EDITORIAL: Promises over shambolic joblessness ring hollow

When President Cyril Ramaphosa stands up to deliver his state of the nation address next week, we can be sure that he will as always talk about unemployment and the need for job creation, and that he will assure us that this is a critical priority for government.

But his repeated assurances are becoming ever more empty amid the jobs omnishambles that SA’s economy has become.

It is not just Eskom and the energy crisis though that looms large as employers across a range of industries struggle to cope with the fallout of stage 6 load-shedding. It is also Transnet and the logistics crisis that is putting jobs at risk as miners struggle to get their exports to market. It is the breakdown of law and order that is threatening investment, particularly in KwaZulu-Natal.

The most recent jobs figures paint a relatively positive picture, but there should be no illusions about SA’s escalating unemployment crisis. The economy created 1.5-million jobs between the third quarter of 2021 and the third quarter of 2022, Stats SA’s data shows. But that is no more than a bounce back from Covid-19’s ravages; it is not nearly enough to compensate for the 2-million jobs lost in the worst of the pandemic. Nor is it even close to enough to tackle the unemployment rate, which at almost 33% is one of the world’s highest.

That would require sustained economic growth rates of 4%-5%, or 2%-3% just to stabilise the unemployment rate. But SA’s growth is now forecast by the Reserve Bank to come in at well under 1% a year over the next three years. Even the rather bullish (and probably outdated) forecast this week from the IMF is at just 1.2% for this year. The global economy is slowing, as is SA’s. The outlook for jobs is bleak. And it’s getting worse in the current omnicrisis.

Take the case of Denny Mushrooms. As BusinessDay reported last week, SA’s number one fresh mushroom producer shut its KwaZulu-Natal plant recently and retrenched its 300-strong workforce after the plant was destroyed in a case of suspected arson in September. The company has not said it will shut the plant forever, muttering about the need to check out alternative energy sources before it can decide whether it is viable to rebuild it. But sources reportedly said the decision had been influenced by the 2021 KwaZulu-Natal riots, as well as by incidents of labour intimidation that preceded the fire. It is possible the facility may never reopen. It is possible too that there are many more closures like this in the province.

Then there is the coal export crisis. Transnet’s collapse has seen coal exports through the Richards Bay Coal Terminal (RBCT) plummet to 1993 levels, with RBCT reporting it processed just 50-million tonnes in 2022 from a peak of 76-million six years ago. The collapse of the heavy-haul line that transports the coal from the mines to the coast reflects the large number of Transnet locomotives that are out of commission as well as cable theft and criminality. It has meant that coal miners have had to cut production while global coal prices are racing. If it continues it surely must put jobs at risk in a sector that is a significant employer — the coal industry employs about 80,000 people. And Transnet’s rail woes are affecting other mining and agricultural exporters too.

It all rather pales compared with the devastating impact of stage 4 and stage 6 load-shedding, especially on the small and informal sector businesses that provide much of SA’s employment. Load-shedding is hitting larger businesses too, driving up the cost of doing business, crushing expansion plans and prospects for new investment, and putting existing jobs at risk. The chicken and sugar lobbies tend to shout the loudest, as always, but there is no doubt that the impact across the economy and across supply chains is spiralling.

Before Ramaphosa can even start talking about job creation he might want to look at saving existing jobs. That means tackling the dysfunction in government that is the underlying cause of the failures at Eskom, at Transnet, and in law enforcement. Failing to do that will put ever more jobs at risk, in an economy that already has a profound jobs problem.