South Africa: The big picture of its unemployment crisis, according to labour minister Nxesi

By Xolisa Phillip, in Johannesburg
Posted on Thursday, 2 September 2021 16:56

A student reads a book in Soweto, South Africa November 10, 2006. REUTERS/Siphiwe Sibeko (SOUTH AFRICA)

South Africa’s education requires a rethink to produce the type of skills that are responsive to the needs of its economy, labour minister Thulas Nxesi tells The Africa Report.

In a wide-ranging interview following the publication last week by Statistics South Africa of the country’s record high second quarter unemployment figures, Nxesi cites the education system as a key impediment to employment.

The labour minister also pointed to South Africa’s economic reconstruction and recovery plan as a practical solution out of the escalating joblessness, particularly among the youth.

  • In the second quarter of 2021, the country’s official unemployment rate rose to 34.4%, according to data published in the Quarterly Labour Force Survey (QLFS). That is the highest rate recorded since the start of the QLFS in 2008.
  • Most concerning, the joblessness rates among youth in the 15-25 and 25-34 brackets were 64.4% and 42.9% respectively.

“There is something which [Gauteng education chief] Panyaza Lesufi said, which I liked, and I am paraphrasing, ‘If we can’t get education right, we will never get the country right. If we can’t get education functioning, we will never enhance our skills base. If we can’t enhance our skills base, then we will not get the economy working and growing’,” says Nxesi, adding, “it starts with our education system.”

“We must interrogate our education system. Is it giving the right skills? No, it’s not. What needs to be done? … Plumbers, electricians, welders, boilers, carpenters etc, those skills are in high demand; but our vocational system has not been able to respond to such skills,” he says.

“If we just focus on pumping people into universities and not at the technical level, that is not going to help us,” the labour minister cautions.

The shortage of vocational skills was made apparent when South Africa embarked on its new power stations building programme for the Medupi and Kusile plants. That programme stimulated demand for workers, including welders. However, South Africa has a skills deficit. As a result, thousands of people with those skills had to be recruited from abroad, according to the minister.

“That talks to the failure of our system,” Nxesi concedes.

The department of labour runs initiatives under the umbrella of public employment programmes. However, these programmes tend to provide short-term relief. Furthermore, a major flaw in these programmes included training the youth only for short periods. “After that, the young people would fend for themselves,” Nxesi says.

Another shortcoming was the fact that funding for training is the responsibility of another ministry: the department of higher education and training, which is also responsible for vocational institutions. That ministry is headed by Blade Nzimande.

Joining forces and resources

“We are interacting with higher education. We have formed various teams. Co-ordination has become key. I can’t have labour activation programmes using many resources, then we have the Setas [sector education and training authorities] under minister Nzimande also doing the same thing. […] We need to have a joined-up government where we are co-ordinating,” Nxesi tells The Africa Report.

But “the biggest issue is the relevance of these schemes: are we training people in terms of the relevant skills?” asks the minister rhetorically.

As Nxesi seeks to address the link between education, skills and jobs with his cabinet colleague, Nzimande, the labour minister argues the government’s economic recovery plan is crucial for overcoming South Africa’s unemployment problem.

To Nxesi, the economic reconstruction and recovery plan holds the key, in particular the government’s promise to roll out big infrastructure projects. “We think that will be the biggest job creator – if done properly,” he says.

“We need to focus on that [economic recovery plan] and how to speed up implementation of that plan, which government has adopted. We are busy with that,” Nxesi adds.

The link between education and unemployment

The new Black Business Council (BBC) president, Elias Monage, agrees with Nxesi that “the source of the [unemployment] problem is the education system.”

Monage elaborates that South Africa’s basic education is narrow and limited. The BBC president made a similar observation about higher education and training. “Higher education and training deal with academic education that is not linked to commerce or industries,” according to Monage.

“Occupational training [run through the Setas], which used to be housed in the department of labour, was migrated to the department of higher education and training. Unemployment, then, needs to be addressed by the ministers of basic education, higher education and training, and labour. In addition, the [minister of] … trade and industry,” Monage says.

“The education and training system must be geared and aligned to the needs of commerce or industries. These institutions produce graduates who continually join the ranks of the unemployed,” laments Monage.

The new BBC leadership, which was recently elected and assumed office, will be seeking an audience with those ministers to discuss ways in which to deal with the unemployment crisis.

The BBC is the biggest black business lobby group in the country.

Recovery plan needs legs

Gregory Mofokeng, the BBC’s new vice-president responsible for organised business, expresses concern that “not all stakeholders are putting their shoulders to the wheel.”

“On the infrastructure side, we are still not seeing a lot of projects being awarded. That is costing the country in terms of economic growth and the much-needed jobs we should be creating,” Mofokeng says.

“In the construction industry, our members are submitting tenders. [But] there are protracted delays in awarding those tenders. … [Those delays have] a domino effect on companies,” according to Mofokeng.

When these companies tendered, the firms also bulked up on capacity to implement some of the projects they anticipated being awarded. However, delays in awarding projects meant the firms opted to downsize, says Mofokeng.

Striking a balance

South Africa’s labour laws have also come under scrutiny. Critics often charge that the country’s labour relations framework and regulations are too stringent and not conducive for creating employment.

Stating that our labour market is not flexible is rigid. I don’t think all economists agree on this.

Nxesi does not agree with that assessment, but he acknowledges that it is the private sector that will create the majority of the jobs that South Africa needs.

“Stating that our labour market is not flexible is rigid. I don’t think all economists agree on this. If you look at some of the studies by the Organisation for Economic Cooperation and Development, some say our labour market is the most flexible. We do not agree with that,” Nxesi says.

“We think that we need to have a balanced approach, which protects both employers and employees. At the moment, our legislation is trying to balance the rights of all of them,” the labour minister adds.

“There are issues being discussed in relation to the [proposed] amendments to labour legislation. We will listen to that debate. We are not a government of just employers. We are a government of both employers and employees. All of them need to enjoy their rights as per the constitution,” Nxesi concludes.

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