Ramaphosa Vows "South Africa First" at Jobs Summit
Late last week, South African President Cyril Ramaphosa held a two-day Jobs Summit in Midrand, South Africa, where he set forth a number of resolutions to address the country’s pervasive fiscal and economic woes.
At the summit’s conclusion, stakeholders signed a framework agreement outlining a series of steps to boost the economy and create jobs. The agreement includes three primary measures: addressing staggeringly high rates of unemployment, promoting local demand and support for South African exports, and restoring confidence to investors in the private sector.
“Unemployment is the greatest challenge facing our country,” said Ramaphosa. “Extreme unemployment in this country is the product of an economy that for several decades has been starved of any meaningful investment in its human capital.”
In the second quarter of 2018, South Africa’s unemployment rate rose to 27.2%, one of the highest rates among the world’s major economies. The rate of unemployment is 38.8% among youths and 17.8% among adults.
In order to curb such high numbers, Ramaphosa announced plans for deals between the government and the private sector that would create over 275,000 jobs. These deals would cover multiple sectors of the South African economy, including agriculture, mining, and manufacturing.
In addition to promoting job creation, Ramaphosa has also emphasized job preservation. One deal will require companies to explore “all possible options” prior to laying off employees, including foregoing dividend payments and reducing the size of executive salaries. In addition, Ramaphosa seeks to raise the quality of job training, provide an extension of tax incentives for companies creating jobs for youths, and pursue financial sector investments in black-owned industrial firms.
“South Africa First”
A cornerstone of Ramaphosa’s resolutions is the necessity of increasing domestic demand. He urged companies doing business in South Africa, government entities, and consumers to purchase locally-produced goods as a way to both create and preserve jobs.
“If we do not buy the food that comes out of South African soil, there will be no farms and no farmworkers. If we do not buy the goods made by South African hands, there will be no factories and no workers. The most direct way for South Africans and South African companies to create jobs is to buy only South African products,” said Ramaphosa.
The president also emphasized the need to more aggressively promote South African exports. He mentioned this in the context of recent efforts made across the continent toward greater regional integration, specifically referencing the establishment of the African Continental Free Trade Area.
The South African economy suffers from a lack of trust between the government and the private sector, largely owing to severe corruption under former South African president Jacob Zuma.
“Trust and confidence have been lost,” stated Ramaphosa. “We have since the beginning of the year been involved in the rebuilding of trust [...] and addressing corruption.”
One of Ramaphosa’s solutions to this issue is a plan of increased accountability. A task team, which will report to the presidency on a quarterly basis, has been created for the purpose of monitoring the implementation of these new resolutions. In addition, the president has called for another job summit to be held after two years in order to evaluate progress.
An investment summit, set to take place in two weeks, will put Ramaphosa’s current resolutions to the test.
“We are going to that investment summit informing [the local business community] that we have come up with more than 70 interventions that we are going to embark on to create jobs, strengthen the economy and lead our economy towards the recovery path,” said Ramaphosa. “This summit has been a most important process that we have embarked on.”