing a skills revolution.

Fourthly, we need to restore confidence and hope in the future of South Africa. Through detailed and extensive engagements, such as last year's Presidential Job Summit and South African Investment Conference, we need business, government and labour to unite behind a common programme to accelerate inclusive economic growth and expanded investment in South Africa's future.

Fifthly, we need to implement policies that will remove obstacles to job-creating investment and promote structural reforms in key sectors of our economy, such as mining, telecommunications, tourism, automotive and agro-processing.

Expand manufacturing sector

Guided by these objectives there are a wide range of useful instruments that can assist in accelerating economic growth and job creation. For example, we must focus our successful industrial incentive schemes, special economic zones and black industrialists programme to expand the country's manufacturing sector. We must increase the designation of products that are locally produced, expand the Buy Local Campaign, and forge partnerships with the retail sector to support local industries. We must expand youth internship programmes, such as the Youth Employment Service (YES), to ensure young people get work experience. We must increase youth participation in public employment programmes.

While there must be a high degree of urgency in addressing our country's most painful related problems of unemployment and inequality, it is vital that the transformation policies that we pursue should be economically sound and sustainable. It would be counter-productive to pursue policies that resulted in a collapse in growth and investment and, thus, served to increase unemployment and poverty.  Populist polices that simply sound radical will not work, we need true radical policies that will actually improve the lives of our people.

For example, with regard to land redistribution, it is indisputable that historical land dispossession is a major source of racial inequality in the South African economy. For this reason, accelerated land redistribution is essential, including in appropriate circumstances through expropriation of land without compensation, but this must be done in a manner that stimulates economic growth and investment. We must not allow chaotic or disorderly processes, or land grabs, which would threaten food security or overall investment in, and growth of, the South African economy.

Similarly, at the level of macroeconomic policy we need to take decisive steps to ensure that our country does not slip further into national debt. We will not be able to build an effective developmental state, capable of ridding our economic structure of the vestiges of colonialism and apartheid, if we are forever sinking deeper into debt.

Overall, it is imperative that we accelerate investment and economic growth so that we can begin to create enough jobs to bring down our unemployment rate to allow hundreds of thousands of young people currently without employment to enter the job market.

We can achieve the goal of massively increased employment by working together to build an effective developmental state, by developing a common vision among representatives of labour, business and government, and by radically lifting investment levels across a range of key economic sectors.

We will only succeed in creating a better life for all, if we can unleash pro-growth, pro-investment policies that will see the creation millions of new jobs across a wide range of economic sectors.

- Ronald Lamola is a member of the ANC NEC.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24. 

,election 2019

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