Economic Development Minister Ebrahim Patel attended a student leadership summit held at the University of Johannesburg and encouraged all student leaders to turn into economic development activists.
Patel spelled out to the students the vital role they play in society. The sheer number of youth passing through the education system is increasing in numbers in addition to joining the workplace and economy. He told students that they have the right, responsibility and obligation to assist, build and shape the economy of the country.
Speaking to more than 200 student leaders at a student leadership summit, Patel encouraged students to adopt and embrace the government’s New Growth Path (NGP) whose objective is to create a transformed, industrialised and jobs rich economy.
Patel continued to speak about the success of government’s plans and ventures to transform the economy and change society is essentially influenced by the ability of all higher educational institutions to teach and train graduates, and upon graduation, they leave with the required skills to help build and contribute to the industrialisation and manufacturing in the country.
Patel admitted that only 640 000 jobs have been created since the government adopted the New Growth Path in 2010. There is still a long road ahead and good deal more really needs to be accomplished by both government as well as the private sector to elevate the rate of job creation and at the same time for the economy to be able to absorb graduating students into the economy.
Government has generated thousands of jobs ever since the New Growth Path (NGP) was implemented by Cabinet in October last year, statistics published on Tuesday by the Minister of Economic Development reveal.
In reply to a parliamentary question on the progress of the NGP from a member of the ruling party and another from a member of the opposition, Patel outlined a number of interventions which in fact had already yielded thousands of jobs, including:
* Nearly 60 000 jobs created by the Department of Trade and Industry’s support and incentive programmes in the last financial year.
* The help and support of well over 100 000 smallholder farmers by the national and provincial agricultural departments.
* Environmental employment schemes, such as the Department of Water Affairs’ Working for Water and the Working for Land programme, which would provide over 30 000 full-time job equivalents this year, increasing to 60 000 the coming year.
* A rural youth employment programme, which has created 7 500 jobs.
Patel pointed out that the government planned to boost the number of work opportunities in the Community Works Programme to one million by 2014, of which up to 90% could possibly be reserved for young adults.
The programme offers longer-term employment to young adults than is the case in the traditional Expanded Public Works Programme, he stated.
He explained government was rolling out a number of other projects to create more work opportunities.
These were showcased at the recent Cabinet lekgotla, where 12 action plans were adopted to make sure that government prioritises measures to expand public and private sector investment.
The action plans contain measures in agriculture and agro-processing, mining industry, manufacturing and the green economy. One particular measure is the announcement of a number of large agro-processing projects for instance a seed-crushing plant in Mpumalanga, which will create up to 4 000 jobs, as well as a chicken farming project in the Free State, which would most likely employ about 800 people.
Also included is the government’s Comprehensive Rural Development Programme, which at the moment is being implemented at 65 sites.
In the mining sector, Cabinet had adopted the benefication strategy in June; had endorsed the setting up of the state-owned mining company and had identified strategies for lowering iron and steel prices. A pre-feasibility study for the setting up of a new steel mill had also been completed.
Government had at the same time launched a major effort to further improve African regional integration, with the launch of the negotiations in June for a Free Trade Area involving 26 countries with 600 million people, stretching from Cape Town to Cairo.
Patel pointed out the size of the total labour force – the total number of employed and unemployed persons – increased substantially in the first two quarters of this year, by about 200 000 persons each quarter, after dropping in every quarter of last year.
Having said that, the pace of job growth has slowed down in the recent quarter and jobs were lost in manufacturing, mining and agriculture in the second quarter, compared with the first three months of the year.
One of the main flaws around the enactment of Black Economic Empowerment (BEE) most likely was the over-emphasis on the subject of diversity of ownership together with senior management.
This has been one of several crucial concerns brought up during the Black Economic Empowerment Advisory Council meeting, chaired by President Jacob Zuma on Friday, which reviewed how to take the program of economic transformation into the future as well as encourage inclusive growth.
“The unintentional results of this specific over-emphasis is without a doubt fronting along with tender abuse. We are satisfied of the fact that the Council spoke out so firmly in opposition to fronting which happens to be one of the leading obstructions to the implementation of BBBEE.
“Fronting is unquestionably an insult to the dignity of the poor and in addition we are required to respond decisively in opposition to it. I am delighted of the fact that the Council is so motivated to work together with us to do something against this heinous practice,” Zuma said.
As reported by the Presidency, there was clearly a special focus on the implementation of the New Growth Path along with the role of Broad-Based Black Economic Empowerment (BBBEE) with regard to job creation during the meeting.
Specifically, the meeting emphasized the fact that BBBEE was not simply about big business deals for a handful of individuals in society but at the same time required a hand in empowering common citizens.
“With regard to this, the Council consider it necessary for the consistent enactment of broad-based BEE in every one of the sectors of the economy, with the intention that the policy touches the lives of a lots more people,” the Presidency said.
The meeting furthermore pointed out that BBBEE was in fact central to inclusive growth. Help and support was given to provisions of the New Growth Path which in turn demands a much more resilient focus on the broad-based components of the BEE regulations.
This included ownership by communities and workers, greater skills development along with career-pathing for all those working people, ongoing help and support for small enterprise and cooperatives, together with a completely new focus on procurement from local producers in an effort to assist job creation.
The meeting at the same time remarked that in order to contribute to job creation, BBBEE is required to, amongst others, encourage new enterprise development, stimulate local procurement and additionally make improvements to skills development and employment equity.
Participants additionally concluded that fronting would have to be exterminated coupled with effective mechanisms, and this includes possible punitive measures against those responsible for and guilty of fronting practices, would have to be put in place to stamp it out.
“It was decided that government, together with the help and support of the BBBEE Advisory Council, would definitely guarantee a revision of the BBBEE Codes in order to promote job creation, investment in small business and cooperatives, broad-based ownership and employment equity,” the Presidency said
The Council at the same time proposed that government will need to immediately make sure that appropriate monitoring and evaluation of the implementation of the BBBEE Act.
Business Unity South Africa (BUSA) is cautiously optimistic with regards to the economic and business outlook for South Africa in the year ahead.
Despite the fact that financial and economic recovery this past year appears to have been moderate, and is also almost certainly going to fall short of the 3% expected growth rate, in spite of this it looks like the future economic prospects for South Africa local economy in 2011 are much better according to BUSA President Futhi Mtoba.
She has forcasted that South Africa’s overall economy could quite possibly expand by 3.5 percent to 4 percent the coming year, sparked by healthier growth forecasts and predictions for the global economic system, in combination with optimistic local economic trends and development.
According to BUSA, interest rates are most likely going to continue to be low for the majority of 2011.
Even though unemployment will continue to be high, BUSA hopes and anticipates that next year will see the introduction of new net employment creation, albeit on a small scale. Overall, BUSA is convinced the SA economy and climate will most likely be more robust, more prominent and better next year.
BUSA also commented that the debate and discussions regarding the New Growth Path appeared to be an outstanding opportunity and chance for local business and organisations to be able to contribute to and give rise to the vision as well as its implementation.
Regardless of what ambitious higher growth path SA ultimately sets for itself, unfortunately it will never be attainable unless we are able to better address the gaps recognized in our economic performance and system. It is a collective problem, predicament and challenge.
In addition, in order to achieve the expected growth rate, each and every sector will, in addition, need to take responsibility for its function in our society in these modern times and be held accountable for their actions. The debate and discussions, which will eventually take place in Nedlac and elsewhere on the government’s proposals and recommendations for a higher all inclusive job rich growth and development path for SA, should be informed by cogent along with relevant economic and financial realities.
South Africa will have to pay more attention to fixing its education system, improvement of civil servants skills and competencies in addition to cultivating a social pact along with a common vision amongst all South Africans if it hopes to succeed with its New Growth Path, say economists.
This comes after the release last month of the proposed framework for the government’s New Growth Path by the Minister of Economic Development Ebrahim Patel.
Iraj Abedian, chief economist of Pan-African Capital, says that if the New Growth Path were comprised of one weakness it would be that the government has failed in its duties to focus enough consideration on the way to fix South Africa’s poor education system.
He believes the South Africa’s education system is afflicted with an absence of trained and self-disciplined teachers.
The only way to is to deal with the current education problems and inadequacies, rather than taking the option of reducing matric standards to improve pass rates, he points out.
Regardless of what some industry professionals have mentioned, Abedian doesn’t necessarily feel that the country’s language policy (11 official languages) must have been a primary answer why pupils continued to fair poorly.
He continued to highlight and singled out the particular instance of India which had numerous languages and said “99 percent” of school children that also had under no circumstances spoken English before, get to grips with the language in their first year of schooling.
The country first had to close the gap in students inadequate performance in maths and science, or else the New Growth Path’s proposed strategy to create 50 000 additional artisans by 2015 and 30 000 engineers by 2014, would be a “drop in the ocean” for what the country needed, he warns.
Dawie Roodt, economist of the Efficient Group, advocated that there was a ridiculous amount of concentration on pupils obtaining a matric, and that a strategy much like that currently adopted and in operation in Germany ought to be adopted, where immediately after receiving a Grade 10, learners would be able to elect to embark on a trade apprenticeship as an alternative to continue with their schooling.
Cosatu economist Chris Malikane is convinced drafters of the New Growth Path may have elected to focus considerably less on how to fix the education system, as they failed to view it as being an investment priority.
But Neva Makgetla, Deputy Director General for policy within the Department of Economic Development claims there was an inclination by many commentators to fall back on education as the approach to solving unemployment, having said that she indicates that education alone is not a short-term resolution for joblessness. “So you need to focus on other means,” she adds.
Besides this, the document does not focus a great deal on education as it is primarily an economic document.
In its discussion document “Perspectives on an inclusive higher job rich growth path for SA by 2025” published a week ago, Business Unity South Africa (Busa) pointed to five year issues identified by a recent policy forum the association had organised, examples of these are:
A “back to basics” focus on education which is “world class” and placement orientated and accessible to all;
More appropriate and accessible skills development;
A focus on a state which delivers as well as being monitored;
Focus on establishing regional infrastructure;
Inclusive wage setting which reflects skills and productivity, “with entry wages facilitating access to employment”.
Most economist agree that The New Economic Growth Plan will not work unless a social compact and national vision is crafted in which all South Africans interact with each other.
DA shadow minister for trade and industry Tim Harris, who recently criticised the New Growth Plan in an article published in Business Day, stating that is was rather a “path to poverty”, however, mentioned he thought the call for a social pact between labour, government and business was a much needed intervention.
He points to the example of how a social pact in the 1980s among business and labour in Ireland was triumphant in remodeling the country into a Celtic Tiger for quite a few years.
Despite the fact that Ireland recently defaulted on its debt, there is certainly a good deal the country could possibly in spite of everything gain knowledge from the European country’s approach 30-odd years ago.
Harris says a social pact at the time had been very helpful to cut corporate taxes in addition to a state-brokered deal had moderate wages and labour regulations, in return for job creation and up-skilling of the labour force.
According to the International Labour Organisation, Ireland had been suffering from an unemployment rate of 17 percent and additionally inflation was on average at 12 percent in the decade right up until 1987. With the lack of job opportunities along with decreasing real wages, emigration ended up being at its greatest level since the 1950s.
The trade unions, employers and the government, began negotiating in 1987 which contributed to the very first social pact, the Programme for National Recovery (PNR).
Azar Jammine, chief economist of Econometrix, has recently also questioned just how the New Growth Path fitted in with the National Planning Commission.
But Makgetla says while the New Growth Path was a short-term plan, the National Planning Commission is going to be tasked with long-term plans.
She affirms the New Growth Path is not a concrete plan, but rather a discussion document which could lead in the future to the tabling of some of the proposal and recommendations mooted in the document’s framework.