Ramaphosa’s first 100 days sees unemployment increase

Issued by Mmusi Maimane –
21 May 2018 in News

By the end of 2017, the expanded unemployment rate was 36.3%, and with a staggering 9.2 million unemployed South Africans, the SA economy grew by a paltry 1.3% in 2017, coupled with a decrease in net Foreign Direct Investment (FDI).

Within the first 100 days, the President has begun to move us in the right direction, but there are still policies within his government and the ruling party that will always act as a barrier to growth and job creation. Until President Ramaphosa deals with such policies, we will continue our low growth high unemployment trajectory for the foreseeable future.

The President has achieved the following during his first 100 days:

  • Hosting a Japan-Africa trade forum;
  • The appointment of four investment envoys to attract foreign investors to South Africa;
  • Signing long-delayed renewable energy contracts worth $4.7 billion with Independent Power Producers (IPPs);
  • A proposed Youth Employment Service (YES);
  • The appointment of Nhlanhla Nene as Minister of Finance; and
  • South Africa’s Business Confidence Index (BCI) rising 11 points to 45 in the first quarter of 2018 – the highest in three years.

Despite these incremental changes, the President has failed to act on several economic matters. This has seen the number of unemployed South Africans increase during the first months of his Presidency, from 9,216 million in the previous quarter to 9,481 million.

To address rising unemployment and to get our economy thriving, the President needs to act swiftly in addressing the following matters:

  • Reject the policies of his Ministers’ Ebrahim Patel and Rob Davies, and ensure economic policy certainty across all government departments;
  • Reverse the 1 percentage point VAT hike;
  • Upgrade the current Employment Tax Incentive (ETI) to a full Youth Wage Subsidy;
  • Introducing a National Civilian Service year to provide work experience for the approximately 78 443 unemployed matriculants (from the class of 2016 alone) to enter into work-based training in the community healthcare, basic education or SAPS fields;
  • Reverse the decision to cut the Competition Commissions budget, as the Commission is crucial to reducing the concentration of the economy and allowing small businesses to flourish;
  • Institute a review of all labour legislation, with a view to liberalise the labour market making it easier to employ people;
  • Amend B-BBEE legislation to include internships, bursaries, and funding of schools as legitimate empowerment;
  • Reject the proposed amendment of section 25 of the Constitution to expropriate all land without compensation, which creates uncertainty and volatility in the economy;
  • Ensure that the 100 000 unpaid invoices, worth over R7.7 billion, between government departments and small businesses are paid;
  • Adopt a City-led economic growth agenda, focusing on cities as the drivers of growth and job creation; and
  • Reconsider a blanket national minimum wage, which favours the employed at the expense of the unemployed and will cost at least 700 000 jobs, killing many small businesses.

Countries rise and fall on the strength of their economies, and this holds especially true for the developing world. Just tinkering at the edges, with a talk shop here and a summit there, will not fundamentally restructure the economy to create jobs.

The President still has a long way to go when it comes to the economy.

The above was presented by DA Leader Mmusi Maimane at a press conference to review President Cyril Ramaphosa’s first 100 days in office. Read the full report here