Proudly sponsored by

The problem with the Presidential Employment Stimulus strategy

Its focus is on creating more taxpayer-funded jobs in the public sector (and it’s succeeding in that).
Phase 1 created hundreds of thousands of new jobs, and now Phase 2 begins. Image: Waldo Swiegers/Bloomberg

Last Thursday (October 14), through Minister in The Presidency Mondli Gungubele, Minister of Public Works and Infrastructure Patricia De Lille and Minister of Employment and Labour Thulas Nxesi, the Presidency announced the second phase of the Presidential Employment Stimulus (PES).

Believers in the ‘New Dawn’ and ‘Thuma Mina’ catchphrases will tell us there is a good story in “550 000 jobs and livelihoods that have [been] supported as part of Phase 1”.

However, delve a little deeper and the facts emerge, such as that most of the job opportunities are in the public sector.

For example, a Report on Phase 1 of the Presidential Employment Stimulus posted on the State Of The Nation website, shows the Department of Basic Education accounted for 319 482 jobs while the Department of Forestry, Fisheries and Environment created 39 631 jobs. Furthermore, the 117 770 livelihoods supported and 40 399 retained jobs were also in the public sector.

Seen this way, the PES is in a real sense a public sector employment project that is packaged as a new stimulus to job creation.

We should be worried that with local government elections a month away, our government leaders have been building up a grand narrative about progress, recovery and building a new economy.

Fixing the decay trap?

The economic and political realities that facilitated Cyril Ramaphosa presidency were alluring, replacing the alleged corrupt, incompetent and self-enriching leaders with the supposed opposite.

The past three years have made the preceding observation abundantly clear, and those economic and political pressures ensnared the incumbent and his administration in fixing the decay trap.

The ANC of Ramaphosa is the ANC of Zuma. Unfortunately, its favoured tool – resource mobilisation through an investment drive that raised R109 billion, shaped partially by Ramaphoria, is losing its efficacy because a leopard never changes its spots.

Although slightly different, there are clear continuities such as (i) the inability or reluctance to get the country and its economy out of crisis, and (ii) the economic decline. In the context of the current administration, before Covid-19, a decline in the economy had already begun.

Much has been expected from this administration; South Africans had hope that by enduring the crisis their situation might change for the better.

Instead, we have seen a country not on autopilot but one where the steering mechanism has wholly failed as the fires of unrest, violent protest and looting in July illustrated.

Same old, same old – but with new names

What cannot be stressed enough is that over time (here, I mean since the pandemic outbreak), the most disturbing aspect of the Ramaphosa-led government is it continuously disguising old ‘solutions’ as new ideas.

For example, on employment, the 2018 Job Summit and its framework agreement meant to create 275 000 a year by retaining current jobs, developing new ones and availing job opportunities.

Fast-forward to 2021, the government, as shown at the onset of this article, is doing the same thing, only calling it PES.

The Economic Recovery Plan (ERP) also harps on job creation and work opportunities.

As such, one of the greatest weaknesses of the current group of government leaders is in failing to look back and assess what has been done or achieved.

Additionally, the pronouncement with macro and micro implications is not accompanied by real action on the ground. The lockdown restrictions bear evidence to this.

How about a different approach?

A leader might take stock of, say, one project intended to aid the youth regarding assessing progress.

Such a leader with the nose on the ground might update the nation on the work carried out by the National Youth Development Agency (NYDA), what has been achieved and its role in helping the youth.

How have its programmes contributed to reducing graduate and youth unemployment?

First, by updating the public, that leader explains why a specific project failed or succeeded, and in so doing, explains why it is vital to support the Presidential Youth Employment Intervention and how NYDA activities fit into the intervention.

Second, since this administration’s constant preoccupation is with promises of job creation, why not explain how revitalising the National Youth Service can tackle youth unemployment – instead of being short on how, in what way, and when it will occur.

According to Gungubele, unemployment is the “single greatest challenge” South Africa is grappling with, therefore I don’t see why a confluence between projects and programmes aimed at tackling unemployment is a problem.

History repeating itself

As such, pardon my lack of excitement on the announcement of Phase 2 of the Presidential Employment Stimulus, which is clearly out of touch with the lived reality of South Africans.

For example, the R11 billion availed by National Treasury for PES2 will – if past experience is anything to go by – probably remain inaccessible to the intended recipients.

Ultimately, the pandemic has revealed or made more apparent that the government has no plan of getting South Africa out of the crisis.

Instead, our leaders’ response to Covid-19 shows the terrible and senseless economic pain they cause.

Disconcertingly, ERP and PES require a capable state. Ours is stripped bare of such capacity.

AUTHOR PROFILE

VIDEOS

COMMENTS   20

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

Great article!

They will never fix unemployment. NEVER.

When all you are interested in is “owning” the economy this is what you get.

Business people are replaced with politically connected rif-raf that acts like a parasite nothing else. This is mostly facilitated with BEE. We all know that is just a scam to loot. Cyril has said on numerous occasions BEE is here to stay.

He can call what he does whatever he wants. Its just his way to BS the population with a smile.

Who in his right mind thinks that a business will create jobs when run by parasites? Come on man!

Who invests in an economy when you know full well that the leaches will get hold of you before you even start.

Now you want to tell me a guy like Cyril does not know this? He is the facilitator of the total destruction of this country.

By the way the “jobs” they create like looking after children at school or after school is not a real job man. FFS what kind of job is that???

Touche’. Then the public must not forget the likes of politically connected job hopping back-door pseudo engineers, currentlty appointed to National Treasury working on structural reforms! Wherever SP worked from the Gauteng Provincial Govt., to National Dept. of Public Works, to JRA, he contributed little if anything other than to feather his own nest, all at the expense of the SA tax payers!!!

However, Transnet is retrenching 3000 workers and plan to cut their workforce by 10%. So, the government is actually cutting jobs and not creating jobs.

Dear EFF Commissar

To stimulate some serious debate, where do you stand on actual practical economic policy ?

Do you believe in things like blanket govt land custodianship, nationalisation of banks, confiscation of private property etc ?

Or do you prefer a free-market economy where private ownership is protected but with a way to blunt the sharp edges of inequality ?

Please, if you don’t mind, no rhetorical answers. Rather a thought-through perspective of your thinking please.

I think he does not have a stand but thinks he can wind up other MW bloggers only

Because of our high unemployment levels and the current established free-market economic system, we could easily adjust to a socialist market economy. It’s working in China and it will work here.

There’s no need to nationalize the banks for example, when you control the reserve bank. China doesn’t own Tencent Holdings but they still get to tell them, how to operate. But companies like Curro, Discovery and Octodec are a different matter.

We should be governed by the principle of “common prosperity”. A family should be allowed to own a home, but not 10. Education, healthcare and housing should be a human right, not a privilege.

A basic income grant is a necessity. The people at the bottom need hope and their basic needs fulfilled. Think of “Mazlows hierarchy of needs“.

People say we are all in one boat. But that’s not true. Some of us are in yachts and some are hanging on the side, hoping not to be left behind.

Th EFF are fascist wannabes. Just compare their manifesto to the 25 point plan of the Nazi party. Julius must sleep with a copy of Mein Kampf under his pillow, the totalitarian impulse runs deep. Arbeid macht frei!!!

Mice die in mouse traps because they do not understand why the cheese is free.
The same thing happens with socialism.

‘A family should be allowed to own a home’! You think?

When will people realise government’s cannot “create jobs”? If they could, would there BE such a thing as unemployment? Government’s can only provide a climate for growth and let the businessman create jobs.
But this government does everything to discourage
proper, lasting job creation.
Oh, and what sort of jobs ARE these? Is it “Decent Work”? Has our education system provided enough “decent” education for this new job market?

With all this taxpayer debt being created for fake job creation will there be more potholes or less? better service delivery or worse? improved maintenance of essential services or more of the same neglect?
I think we all know the answers.

During the past year the large private medical aids have all reported a drop in beneficiaries.

GEMS, the state medical aid, reported a huge increase in beneficiaries.

Perhaps Ramaphosa and the ANC believe there will be enough tax to pay everyone’s salaries and grants, once every employed person works for the state.

What could go wrong with this great leap forward?

South Africa is a market economy with a socialist government. Ramaphosa faces the same issues as Lenin did. We all know how that panned out. It won’t be any different for the ANC.

“There were two options, according to Lenin: Either the capitalists take over and drive out the Communists or capitalism is utilized by the proletariats and the peasants, while submitting and serving the State. There was always the chance that if capitalism overthrew Communism and became the dominant cause there could be, once again, the same old regime that was in previously in power, which would mean that all of the hard work of Lenin and his Party would have gone to waste and, in fact, would be to blame for the fall of Communism and the (technically) welcoming of the oppressive Imperialism, once again.”

In the end, capitalism always wins, because of basic human nature. People want to own the products of their labor or they won’t exert themselves at all. BEE is our form of land grabs. It is just another tax among the flood of socialist infringement on property rights. The ANC, like Lenin, creates its own unemployment issues.

Looking at how the government has been under Ramaphosa the conclusion is obvious. He is not a reformer at all, the only thing he reformed was replacing the Zuma/RET faction at the feeding trough with his loyalists.

Somehow I have more respect for Zuma than for Ramaphosa. At least Zuma didn’t pretend and we all knew exactly were we stood with him, Ramaphosa purports to be this economic reformer and yet nothing has changed as he continues to implement Zuma style policies.

But hey I forgot, it’s not the government’s fault but rather WMC or some other third force. I think we should exhume old Jan’s body in Jakarta and put him on trail, because it has to be his fault and certainly cannot be the fault of the current administration.

The problem IS the president…and his administration…. and his political party… and his band of corrupt Cadres

the problem is they still bickering on the past (just yesterday CR still trying to solve the death of Samora Machel???? please! ) they will never go forward never!

That very same “National Youth Development Agency (NYDA)” wasted a ton of money and concluded that a single job costs R5.6mil to create, whilst in the real world it costs R620,000 in SA and about R450,000 in the US.

I get very worried when the government creates jobs, because its tax payers that are paying the salaries something which the majority of the taxpayers never voted for.

If the NYDA actually worked, we would’t have 70% youth unemployment. What have they ever achieved.
The ANC should look at the countries with the worlds lowest unemployment and go and ask them how they do it, because rehashing the same failed policies again will only make the problem terminally worse.

One small problem. The ANC cannot start and run anything properly. As usual this is pre election hot air.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: