Having made many promises that failed to increase employment for young people during “six wasted years”, President Cyril Ramaphosa made a ludicrous pledge at an election rally in Cape Town at the weekend to create 1-million jobs a year over the next five years.
I understand that the ANC is desperate to win the election, but the gaslighting and insulting of the intelligence of South Africans must stop.
Since he became president in February 2018 Ramaphosa has announced numerous initiatives to address the youth unemployment crisis, but all of them have failed as 231,000 young people (aged 15-34) lost their jobs during this period.
The number of unemployed young people increased by 918,000 to 6.8-million during his presidency. The youth unemployment rate increased to 53.7% from 49.1%. There are now 8.8-million young people who are not in employment, education or training.
In his speech to first-time voters in Langa township, Ramaphosa said the ANC government had created 8.7-million jobs, as employment increased to 16.7-million from 8-million in 1994. Leaving aside the fact that serious researchers ignore the dodgy 1994 October household survey, his speech failed to explain the context.
According to a 1998 publication, "Unemployment & Employment in SA", written by former StatsSA head Mark Orkin, SA had a labour force of 11.6-million in 1994. This comprised 8-million people who were employed and almost 3.7-million who were unemployed. The expanded unemployment rate was 31.5%.
Since then the labour force has soared by 16.7-million people to 28.4-million during the fourth quarter of 2023. The number of unemployed people increased by 8-million to 11.7-million, and the unemployment rate increased to 41.1%.
During the past 30 years the economy grew by an annual average of 2.4%, which was too low to create jobs for the 558,000 people who entered the labour market each year and the 3.7-million who were unemployed in 1994.
The employment multiplier, which measures the relationship between GDP growth and jobs, was about 0.9. The target should be to have a GDP growth rate that is high enough to create jobs for both groups.
Though the ANC manifesto has no target for jobs, Ramaphosa invented one on the hoof: “Our jobs plan talks about creating 5-million jobs in the next five years,” he said. To achieve this target would require a GDP growth rate of 6% a year, which could result in an employment growth rate of 5.4% assuming an employment multiplier of 0.9.
With government’s irrational austerity policies it is reasonable to assume that there will be annual GDP growth of no more than 1.5% a year over the next five years.
But the economy is set to grow by only 0.9% in 2024 and 1.2% in 2025, according to the IMF.
With government’s irrational austerity policies — the 2024 budget cut R10bn from public employment programmes, R16bn from the National Student Financial Aid Scheme and R3bn from industrial incentives — it is reasonable to assume that there will be annual GDP growth of no more than 1.5% a year over the next five years.
Ramaphosa also made up a statistic about the number of people who will benefit from Unemployment Insurance Fund (UIF) training programmes, saying the government would deploy R21bn to train more than 2-million people.
However, at the recent launch of the UIF’s labour activation programme, employment & labour minister Thulas Nxesi said it would create 700,000 training, SME development and job opportunities without giving many details. But training does not create jobs and the “skills mismatch” theory of unemployment is a fallacy.
There were 973,000 unemployed graduates during the fourth quarter of 2023 and the economy does not have millions of unfilled vacancies. There are no jobs for young people, and 661,000 have lost their jobs over the past 15 years.
The government must stop raising the hopes of young people with empty promises about jobs, which cannot be created in an economy that is growing by less than 1.5% a year.
• Gqubule is research associate at the Social Policy Initiative.
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