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SA 'turning the corner on unemployment' says Mpahlwa

by Shaun Benton
on 01 Jul 2008
BuaNews Online
BuaNews Online

South Africa appears to be turning the corner on unemployment, says Minister of Trade and Industry Mandisi Mpahlwa, pointing to statistics showing a fall in unemployment as well as a steady rise in people's average incomes.

Mr Mpahlwa was speaking to reporters during the second cycle of report-backs on progress in the Programme of Action by government's Economic, Investment and Employment cluster on Tuesday.

With "truly significant" growth experienced over the past decade, and more recently 5.4 percent growth on gross domestic product in 2006, followed by 5.1 percent growth last year, fixed investment in the economy has risen as well, from 15 percent in 2004 to 21 percent in 2007, he said.

Real income per capita - that is, the average income per person - has risen at around four percent per person annually since 2004.

Around the same time, the official rate of unemployment fell from a high of 31.2 percent in March 2003 to 23 per cent in September 2007, Mr Mpahlwa said.

"This translates into an increase of approximately 1.8 million employed people in South Africa, a significant development that shows that the economy has turned a corner on unemployment," he said, adding that government is working to reinforce positive trends where they exist.

Government is going to "scale up" its policy of making interventions where needed to reach its objectives of reducing poverty and unemployment, which is integral to its industrial policy, the minister said.

He added, however, that while providing incentives and even finance to key sectors remains an area of ongoing work, what is important is to improve inter-departmental coordination, to integrate industrial policies throughout the government.

Overall, interventions by government in a wide range of areas are going to be "more vigorously pursued", as inefficiencies are identified and strong areas are boosted further.

Also, publicising opportunities on "second-economy initiatives" - such as communication initiatives being undertaken by the Government Communication and Information System through print and broadcast media - will be receiving more attention going forward, he said.

Business Process Outsourcing (BPO), such as, for example, call centres servicing customers post-sales, remains a key growth area and one of the central planks of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA).

After a couple of years of focus under the Asgi-SA, the BPO sector has now "begun to really take off", said Mr Mpahlwa, with the first 1000 graduates of the BPO Monyetla Work Readiness Programme all employed in May - with the absorption rate of these learners at 100 percent.

There is a programme to train another 2000 unemployed youth during this financial year under this "second-economy strategy", as four call centres have been launched, creating 315 jobs.

Key to the long-term success of this programme is telecommunications pricing, adding that himself and the Minister of Communications are in ongoing discussions with Telkom over a "pricing dispensation" for this.

The two ministers will soon pronounce BPO a "strategic sector" for advancing developmental goals, Mr Mpahlwa said. - BuaNews


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