UIF continues to create and save jobs
In May this year, President Cyril Ramaphosa announced the new cabinet, as well as reconfiguration of several government departments including the Department of Labour, which was renamed Employment and Labour.
The expansion of the Department’s mandate signalled government’s resolve to accelerate job creation in order to rapidly reduce unemployment. The name change requires the Department and its entities to change its posture and double its efforts to create jobs and preserve the ones already existing.
In his budget vote speech delivered in July this year, Minister Thulas Nxesi mentioned that the Department is going to leverage on its entities, which are labour market instruments, to preserve jobs and invest in job creating initiatives.
Section 5 of the Unemployment Insurance Amendment Act of 2016 provides for the use of UIF funds for the retention of contributors in employment and re-entry into the labour market, and UIF has already made significant strides in executing this section of the Act.
In April 2019, UIF launched 32 training partnerships with various institutions to retrain UIF contributors and unemployed youth. An amount of 7.9 billion rand has been budgeted to train 130 thousand learners over a three-year period.
Currently approximately 30 000 learners have already started training in programmes covering artisanship, business venture creation, learnerships and short learning skills development programmes.
The most critical phase of the mentioned training interventions is the exit phase, where learners are able to find employment or create employment by starting their businesses.
Already there are learners who have successfully gained employment after undergoing training, and one such learners is Lethaba Vacu who is employed as a pilot at FlySafiar. Lethaba is one of 50 learners who have undergone training in Private Pilot Licence (PPL) with Durban Aviation Academy contracted by our training partner JLD Institute.
UIF’s role in stimulating employment and saving existing jobs is also achieved through investments. According to the Unemployment Insurance Act, UIF is required to deposit surplus funds with the Public Investment Corporation (PIC). PIC invests the funds according to the UIF approved investment mandate, which outlines asset classes where investments should be made and quantum of allocation in each asset class.
The Fund has allocated 20% of its investment portfolio in Socially Responsible Investments (SRI). These are investments in unlisted companies who have a high social impact with potential to either generate new jobs or preserve existing jobs, and also make a difference in the community.
Since the inception of this asset class in 2015, more than fifty thousand jobs have been sustained. It was through the SRI that UIF invested R1.2 billion rand to Edcon to prevent the catastrophic loss of approximately 140,000 direct and indirect jobs.
Last year UIF launched the R 2 billion Programme Development Partnership (PDP) Fund, which focuses on funding early-stage, investable projects, opportunities or innovations in key and targeted economic sectors. Since the launch 108 applications have been received and are at various stages of the screening process. The PDP will also be used to empower black fund managers who will be allocated R 350 million to invest in viable business ventures.
Under the leadership of Minister Nxesi, we will continue taking multidimensional approaches to invest in viable schemes that create jobs.
* Teboho Maruping is the Commissioner of the Unemployment Insurance Fund.