South Africa unveils new strategy to lure more investment and create jobs

 ·31 May 2022

South Africa’s Presidency unveiled a draft plan to draw more investment to help grow the coronavirus-battered economy and create jobs for the 34.5% of its labour force that’s unemployed.

“The Country Investment Strategy is aimed at creating a fully integrated and coordinated approach to investment through aligning government priorities and channelling investment towards areas with the greatest growth potential,” the Presidency said in the document, which was published in the Government Gazette on Tuesday.

Those should be “supported by aptly coordinated incentive schemes and anchored by quality institutions,” it said.

Key industries being targeted for investment include finance, insurance, real estate, business services, logistics, manufacturing, mining, electricity, water and agriculture.

The public has a month to comment on the proposed plan.

South Africa’s unemployment rate fell for the first time in seven quarters as the manufacturing and mining industries added jobs to meet demand for commodities stoked by Russia’s war with Ukraine and the government employed more people through its public-works program.

The jobless rate fell to 34.5%, from 35.3% in the final three months of 2021, Statistics South Africa said Tuesday in a report released in the capital, Pretoria. That’s the first drop since the second quarter of 2020, when job seekers were hindered by one of the world’s strictest lockdowns to slow the spread of Covid-19. The median of four economists’ estimates in a Bloomberg survey was 35.4%.

Unemployment according to the expanded definition, which includes people who were available for work but not looking for a job, fell to 45.5% from 46.2% in the fourth quarter.

Peter Attard Montalto, head of capital markets research at Intellidex, said Stats SA’s data-collection problems rendered the numbers “meaningless,” citing discrepancies in formal employment between the quarterly labour force and employment statistics surveys.

“They used to move roughly in lockstep albeit with a spread,” he said. “Now the quarterly labour force survey has become much more volatile.”

South Africa’s official unemployment rate remains the highest on a list of 82 countries monitored by Bloomberg — though some of the data is outdated. Strict labour laws, stagnant productivity, bureaucratic hurdles and a skills shortage have reduced the ability of South African companies to hire additional workers.

The recovery in the unemployment rate may be short-lived as a record number of electricity outages forecast for this year, the worst flooding in almost three decades in the eastern KwaZulu-Natal province in April, a slowdown in global output, rising interest rates, and surging fuel and food prices caused by extreme weather and the war in Ukraine are likely to weigh on economic growth and job creation.

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