$1bn NDB loan to help create employment
JOHANNESBURG - SOUTH Africa’s ambitious job creation drive spearheaded by President Cyril Ramaphosa has received a $1 billion (R14.5bn) cash injection from the BRICS Bank to help the country fight rising unemployment levels.
The New Development Bank (NDB) yesterday approved a $1bn second Covid-19 emergency loan to South Africa in less than a year to support economic recovery.
The NDB said the loan would finance the creation of employment opportunities in South Africa, in particular the first phase of the Presidential Employment Stimulus (PES).
“The loan will finance creation of employment opportunities in South Africa, in particular the first phase of the PES, together with social protection measures for active labour market participants that temporarily lost their jobs, in order to help them remain in the labour market,” it said.
Unemployment in South Africa has reached unprecedented levels, pushed higher by the impact of the Covid-19 pandemic, with the rate of joblessness standing at 32.5 percent at present.
The pandemic saw the number of unemployed persons increasing by 701 000 to 7.2 million in the fourth quarter of 2020, while the number of discouraged work-seekers increased by 235 000.
The PES is aimed to create and support about 600 000 job opportunities in the public sector, together with social protection measures for workers that temporarily lost their jobs.
In the past year, about R13bn was allocated to the stimulus from Ramaphosa’s R100bn job protection and creation support package announced in April 2020 as part of the country’s response to the pandemic.
The remaining R87bn will be allocated over the next three years. The Presidential Employment Stimulus supports a range of opportunities through the expansion of public employment as well as job retention in vulnerable sectors.
In addition to employment opportunities, the stimulus provides crucial support for livelihoods in the creative sector, the agricultural sector and the early childhood development sector.
A progress report published in February stated that 11 national departments and all nine provinces were responsible for implementation of programmes supported through the employment stimulus.
“Its aim is to support livelihoods while the labour market recovers – investing in public goods and services, enhancing skills and employability, and boosting demand in the economy at the same time,” read the report.
The NDB loan is part of the second batch of Covid-19 Emergency Program Loans to member countries focusing on economic recovery through employment generation as well as support for labour force participation.
This follows the first Covid-19 Emergency Program Loan to South Africa that provided emergency relief funding for supporting healthcare and providing social grants in the country.
The NDB established the Emergency Assistance Facility in April 2020, to provide up to $10bn in crisis-related assistance to its member countries.
National Treasury and the Presidency could not comment about how soon they expected the money to be availed to South Africa or which programmes they will target.