Johannesburg - During his state of the nation address on June 20 this year, President Cyril Ramaphosa promised that within the next 10 years the country would have made progress in tackling poverty, inequality and unemployment.
And within that period, two million more young people will be in employment, meaning that jobs would be created for them in order to halve the high unemployment rate in the country.
However, speaking at an event organised by the Mapungubwe Institute for Strategic Reflection (Mistra) early this week, he changed his tune and warned of job losses in the coming months. He said as a result of technology, globalisation, climate change and a whole number of challenges like low economic growth “many more people are going to lose jobs."
We pull out publicly available documents that shows the 2 million jobs dream will never become a reality.
In its 24-page 2019 economic outlook, the country’s national treasury said GDP growth has been revised down since the 2018 Medium Term Budget Policy Statement (MTBPS) due to a fragile recovery in employment and investment, and a less supportive global trade environment.
It added that the weaker outlook projects a slow improvement in production and employment following poor investment growth in 2018, and a moderation in global trade and investment. With these conditions, few jobs or none at all will be created.
African Development Bank foresees jobs bloodbath
The African Economic Outlook 2019 released by the African Development Bank shows that real GDP growth is projected to increase to 1.7% in 2018/19 and 2.0% in 2019/20. The drought has improved in most provinces, and prospects in the agricultural sector are favourable.
However, it says growth in industry and services is expected to remain sluggish. This therefore means fewer jobs will be created in the next few years.
Stats SA Quarterly Labour Force Survey more telling
Released on 12 February 2019, the results of the Quarterly Labour Force Survey (QLFS) for the fourth quarter of 2018 released by Statistics South Africa revealed that while the official unemployment rate decreased by 0,4 of a percentage point at the national level in Q4: 2018 compared to Q3: 2018, the rate increased in two of the nine provinces, namely KwaZulu-Natal (up by 2,6 percentage points), and Eastern Cape (up by 0,5 of a percentage point). It also showed that during the fourth quarter of 2018, the informal sector recorded employment losses of 15 000 and the number of discouraged work-seekers increased by 108 000. The next release of statistics on jobs will be out on Tuesday next week and there is little hope that it will improve, further turning Ramaphosa’s job dream into a pipe dream.
Moody’s expect SA to recession
In June this year, Moody’s rating agency said the odds that the South African economy could experience a technical recession in 2019 are high. It attributed it forecast to persistent economic weakness and lacklustre domestic private sector demand. It relates to both household spending and investment, and the detrimental impact of widespread power outages on the manufacturing and mining sectors. Under such circumstances, no jobs can be created.
Reserve Bank hit the last nail on the jobs coffin
Announcing the latest rate cuts on Thursday last week, the Governor of the South African Reserve Bank Lesetja Kganyago said the bank, again reduced its economic forecasts for 2019 to 0.6%, down from 1.0% in May because the economic outlook was bleak. He painted a picture of an economy that is weak and that cannot create the jobs Ramaphosa promised the nation in June.