DUMA GQUBULE: ANC not interested in using the big policy levers to boost jobs

The governing ANC’s election manifesto made me want to weep. According to a Change Starts Now poll, jobs are the number one priority for 75% of voters — way more than the cost of living at 21%. The people want jobs, but the ANC has promised them “work opportunities” or “piece jobs” as we call them in disparaging township lingo. The party seems to have given up on itself, and does not want to address the jobs crisis.

SA has the highest unemployment rate in the world. There are 11.7-million unemployed South Africans, and more than 700,000 annual new entrants into the labour market. There are three macroeconomic policy levers to confront the crisis. We need a GDP growth rate of at least 6% a year, industrial policies that increase the labour intensity of growth, and we need to significantly expand public employment programmes.

Any party that does not provide a credible path towards achieving full employment — an unemployment rate of 5% or less — is wasting our time. The ANC manifesto says nothing about macroeconomic policy, except a deliberately vague statement that can be used to justify anything, including the current failed policies. It has no GDP growth or jobs targets and says nothing about how it will grow the economy and reverse the “Great Stagnation” of the past 16 years, during which GDP per capita has declined.

On the current trajectory — an annual GDP growth rate of 1.5% — the number of unemployed people will increase by 2.4-million to 14.1-million over the next five years. The unemployment rate will increase to 43.9% by the end of 2028. This forecast is based on a labour force growth rate of 2.4% and an employment multiplier — a measure of the relationship between GDP growth and job creation — of 0.9.

SA does not have a proper industrial policy and everything the manifesto says about localisation and changing the structure of the economy is hot air that it has been talking about for 30 years. There cannot be an industrial policy within the context of austerity. Industrial policy spending is an insignificant 0.3% of GDP. And the National Treasury has cut the department of trade, industry & competition’s budget by R3.1bn during the three-year medium-term expenditure framework (MTEF) period.

Industrial policy is about changing the structure of the whole economy. But SA has 10 industry master plans that cover less than 15% of total employment. By comparison, China has more than 1,600 government guidance funds to achieve industrial policy objectives. Each sector plan has a guidance fund and numerous other policy tools provided by the government and the central bank. It is either we transform the economy or we don’t, but the ANC does not want to achieve structural transformation.

The ANC manifesto says: “Over the next five years, we will expand public employment to sustain 2.5-million work opportunities.” It is not clear if this is an annual target or one that has to be achieved cumulatively over five years. But SA already has three public employment programmes — the presidential employment stimulus (PES), the expanded public works programme (EPWP) and the community works programme (CWP) — that will provide 1.8-million work opportunities in 2023/24.

But the Treasury has cut the PES budget by R2bn for 2024/25 and slashed the budgets of the EPWP, the CWP, the department of employment & labour and the National Youth Development Agency by R8.2bn during the MTEF period. The budget provided no further funding for the PES — a successful programme that provides some real jobs — after 2024/25. The reality is that the Treasury has a plan to decimate public employment programmes to achieve a primary budget surplus.

The government, and nobody else, controls the levers of macroeconomy policy to get SA on a path towards full employment. But the ANC has shown no interest in using them to grow the economy, achieve structural transformation and expand public employment programmes.

• Gqubule is research associate at the Social Policy Initiative.