Investing in infrastructure to create jobs
Publish date: 08 November 2017
Issue Number: 212
Diary: Legalbrief Workplace
President Jacob Zuma has reiterated government’s commitment to investing in infrastructure as a means of stimulating growth and creating jobs. HR Pulse reports that fielding questions in the National Assembly, he said: ‘Such spending is the equivalent of planting the seeds that will grow the economy. Our unwavering commitment to infrastructure development was strongly demonstrated during the recent medium-term budget policy statement, when the Minister of Finance announced that R948bn will be spent on infrastructure over the next three years. This will certainly result in further job creation and stimulation of economic growth.’ The President said the increased investment in infrastructure in the country in recent years has served as an economic boost during the period when the economy was faced with enormous pressures. He said in SA, as a result of the additional infrastructure investment, the economy has maintained growth, albeit at modest levels, until this year. He said the establishment of the Presidential Infrastructure Co-ordinating Commission has yielded positive results and enables government to keep track of infrastructure spending and eliminate bottlenecks in the implementation of projects.
The manufacturing sector says it remains a job-creating engine in the economy and will unveil a plan to generate 1m direct jobs in the next decade, says an eNCA report. Insiders say the sector has the ability to ensure long-term, sustainable growth that will reindustrialise the economy. However structural barriers must be removed. ‘We don’t have adequate aggregate domestic demand in SA. This can be augmented we think by import substitution. We import too many products,’ said Andre De Ruyter Manufacturing Circle chair. ‘We as consumers generally should be far more critical about products proudly made in SA. We should encourage exports a lot more. Our ports in SA are 88% more expensive than the global average… if we can address some of those structural blockages we will see manufacturing growing and investing.’ The report says the Manufacturing Circle will launch its Map to a M i l l i o n plan soon, which will outline the creation of 1m direct jobs, over a 10-year period.
Hundreds of new direct and indirect jobs are expected to be created by a new R3bn investment by the Ford Motor Company of Southern Africa (FMCSA) to further increase the manufacturing capacity of its Silverton plant in Pretoria. According to Business Report, the latest investment by Ford follows its R2.5bn investment in the plant last year to produce the new Ford Everest, which created about 1 200 new jobs. The increased production capacity and volumes produced would create additional direct and indirect jobs, but Ockert Berry, the vice-president of operations for Ford Middle East and Africa, declined to quantify how many new jobs would be created. However, he said it would not be incorrect to conclude that if production volumes increased by 27% that employment would increase by a similar percentage despite increased automation in the plant in the body shop, paint shop and trim final section. Berry emphasised that the increased automation was focused on specific quality outcomes and to take the plant to ‘the next level’ in terms of quality. FMCSA currently has between 3 500 to 4 000 direct employees, including those at its engine plant in Struandale, Port Elizabeth.
But the changing structure of SA’s labour market means the country is unlikely to see any reduction in its high levels of unemployment. The Times reports that this is one of the key findings of the latest Fast Facts report published by the Institute of Race Relations. IRR analyst Gabriela Mackay notes: ‘This is particularly worrying as the change in structure means that there is no longer a large low and semi-skilled sector capable of absorbing the bulk of the labour force lacking the skills and education to find jobs in the skilled sector. Today‚ education is the key factor; the absorption rate is highest for those with a tertiary education‚ at 75.6%‚ while for those with matric it is 50.3%.’ Another worrying trend in the report is that SA’s overall labour force absorption remains low at 43.3%‚ with young black people being most affected by unemployment. Mackay said: ‘SA’s economy is hampered not only by a low demand for commodities‚ but also the combined impact of poor policies and frequent cabinet reshuffles‚ which‚ together‚ have resulted in the loss of investor capital and‚ thus‚ the scope for creating jobs. It is unlikely that there will be any improvement‚ and we can expect to see a continuing trend of job shedding and increasing unemployment rates.’