Cosatu calls for reconstruction of SA economy to address unemployment

The Congress of South African Trade Unions (Cosatu) has reiterated its call for the reconstruction of the South African economy in the wake of the alarming third-quarter unemployment figures released by Statistics SA (Stats SA) on Tuesday.

South Africa’s official unemployment rate increased to 34.9%, compared to 34.4% in the second quarter of this year, according to Stats SA’s Quarterly Labour Force Survey (QLFS).

The expanded definition of unemployment – which includes those who have given up looking for jobs – stood at 46.6%, with women and young people bearing the brunt of South Africa’s joblessness.

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Cosatu bemoaned that the high levels of unemployment continued to worsen regardless of economic growth rates post the relaxation of government’s hard lockdown levels since the second quarter of 2021.

The trade union federation said this demonstrated the “non-employment generating growth trajectory” of the country that must be addressed through the reconstruction of the South African economy. 

Vaccinations

Aside from the reconstruction of the local economy, Cosatu said government should ramp up its vaccination drive to achieve herd immunity in order to avoid new variants of Covid-19 and further lockdowns that damage the economy.

The labour federation said vaccination was not only a tool to save lives, but also helped to save livelihoods and jobs.  

“The South African economy is currently vulnerable due to the Covid-19 pandemic and the potential of lock out from the rest of the world. South Africa is vulnerable to Covid-19 variants because of low levels of vaccine uptakes by members of society.  

“Further lockdowns in response to rising Covid-19 numbers are likely to worsen unemployment numbers, and this will result in higher unemployment statistics in the near future,” said Cosatu national spokesperson, Sizwe Pamla, in a statement.

Manufacturing sector

Cosatu said government’s Economic Recovery and Reconstruction Plan had not yielded the employment numbers necessary to reduce the level of unemployment because localisation and manufacturing initiatives were yet to be realised.

The plan, outlined by President Cyril Ramaphosa in October last year, aims to limit the immediate impact of the Covid-19 pandemic on vulnerable workers and households, and to revive economic growth.

“The manufacturing sector remains a key component and the backbone of any industrialised economy.  

“Business and government must come together to realise the commitments for local manufacturing at a rate and scale that can absorb labour and drastically drive down the unemployment rate.”

Cosatu urged business and government to come together to realise the commitments for local manufacturing at a rate and scale that can absorb labour and drastically drive down SA’s unemployment rate. 

Repo rate

Cosatu criticised the South African Reserve Bank (Sarb) for increasing the repo rate by 25 basis points in November.

Cosatu said the “misguided trajectory of the Reserve bank to raise the repo rate is the Achilles heel of an ailing economy”.  

“Cosatu has reiterated it’s disappointed by the South African Reserve Bank’s decision to increase the repo rate by 25 basis points The Reserve Bank’s monetary policy is a critical instrument for development and the reserve bank should align its policy to broader economic development.

“Its mandate cannot just be limited, only, to keeping inflation under control, but it also needs to focus on supporting economic growth and job creation too.”

Load shedding

Cosatu also blamed Eskom’s power crisis for the high levels of unemployment, saying energy security was at the heart of economic performance and job creation.

“Eskom’s debt and load shedding problems cannot be wished away. This requires all major role players and stakeholders to strategies and come up with a turnaround plan that will see Eskom turning the tide on energy insecurity. 

“Load shedding costs the country billions in revenue each day and as a result worsens unemployment levels. The proposals to increase Eskom’s energy generation are a step in the right direction but it will amount to nothing if the dept crises continue to be an albatross around the neck of the power utility.”

Compiled by Thapelo Lekabe

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