22 January 2013

South Africa: Minister Patel Must Admit That New Growth Path Has Failed to Create Jobs

press release

Deputy Minister of Economic Development, Hlengiwe Mkhize, yesterday cast serious doubts on the likelihood that the country will reach the five million jobs target set out in the New Growth Path (NGP). This depressing conclusion is supported by research carried out and presented by the International Labour Organisation (ILO) and Oxfam over the last week.

The time has come for the Minister of Economic Development, Ebrahim Patel, to finally admit that the NGP has failed to chart a new course.

Ms Mkhize stated that her department is "not going to achieve them (job-creation goals) if we don't systematically look at priority sectors". This is precisely what we have argued in Parliament, in response to which we have received persistent denials from the Minister. Ms Mkhize went on to point to the problems in the relationship between the private sector and government as a result of the "cynicism of business which is sometimes understandable".

According to the International Labour Organisation's (ILO's) Global Employment Trends 2013 released yesterday, South African employment growth rates for 2012, 2013 and 2014 are projected to be subdued at 0.8% to 2% per year.

Taking the mean estimate of 1.4% employment growth, the number of people employed in South Africa each year would grow by 191 000, some 309 000 new jobs shy of the 500 000 new jobs per year required to reach target of five million new jobs by 2020.

The current government's inability to create jobs is further underlined by Oxfam International's recent "Cost of Inequality"report, released last week Friday. The report highlights the fact that inequality in South Africa has gone up in the last 20 years. This is a direct result of the national government's failure to create jobs on the scale required.

In light of this, the DA will be asking Minister Patel to admit that the NGP has failed on job creation, only three years into its ten-year lifespan. We will also be asking the Minister to justify the R674 million of public funds appropriated for his department when its prodigal plan has clearly failed to deliver.

South Africa needs a plan grounded in the economic realities of the current socio-economic landscape. We need a plan based on thoughtful research and international best practice. To this end, the DA's Plan for Growth and Jobs and the National Development Plan offer workable alternatives to foster economic growth and job creation.

It is time for Minister Patel to give up on the charade that is the NGP. South Africans deserve a serious plan to address the serious challenges we face.

Haniff Hoosen, Shadow Minister of Economic Development

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