South Africa


Ramaphosa and job creation – no easy answers in times of crisis

President Cyril Ramaphosa addresses the first day of the two-day Jobs Summit at the Gallagher Convention Centre in Midrand. South Africa. 04/10/2018. Siyabulela Duda

President Cyril Ramaphosa said on Thursday that a pact between government, business and labour, announced at the Jobs Summit, will create 275,000 jobs a year. While Ramaphosa said the agreement must be seen in the context of broader efforts to stimulate the economy, his critics claim the plan recycles old ideas and it won’t address the causes of the country’s unemployment crisis.

The Jobs Summit framework agreement was announced by President Cyril Ramaphosa on Thursday, after months of negotiations between government, business, labour and community groups.Ramaphosa, speaking during the first of two days of the Job Summit, which he announced during the State of the Nation Address in February, said unemployment is the country’s greatest challenge and the document was a framework that “provides the outline of an emerging social compact to grow an inclusive economy and fundamentally transform our society”.

Unemployment has a devastating effect on families. It also has a devastating effect on communities,” said the president.

They almost go around like zombies, people who have able bodies without work have their dignity eroded. That’s what unemployment does.”

The Jobs Summit framework agreement will have little impact on addressing the country’s unemployment crisis, said critics of the agreement negotiated at the National Economic Development and Labour Council (Nedlac).

They said the plan failed to recognise the depth of economic challenges in the country, recycled past policies and included vague rather than specific commitments to address the increasing unemployment rate and bring South Africa out of an economic recession.

Ramaphosa said the agreement signed with leaders of business, labour and community organisations at Nedlac must be seen in the context of broader efforts to stimulate the economy and as one step on a journey to addressing the challenges that have hampered the country’s economic development and its ability to tackle poverty and inequality in the democratic era.

He repeated his position that public service workers would not be retrenched and said the private sector had committed to avoiding retrenchments. The plan said the training lay-off scheme, launched after the 2008 global financial crisis, would be revised and improved and expert teams will be deployed to struggling businesses to help them avoid retrenchments.

The business sector had agreed to consider executive salary reductions and limiting paying dividends to avoid retrenchments, said the president.

This is regarded as a revolutionary decision.”

The framework agreement also includes commitments to buy South African products, supporting financial institutions backing black industrialists to the tune of R100-billion, and finalising regulations and legislation to promote economic development.

Ramaphosa’s speech was light on details explaining how the plan could support his claim that 275,000 new jobs would be created a year. A supporting document provided during the conference provided some specifics, but in the main, it included further commitments to existing proposals.

We would like to say that this time around we are determined to implement the various initiatives that labour, business and government have come up with,” said the president.

You may say that this is just a cocktail of wishes and things people would like to see done. It has been thoroughly processed; it has been thoroughly discussed over the last few months since February.”

The framework provides for a monitoring committee that will oversee the implementation of its goals.

Mining and labour analyst Mamokgethi Molopyane dismissed most of the initiatives.

Even though the president would like to present this as ‘Thuma Mina’ and this is how we’re going to get jobs, in reality, it’s nothing new,” she said.

She said Ramaphosa’s language was positive but the jobs summit and the Nedlac process the framework came out of failed to meaningfully include input from the youth, who are hit hardest by unemployment.

It cannot be a gathering of people who are going to agree with each other and won’t ask hard questions,” she said.

Molopyane dismissed Ramaphosa’s announcements as repetitions of old policies and said that even if 275,000 new jobs are created each year under the new plan, which seems unlikely according to the scarcity of the details, it would do little to help the millions of unemployed.

Efficient Group chief Economist Dawie Roodt said the arrangement included some progressive agreements from the business sector and there were positive commitments on skills development.

From there on I think it was just a talk shop,” he said.

I think nothing is going to come from it. Everyone is going to talk nice, shake each others’ hands and that’s it,” he added.

The issue is much deeper than this. The problem is not economic, it’s political,” said Roodt, criticising the ANC’s leadership.

A small group from the Assembly of the Unemployed demonstrated outside the Jobs Summit on Thursday with placards that read “jobs summit = sham summit”.

The group’s spokesperson, Ayanda Kota, said the summit failed to meaningfully include the very people it meant to benefit, the unemployed.

We don’t matter to them,” said Kota.

We are singing from the peripheries while they are discussing our lives without us,” he added. “We believe this is nothing but a sham.”

Centre for Economic Development and Transformation founding director Duma Gqubule dismissed the event.

The business elite gathered at Gallagher Estate to show concern for the jobless 10-million people,” he said.

Basically what’s happened is the elite has run out of ideas to dig us out of this hole.”

Gqubule said creative solutions are needed and are available in such a time of economic crisis but Ramaphosa failed to offer anything new and instead played to the optics of action in an attempt to impress international investors.

The president found support from his fellow speakers at the jobs summit

This summit has raised huge expectations among our people and we dare not fail them,” said the event’s host, Labour Minister Mildred Oliphant.

Business Unity South Africa (Busa) president Sipho Pityana said the summit must be viewed as one of a number of initiatives under Ramaphosa to tackle corruption and find solutions to the country’s complex challenges.

If this Jobs Summit is viewed in isolation from all these other initiatives, we will mislocate its purpose,” he said.

Cosatu General Secretary Bheki Ntshalintshali said the federation almost left the Nedlac negotiations.

This is not an event but a process needing courage and people that are committed to walk the talk. That the route that we’re taking moving forward is going to be difficult and complex, but it’s a journey that all of us have no choice [but] to walk,” he said. DM