JOHANNESBURG – President Cyril Ramaphosa yesterday announced a bold plan to stimulate employment that will see a partnership between corporations, labour, government and communities unlocking growth.
Ramaphosa, who unveiled a R50 billion stimulus package last month, estimated that an additional 275 000 jobs a year were likely to be created annually if the plan was implemented.
He told the two-day jobs summit held in Midrand, Johannesburg, that the 275 000 jobs were over and above the jobs that would have been created without these interventions, which was on average about 300 000 a year over the past four years.
Ramaphosa said that among the measures contained in the framework agreement signed by business, communities and labour yesterday was the need to mobilise finance on a far greater scale in a bid to build the country’s manufacturing capacity.
“The financial sector, as part of its transformation code, will invest R100 billion over five years in black-owned industrial enterprises. The government will work with the financial sector to develop facilities for financing at preferential rates and extended repayment terms,” said Ramaphosa.
He also said that, in addition to the government initiatives of R600 million, Agbiz and the Banking Association of South Africa had developed a blended finance model aimed at making additional funds available for beneficiaries.
The establishment of a new union-owned clothing factory in the Eastern Cape is also in the pipeline within the next two years.
“This innovative and welcome initiative will create around 100 jobs initially and aims to contribute to the re-industrialisation of a province which suffers from widespread poverty and unemployment,” he said.
Ramaphosa admitted that the National Development Plan’s target of a six percent unemployment rate by 2030 was impossible unless action was taken.
He said that business and the government had agreed to establish rapid response teams of experts to assist businesses in crisis.
“There is agreement that all possible alternatives and opportunities need to be explored before retrenchment is considered, including executive salary sacrifices and the forgoing of dividends,” said Ramaphosa.
South Africa is facing a jobs bloodbath that has seen increased retrenchments, with the StatsSA quarterly report revealing that employment fell by 69 000 to 9 748 000 in the second quarter of 2018. Around 13 000 of those lost jobs were in the crucial manufacturing sector.
The framework agreement is also pushing for a drive in domestic demand.
“This means that South African companies, the government and consumers must buy local,” said Ramaphosa, adding that a number of companies including Adcock Ingram, AngloGold Ashanti, Clientele, Coca-Cola SA, Edcon and First Rand had agreed to buy local as part of their operational strategies.
He said the jobs summit was not a once-off event, but the first phase of an extensive process in which all partners would work closely together to improve growth and create new jobs.