South Africa’s president, Cyril Ramaphosa called on top public and private companies to increase local procurement, in order to reduce high levels of unemployment.
The president, who was addressing businessmen, trade unionists and government technocrats at the much anticipated Jobs Summit, announced that deals between the government and the private sector would create 275,000 more jobs.
South Africa’s unemployment rate stands at more than 27%, one of the highest in the world’s major economies.
Extreme unemployment in this country is the product of an economy that for several decades has been starved of any meaningful investment in its human capital.
“Unemployment is the greatest challenge facing our country,” Ramaphosa acknowledged.
“Extreme unemployment in this country is the product of an economy that for several decades has been starved of any meaningful investment in its human capital, where most people have been denied the opportunity to own assets.”
Ramaphosa, a renown deal maker and former trade union leader, has made job creation a cornerstone of his efforts to revive an economy that was battered by the mistrust between government and the private sector during the years of president Jacob Zuma.
Indeed, Ramaphosa is still struggling to convince investors of policy certainty that was devastated by corruption scandals in the Zuma years and is now being shaken by planned land reforms and a review of the mining code.
Ramaphosa’s job creation deals
The agreements Ramaphosa announced on Thursday cover several sectors including agriculture, manufacturing and mining.
Besides boosting local procurement, Ramaphosa announced a government-led export drive for manufactured and processed goods.
- A deal has also been reached that requires companies to explore all possible options before laying off staff, including cutting executive salaries and foregoing dividend payments.
- Other agreements included interventions aimed at raising the quality of training, 100 billion rand ($6.8 billion) of financial sector investments in black-owned industrial firms, and an extension of tax incentives for companies creating jobs for the youth.
- Ramaphosa said the government saw potential for additional jobs by expanding agricultural exports, distributing productive farmland to black farmers and promoting special economic zones to overseas investors.
- Officials had also agreed to finalise an export tax on scrap metal and ensure better access to incentives like the Downstream Steel Industry Competitiveness Fund, the president added.
This jobs plan follows a stimulus and recovery plan announced by the government last month.ALSO READ: South Africa announces relaxed visa rules