South Africa President Jacob Zuma said the government will create a 2.4 billion rand ($301 million) fund to help train workers made unemployed by the country’s first recession in 17 years.The program will apply to workers who were earning no more than 180,000 rand a year, Zuma told a press conference in Pretoria. The government will also give support to the car, clothing and textile industries, he said, without giving details.
South Africa’s economy entered recession after manufacturers and miners scaled back production and fired thousands of workers as exports collapsed. The automotive industry has been hard hit by a slump in consumer spending, with vehicle sales plunging 32.7 percent in the first seven months of the year, compared with the same period in 2008, an industry body said yesterday.
“The central challenge is to ensure the timely implementation of the measures agreed,” Zuma said. The “training layoff scheme is one alternative to retrenchment for workers and companies affected by the recession.”
The training program will be financed from the National Skills Fund and the Unemployment Insurance Fund, the government said in a statement. The training allowance to workers will be capped at 50 percent of their basic salary or a maximum of 6,239 rand a month, and will be available to workers for three months only, Economic Development Minister Ebrahim Patel told reporters at the briefing.
The Industrial Development Corp., South Africa’s state- owned lender, has set aside 6.1 billion rand ($771 million) over the next two years to help companies offset the impact of the recession, and plans to extend 70 billion rand in loans over five years, it said on July 2.
The measures announced today came from proposals by a task team representing companies, labor unions and the government, to help ease the impact of the global economic
The Congress of South African Trade Unions, the country’s biggest labor federation, was “happy” with the proposals, secretary general Zwelinzima Vavi told reporters.
“We were complaining that the government was sending too junior officials to engage with this important matter, Vavi said. “We complained and demanded that the president should be the public face behind the response South Africa has on this. Government is now coming seriously to the party, driving this process at the most senior level. The president is the public face of the campaign. We cannot be more happy than we are now.”
Trade and Industry Minister Rob Davies will give details about the rescue packages for the automotive and clothing industries in the next two weeks, Patel said.
Source: Bloomberg, universityworldnews.com, info.gov.za