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While the latest Quarterly Labor Force Survey presents a dire picture regarding the unemployment crisis in the country, Labor and Employment Minister Thulas Nxesi believes that the basket of interventions will eventually lead to a better situation.
“It would be unwise to paint an optimistic picture, given the figures presented by Statistics South Africa, but the situation is not hopeless.
“In fact, the second-quarter figures relate to when the lockdown was extreme and since then the economy has opened up a bit and more industries have opened,” Nxesi said Monday.
The latest figures show the devastation of the second quarter of the pandemic blockade, which seriously affected economic activity and caused a contraction of the real gross domestic product of 51%; a 47.9% contraction in the production of the manufacturing industry; a drop of 67.6% in the activity of the commercial industry; a 76.6% decrease in the construction of both residential and non-residential buildings, and the stoppage of works.
Nxesi said that in the face of all the negative figures, it is gratifying to note the role played by the Department of Employment and Labor, through the Unemployment Insurance Fund (UIF), which boosted the economy through cash injections to workers .
In April and May alone, the department injected R32 billion into the economy to allow workers to survive the worst of the economic crisis.
However, Nxesi recognized that a much more comprehensive government response is critical to boosting the economy.
“That is why the government, with the support of the social partners of the National Council for Economic Development and Labor (NEDLAC), developed a plan for reconstruction and economic recovery.
“This should place the country on the threshold of a significant opportunity to change the economy and unlock the job creation potential that we seek,” Nxesi said.
The minister also noted that the most devastating impact has been on youth employment, which has seen the largest increase of 928,000 jobs eliminated in the 25-34 age group; with the second largest (562,000) in the 35-44 age group, and the third largest (416,000) in the 15-24 age group.
“We are encouraged by the direct and positive intervention of the president, who has announced a presidential employment stimulus designed to support a spectrum of opportunities focused on youth, people with disabilities and women.
“In the first phase of this program, the government has budgeted R19.6 billion for the 2020/2021 financial year. This is in addition to existing government employment programs.
“More importantly, it will bring young people into the economic sphere, which is critical at this time,” the minister said.
Other entities in the department, which are also involved in the effort to mitigate the worst effects of the economic downturn, include:
- Productivity SA, which participates in supporting companies in difficulties by injecting funds of R140 million from the FIU;
- The Temporary Aid Plan for Employers / Employees, which continues to provide support to companies in difficulty so that they can request funds to be able to pay part of their wages and salaries, which is also financed by the FIU;
- The Commission for Conciliation, Mediation and Arbitration (CCMA), which has been working closely with companies and has helped save 20,434 jobs this year to date, from a possible layoff of 53,702, especially in industry of mining and transportation; Y
- The Compensation Fund, which to date has received 11,233 claims and oversaw a disbursement process of more than R13 million for illnesses, injuries or deaths in service during the pandemic.
Nxesi said that one of the critical pillars of the government’s economic recovery plan, which has the potential to create jobs, is in the area of infrastructure development, whose focus will be on investment, delivery and maintenance.
To achieve this, the Minister said the government is soliciting and attracting private sector investment in infrastructure delivery, as part of building broad-based public-private partnerships, as well as through the South African Investment Conference ( to be held from November 17 to 18, 2020).
“The criticism has been in the past that the government is good at making plans, but not so good at implementing it.
“That is what makes the current recovery plan different: attention to process, coordination, monitoring and evaluation, and implementation – what the President calls ‘united government’, so that we no longer work in silos, but that we combine our efforts and resources to maximize results and service delivery to our people, ”said Nxesi.
Read: Government Plan to Create 800,000 Jobs in South Africa – Where to Hire and How to Apply
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