The lesson South Africa is taking from India to get the economy back on track: Ramaphosa

South Africa’s challenge is not only to recover to pre-pandemic levels of economic activity, but to lift it out of an economic decline that has been several years in the making, says president Cyril Ramaphosa.

In a debate on government’s economic recovery plan in parliament on Wednesday (21 October), the president said that South Africa was already facing a jobs crisis before the coronavirus lockdown hit.

“Unlike many other national economies, we have to recover jobs that were lost as we had to shut down much of the economy, but also to alleviate the plight of millions of people who were already jobless before the pandemic hit,” he said.

To address these issues, Ramaphosa said that government’s immediate focus is job creation.

He said that the economic recovery plan recognises that the private sector is by far the biggest driver of employment, however, a strong focus has been placed on public sector jobs for short-term employment.

“Through the presidential employment stimulus, we are using a substantial expansion in the scope of public employment programmes to mitigate unemployment and support recovery,” he said.

Ramaphosa said that South Africa is not the only country in the world that is doing this – citing India’s mass public employment programme.

“One looks for instance at India’s Mahatma Gandhi National Rural Employment Guarantee Act, which is one of the world’s largest public employment programmes and has succeeded in facilitating work opportunities for Indians and alleviating poverty.

“Over the next three years, R100 billion in public investment will create hundreds of thousands of work opportunities and support livelihoods in many sectors,” he said.

Ramaphosa said that jobs will be created in the Expanded Public Works Programme and Community Work Programme, as well as through avenues such as ‘social employment in communities’.

“Social employment offers income security to those who are of working age but have been unable to find work. It provides a pathway to securing formal employment and entrepreneurial activity, particularly for women and young people.”

Private employment to take over 

As South Africa’s economic recovery advances and the reform effort gathers pace, more jobs will be created by the private sector and the scale of public employment will accordingly decline, said Ramaphosa.

“The depth of the challenges we face mean that we should not be making a choice between public employment and private-sector job creation. We need these two approaches right now on a scale we have not achieved before,” he said.

Ramaphosa said that this will include the prioritisation of small, medium and micro-enterprises to ensure that the country’s economic recovery is inclusive.

“These businesses have the greatest potential to create jobs, to empower black people, women and youth, and to reduce inequality.

“In every aspect of the plan – from infrastructure development to localisation to African integration and procurement – there is a deliberate effort to expand the opportunities for SMMEs and cooperative to participate.

“This will take place alongside a focused support programme to enable SMMEs to participate in manufacturing value chains,” he said.

Ramaphosa said that particular attention will be given to supporting women-empowered SMMEs as a vehicle for women’s economic inclusion and for securing women’s financial independence.

Read: Mkhize warns over spike in coronavirus cases in South Africa

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The lesson South Africa is taking from India to get the economy back on track: Ramaphosa