Business

Ramaphosa’s big plan to create 275,000 new jobs a year

Staff Writer

 ·5 Oct 2018

South Africa’s Job Summit officially kicked off on Thursday (4 October) at the Gallagher Convention Centre in Johannesburg.

In his commencement speech, president Cyril Ramaphosa said that the summit was not a once-off event, but the first phase of an extensive process in which social partners will work closely together to improve growth, protect existing jobs and create new jobs.

The president said that he wanted South Africa to create 275,000 new jobs every year, while also trying to avoid mass retrenchments and job losses.

He said that a number of partners have already committed themselves to concrete steps to avoid retrenchments and to offer support to struggling companies.

Stopping job losses

Some of the steps agreed upon by these partners according to Ramaphosa include:

• The training layoff scheme, which was introduced in response to the 2008 global financial crisis, should be immediately revived and improved.

• Business and government have agreed to establish rapid response teams of experts to assist businesses in crisis.

• There is agreement that all possible alternatives and opportunities need to be explored before retrenchment is considered – including executive salary sacrifices and the foregoing of dividends.

• In an effort to create a substantial increase in domestic demand, South African companies, government and consumers must buy local.

“If we do not buy the food that comes out of South African soil, there will be no farms and no farmworkers,” Ramaphosa said. “If we do not buy the goods made by South African hands, there will be no factories and no workers.

“The most direct way for South Africans and South African companies to create jobs is to buy only South African products. This is a message that must reverberate across the country and that must find expression in concrete action.”

Creating jobs 

While Ramaphosa promised to stem job losses, he also announced a number of reforms that he estimated would create some 275,000 more jobs a year.

This is over and above the jobs that would have been created without these interventions, which was on average about 300,000 a year over the past four years, he said.

Some of the steps under this initiative include:

• The financial sector, as part of its transformation code, will invest R100 billion over five years in black-owned industrial enterprises.

• Government will work with the financial sector to develop facilities for financing at preferential rates and extended repayment terms.

• Through a programme of accelerated land reform, the government will expand the area of land under cultivation in an effort to substantially increase the number of people productively working the land and provide rural dwellers with the ownership and tenure rights needed to unlock the economic potential of their land.

• Agbiz and the Banking Association of South Africa have developed a blended finance model designed specifically to make additional funds available to assist potential redistribution beneficiaries to access capital.

• In the metals, mining and machinery sector, the government has agreed to expeditiously finalise an export tax on scrap metal and ensure better access to incentives like the Downstream Steel Industry Competitiveness Fund.

• Mechanisms are being put in place to enable companies to form partnerships with nearby TVET colleges, where the colleges offer the theoretical component of the programme and companies offer the practical and workplace components.

• Social partners have agreed to support the government’s anti-corruption strategy and to develop their own complementary strategies.

“In addition to what has been agreed between the social partners under the auspices of Nedlac, several companies are working – either individually or with others in their sector – on plans to expand and create new jobs,” he said.

“They have taken the initiative themselves, understanding that sustainable employment creation is beneficial to their business, to the communities in which they are located and to broader society.”

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