Economic Development Minister Ebrahim Patel put a positive spin on the job-creating role of the government, telling MPs yesterday that the country’s economy had created just short of 200 000 jobs in the financial year ending in March.
Patel, who presented his department’s annual report to the National Assembly yesterday, acknowledged that state intervention in industrial funding and the promotion of market competition, was just “one lever” within the capacity of a national government.
But the capacity of national governments, including the South African government, to steer domestic economies towards turbo-charging jobs growth was constrained “by forces that it has no control over”.
He noted that the South African government could not determine whether the growth rate of China – South Africa’s biggest trading partner – went up or down. It also could not do much about whether the US, another of the country’s major trading partners, would resolve its current “fiscal challenges”.
It also had little influence over whether the EU would grow robustly.
Despite this, some success had been made in job creation – although he did not mention that his department’s target has been to create 500 000 jobs a year.
Of the 199 000 jobs created in the last financial year, nearly 20 000 were created by the Industrial Development Corporation (IDC), a state-owned company. This had partnered with private companies, injecting R16 billion in disbursements.
In May he told the National Council of Provinces that government investments of “tens of billions of rand” through industrial and infrastructure finance to promote industrialisation and manufacturing capacity in South Africa “are set to create over 7 800 jobs”.
He then also lauded the IDC’s efforts “to accelerate government plans to increase job opportunities and create new industries”.
He said at the time that over the previous two years – the 2011/12 and 2012/13 fiscal years – the IDC had “scaled up its levels of industrial funding”, committing R27bn, a 48 percent increase compared with the two preceding years. He said R3bn would be made available for youth employment, through the Small Enterprise Finance Agency (Sefa), to stimulate youth employment and entrepreneurship over five years.
Yesterday, he reported small business funding approvals of R432 million, “more than double approved in the comparable previous period”, were made by Sefa in 2012/13. He did not indicate how many jobs had been created through this funding.
While Patel did not make mention of the potential for price-fixing and sweetheart deals by state-owned companies, he said fines and penalties of R731m were imposed by the competition authorities for anti-competitive actions in the private sector and price-fixing in the economy.
“These exclude the large penalties imposed on the construction industry, which was finalised after the end of the financial year,” he said.
Without elaborating, the minister reported that agricultural jobs had increased by 83 000 in the period.