Concrete steps and sustainable projects needed
October 26, 2017
Johannesburg, South Africa: The South African Chamber of Commerce and Industry (SACCI) warned that youth unemployment was a ticking time-bomb that required an urgent allocation of resources.
SACCI was responding to Finance Minister Malusi Gigaba’s Medium Term Budget Policy Statement (MTBPS) tabled in Parliament yesterday.
SACCI said it welcomed the MTBPS delivered by the minister, but while the minister dealt with the contextual issues and gave an overview of the challenges and what the government intends to do in the economic environment, they were hoping that he would be more explicit with specifics on the agenda to deal with the challenges facing South Africa.
“We are anxious and conscious of the risk and challenges posed by youth unemployment,” SACCI Chief Executive Officer Alan Mukoki said in a statement.
Mukoki said in terms of figures released by Stats SA, youth unemployment was reflected at 38%. Additionally 32% of youth between the ages of 15-24 were neither in education, training or employment.
“We believe this is a ticking time-bomb that requires an urgent allocation of resources as it may create political and social instability over the next 10 years,” Mukoki said.
SACCI urged the government to put concrete steps and resources, that were backed by specific and sustainable projects and programmes, in place to address the risk.
The National Development Plan (NDP) has projected that 24 million jobs will be created by 2030 on the back of an average economic growth of 5%.
“We are far from this projection and we were hoping that the Minister would give a clear and comprehensive detail on the specific plans, ideas and projects being rolled out to ignite economic growth."
In his speech Gigaba said National Treasury had revised economic growth projections downwards from 1,3% to 0.7% for 2017. “Growth is subsequently expected to increase slowly reaching 1.9% in 2020,” the Minister said.
"We were also hoping that the Minister would deal with how the funding shortfall would be addressed" Mukoki said.
Gigaba announced that government would dispose of its Telkom shares in order to cover a shortfall of R3.9 billion.
He said the expenditure ceiling was threatened in the current year as a result of government’s recapitalisation of South African Airways (SAA) and the South African Post Office (SAPO). SAA is set to receive total of R10 billion in bail out money – R5.2 billion already being paid through an appropriation and the remaining R4.8 billion to be paid in March, as well as R3.7 billion to recapitalise the SA Post Office
Mukoki said the selling of the Telkom stake was not expected to yield more than R14 billion and the deficit still needed additional funding or a constriction in government expenditure in the absence of increasing taxes.
Mukoki said SACCI welcomed the initiative on the start-up fund being developed via the small business development ministry and this should be encouraged. “We also welcome the Minister’s pronouncements on dealing effectively with governance and performance of our State Owned Entities (SOE). In his speech Gigaba said addressing this required not only stabilisation measures at troubled entities, but a broader restructuring of state-owned companies and an acceleration of reforms.
“In the rapidly changing world, decisive and specific ideas and projects would be required to address the significant challenges we face,” Mukoki said.