A former Treasury executive has an answer to South Africa’s job problem

In the years leading up to the Covid-19 pandemic, chronically high unemployment had already begun to erode South Africa’s economic position. Now, post-pandemic, record-high unemployment seems an impenetrable barrier to economic recovery.

While the government has implemented several measures in an attempt to overcome the unemployment crisis, policy-makers need to ‘think bigger’ and be far more ambitious in expanding both public employment programmes and support for private-sector job creation if these initiatives are to make a tangible difference, says Andrew Donaldson, former deputy director-general of the National Treasury.

Donaldson, who is currently a senior research associate of the Southern Africa Labour and Development Research Unit at the University of Cape Town, was speaking in PSG’s latest Think Big webinar this week.

Citing the government’s expanded public works programme and Cyril Ramaphosa’s presidential employment stimulus programme, Donaldson noted that the state should not be thinking of job creation initiatives as temporary.

“If they are to make any kind of lasting impact, these programmes need to become permanent elements of our approach to raising living standards and investing in the socioeconomic fabric of the country.”

Donaldson said higher investment and growth are imperative, but job creation has to come from both the public and the private sectors.

“The youth employment incentive is not enough. The tax subsidy should be extended to all labour-intensive industries and low wage earners, not just young first-time work-seekers.”

“To talk to the issue of supporting the South African business environment is to cast the net wide. The reality is that ‘business’ is not a homogenous subject – in South Africa, due to the prevailing inequalities, the topic of ‘business’ extends from well-established commercial enterprises that have thrived for decades, to the emerging township economy, the economies that exist within informal settlements and accessibility issues that affect rural communities.”

The government, he said, needs to invest in cultivating opportunities for work across the entire economy.

A success

Furthering his argument that employee development programmes need to become permanent fixtures on the country’s socio-economic landscape, Donaldson pointed to the relative success of the president’s employment stimulus programme, which in six months achieved more success than previous programmes.

However, he said that the government now needs to build on this project as a permanent fixture rather than a temporary solution.

“The president’s stimulus programme placed South Africans in schools across the country as assistants and workers in various capacities. Now, we need to take this same approach and apply it to sectors such as the healthcare industry, crime prevention, securities on our rail system, and in municipalities.

“In tandem with these kinds of efforts, we need to keep building our education system to address the skills shortage as a longer-term solution. In other words, we need to act with both the short- and long-term in mind – a two-pronged approach to the crisis,” said Donaldson.

Back-to-basics

For Donaldson, the reality of the South African situation necessitates a ‘back-to-basics’ approach.

“We need to renew our focus on the areas of service delivery and basic infrastructure that we have known how to do for 100 years,” he said. Municipal infrastructure, housing, transport and water services don’t need new technologies or innovation, they need investment spending and long-term cost recovery from users.

“To do this, we need to cement public-private partnerships to inject much-needed funding into these areas. Ultimately, we need to invest in the infrastructure that can support labour-intensive industries.”

He said that the unemployment crisis will not be found within state policy alone. It requires a collective effort from the public and private sectors as well as civil society at large.


Read: South Africa to look at ‘German system’ for jobs: Ramaphosa

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A former Treasury executive has an answer to South Africa’s job problem