SA education and skills impeding jobs

Poor education and skills levels are
“serious” impediments to job creation in South Africa, which aims to create five-million jobs over ten years, Econometrix chief economist Azar Jammine said on Wednesday.

Speaking at a French-South Africa
Chamber of Commerce and Industry meeting, Jammine said it was hard to believe that the New Growth Path (NGP) would be more successful than its predecessors, such as the Reconstruction and Development Programme, the Growth, Employment and Redistribution strategy and the Accelerated and Shared Growth Initiative for South Africa.

“The NGP aims to create jobs, particularly in the labour intensive sectors of agriculture, mining and manufacturing, but there are some serious impediments to job creation in South Africa, the most obvious being poor education and skills levels,” he noted. He added that South Africa had fallen behind badly on education and was rated last of all the African countries on education standards at the end of 2010, particularly in mathematics and science.

Another hurdle for job creation was the unfriendly labour environment for employers, as the dominant perception was that job creation generated hassles, while insufficient support to small businesses and entrepreneurship also constrained job creation.

“Small and medium enterprises
proportionally create more jobs than large companies, but the regulatory environment is unattractive and it is difficult to access finance. It seems like government favours the golden triangle between itself, unions and big businesses,” Jammine said.

South Africa was lagging behind the rest of Africa regarding economic growth and Jammine forecast that Nigeria would be the most important African economy by 2020, resulting from the support and development of small businesses and entrepreneurship in the country.

However, all was not lost for the South African economy. Jammine noted that, although the local economy’s growth was weaker than that of other emerging markets, it was likely to outperform developed countries.

Government’s debt levels were also low, compared with that of developed economies, and a sound fiscal and monetary policy was sustained. “South Africa is a fully fledged democracy, which, coupled with media freedom and an independent judiciary and the sanctity of contract, prevents socioeconomic turmoil as is witnessed in the rest of Africa currently, breaking out here” Jammine pointed out.

He added that magnificent work was being done by nongovernment
organisations and that the private sector was still functioning relatively efficiently.

“South Africa can be a significant
beneficiary of the African recovery and growth and can also benefit from the Brazil, Russia, India and China- partnership, but we must focus on education and small business development to continue being competitive.” Jammine also said that South Africa should keep a close eye on the global economy’s impact on local markets.

He pointed out that the world economy was challenged by high personal and government debt levels, aging
populations and the economic fallout of Japan’s earthquake and tsunami.

There was also a possibility of a sharp slowdown in the Chinese economy, while rising commodity prices and inflation, together with a possible turnaround in global interest rates, may slow the global economy.


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