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High impact

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High impact

12th July 2019

By: Terence Creamer
Creamer Media Editor

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Britain’s got Brexit, America has Trump and South Africa’s got corruption. When such powerful single-issue themes permeate just about every political and economic development, a country can easily be distracted from giving attention to even more pressing problems.

In the case of South Africa, unemployment remains by far its biggest and most intractable problem. To be sure, corruption has only served to deepen the crisis, with resources set aside for raising the social wage or for creating jobs directly in the provision of health, education and security services being redirected the way of a politically connected elite. In addition, rampant corruption has eroded business confidence and has, in turn, undermined investment.

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Even without corruption, however, South Africa would still have an unemployment crisis. At least part of the problem lies in the country’s failed education and training system, which continues to struggle to throw off the mantle of colonialism and Bantu education. Then there is the structure of the real economy and its associated labour market. For decades, the country’s resources, farming and manufacturing sectors were calibrated to exploit cheap, migrant labour in large numbers.

However, automation, combined with trade and financial liberalisation, has prompted job-destroying premature deindustrialisation. Land insecurity, together with increased mechanisation, has undermined farming employment, while, in the mining industry, innovative solutions for offsetting falling grades and greater depths have been few and far between.

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At above 26%, South Africa’s unemployment rate is extreme and worse still when analysed through the prism of youth unemployment.

Jobs summits and handwringing notwithstanding, South Africans need to see tangible evidence – and soon – that the issue is being treated with the urgency it deserves. Several of the projects associated with the so-called Public Private Growth Initiative look promising and will hopefully begin yielding results. There are three other potential high-impact initiatives, however, that could add further impetus.

Firstly, there is a major opportunity to create jobs in the so-called small-scale embedded generation – mainly rooftop solar – market. With supportive policy and regulation, which are currently absent, private capital can be leveraged in a way that not only helps to address the country’s electricity supply imbalance but also creates thousands of jobs.

Secondly, Gauteng’s plan for developing a postmining economy on the West Rand needs to be accelerated. The idea is to use former gold mining land and infrastructure to create a job-intensive agriculture hub that will produce high-value crops, mostly for export.

Lastly, it is worth keeping an eye on an entrepreneurial initiative aimed at restarting production at the old Blyvooruitzicht gold mine, near Carletonville. Should the enterprise succeed, it could serve as a template for resuscitating other mothballed or moribund mines in Gauteng and beyond.

It’s surely past time for South Africa to start taking a risk on some potentially high-impact employment schemes.

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