While unemployment continues to plague South Africa, reducing it requires the economy to be on a labour absorbing growth path.

“Reducing South Africa’s high levels of unemployment requires the economy to be on a labour-absorbing growth path, as well as the development of entrepreneurship amongst our youth, in terms of interest, skills and creation of opportunities.

This depends on a successful reorientation of the economy to raise labour demand, with matching improvements on the supply side,” said Minister in the Presidency responsible for Planning, Monitoring and Evaluation Jeff Radebe. 

The Minister was speaking at the launch of the 2014 Development Indicators in Pretoria on Sunday. The data in the 2014 report reflects that one in four working age adults actively seeking employment remained unemployed during the period under review.

In 2014, youth unemployment reached a peak of 48.8% amongst the 15-24 year age group and 29.6% amongst the age group 25-34 years of age.

Whereas unemployment is exacerbated by lack of appropriate skills, this is also compounded by the shortage of suitable post-school education opportunities, noted the Minister.

Re-industrialisation and economic diversification are also necessary to boost job creation, and these factors are at the heart of the National Development Plan 2030 (NDP), the New Growth Path and the Industrial Policy Action Plan.

“The stark unemployment figures I have just outlined have continuously spurred government into action, and not into despondency,” said Minister Radebe.

Expanded Public Works Programme (EPWP)

Investments in infrastructure have boosted youth employment in construction with the Expanded Public Works Programme (EPWP) having expanded the intake and participation of young people.

The goal of the programme is to provide six million work opportunities by 2019 through the labour intensive delivery of public and community assets and services.

According to the report, employment in the EPWP continues to expand steadily.

“Short-term employment opportunities through the EPWP remain an important intervention to support unemployment working-age adults. In the year 2013/14, the EPWP created more than 1 million work opportunities. Infrastructure has created more work opportunities than other sectors,” noted the report.

While the EPWP has grown substantially with more than three-fold growth in four years, given the country’s focus on decent jobs, this is not sufficient to ensure a skilled, qualified and capable workforce, said Minister Radebe.

The Minister further added that it is not the primary role of government to create jobs, but rather to create an enabling environment for crowding in investments, in terms of the legislative and regulatory dispensation, stimulating economic growth and ensuring a peaceful labour environment, free of exploitation and disruption.

“Jobs created in the public sector are therefore largely a bi-product of successful service delivery, which is our main goal.”

As part of interventions to address the skills deficits, at least 30 000 young people have benefited from internships and learnerships in the public service since the decision to systematically implement this programme in 2009.

Meanwhile, the Industrial Development Corporation and the Small Enterprise Finance Agency have committed a combined R2.7 billion to finance youth-owned enterprises.

The National Youth Development Agency (NYDA) has also supported a range of youth-owned enterprises and cooperatives with more than1 000 youth-owned enterprises having benefited from the support of the NYDA.

The Development Indicators are an initiative by the Department of Performance Monitoring and Evaluation and tracks progress made in various areas of development.

There are 86 indicators in all which are clustered in 10 themes ranging from economic growth and transformation, employment, education and safety and security among others.

These indicators are used as criteria to measure progress and assist government to track, using quantitative measures, the effectiveness of government policies and interventions towards achieving the national goals in areas of development.

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Address by Minister Jeff Radebe on the occasion of the release of Development Indicators 2014: Extracts

On this blessed Sunday morning, let me first express my appreciation to you all for your presence here as we release to the people of South Africa the Development Indicators 2014. These indicators play a crucial role in assisting government and the public to track the effectiveness of government policies and interventions using aggregate data. They employ quantitative measures to track progress made in implementing policies against national targets based on data sourced from research institutions, government databases and official statistics.

The purpose of today’s panel discussion with industry and sector experts is to stimulate public discourse and ensure that these Development Indicators are understood in context by the stakeholders and the public. It also seeks to unpack the indicators in detail and get expert opinion and input from the target audience on what is working and how we could improve the reporting in future.

The launch of the Development Indicators occurs against the backdrop of yet another proud milestone in South Africa’s rich history – the discovery of Fossil Naledi. Many of the series we track in this publication date back to 1994 – not quite as far back as the Naledi fossils – but very useful in assessing how we have progressed from 1994. The government and the people of our country and indeed the entire world speak with one loud voice in congratulating the University of the Witwatersrand for this colossal achievement. May this pioneering work grow from strength to strength, and continue to place our country at the epicentre of the global map.

The Development Indicators publication is one of our key sources for tracking progress towards achievement of the National Development Plan (NDP) Vision 2030, on annual basis. Whereas the production of this publication predates the adoption by our country of the NDP 2030, the majority of indicators identified at the outset and tracked since then, remain pertinent to the present. This 2014 publication is useful in many respects. It is the first to be produced since government published the 20-year review in 2014, and thus further enriches the evidence-base that informs the design and delivery of our socio-economic development programmes.

The socio-economic development programmes implemented in partnership with all key stakeholders, and therefore have to be monitored and evaluated jointly with all our partners. Your presence here today fellow South Africans, to join hands with us as we take stock of milestones recorded to date, is of utmost importance.

Consistent with the Labour Force Surveys published by Statistics South Africa, the Development Indicators 2014 reflect that one in four working age adults actively seeking employment remained unemployed during the period under review. In 2014, youth unemployment reached a peak of 48,8% amongst the 15-24 year age group and 29,6% amongst the age group 25-34 years of age. Whereas unemployment is exacerbated by lack of appropriate skills, this is also compounded by the shortage of suitable post-school education opportunities.

Reducing South Africa’s high levels of unemployment requires the economy to be on a labour-absorbing growth path, as well as the development of entrepreneurship amongst our youth, in terms of interest, skills and creation of opportunities. This depends on a successful reorientation of the economy to raise labour demand, with matching improvements on the supply side. Re-industrialisation and economic diversification are also necessary to boost job creation, and these factors are at the heart of the NDP 2030, the New Growth Path and the Industrial Policy Action Plan.

The stark unemployment figures I have just outlined have continuously spurred government into action, and not into despondency. Measures undertaken by the public sector, such as investment in infrastructure, have boosted youth employment in construction. The Expanded Public Works Programme has expanded the intake and participation of young people. The recently launched employment tax incentive has encouraged private-sector employment of new entrants to the labour market.

As the NDP 2030 firmly asserts, it is not the primary role of government to create jobs, but rather to create an enabling environment for crowding in investments, in terms of the legislative and regulatory dispensation, stimulating economic growth and ensuring a peaceful labour environment, free of exploitation and disruption. Jobs created in the public sector are therefore largely a bi-product of successful service delivery, which is our main goal.

As is known, the global economic recovery since the downturn of 2008 has been slow and uneven across continents. The GDP growth rate in South Africa averaged 3.7% in the past 10 years, while annual growth rate averaged 1.5% in 2014. Our target, embodied in the NDP target is 5.4%. Key risk factors include poor global economic conditions which continue to impact on our export markets. Our mining sector is facing an acute crisis partly as a result of the dramatic drop in commodity prices. Current initiatives to stimulate growth include the government’s infrastructure build programme, the war room on electricity, the Operation Phakisa on the Ocean Economy and on Mining, and the 9-Point Plan.

Despite some fluctuations, our overall total investment in fixed capital as a percentage of GDP increased over the last 5-years, and reached 20,3% in 2014. The NDP target is 30% of GDP by 2030. This has resulted from the focused delivery on the government’s Strategic Infrastructure Projects, which included the upgrading of roads, schools and hospitals, with the provincial governments and local authorities in particular stepping up their expenditure. At the same time the level of real fixed capital expenditure is mainly reflecting ongoing spending by the electricity and transport sectors. Lower than expected private sector investment as a percentage of GDP remains a challenge to increasing overall investment. South Africa has not yet recovered to the 2008 level, which was driven largely by preparations for the 2010 Soccer World Cup.

Employment in the Expanded Public Works Programme (EPWP) continues to expand steadily, and reached 6 million at the end of 2012/13. Short-term employment opportunities through the EPWP remain an important intervention to support unemployed working-age adults. In the year 2013/14, the EPWP created more than one million work opportunities, the majority in infrastructure. The Community Work Programme has grown substantially from its modest roots in 2009/10 with more than three-fold growth in four years. However, given the country’s focus on decent jobs, this is not sufficiently crowding to ensure a skilled, qualified and capable workforce.

The National Development Plan envisages rural communities with greater opportunities to participate fully in the economic, social and political life of the country, supported by good-quality education, health care, transport and other basic services. An inclusive rural economy will be achieved through successful land reform, job creation and rising agricultural production.

The medium term strategic framework contains actions to grow and diversify the economy and reduce economic concentration. It focuses on ensuring growth in the core productive sectors of manufacturing, mining and agriculture, including stimulating new areas of economic growth such as the oceans economy. It includes actions to ensure that small business makes a much larger contribution to growth and employment creation.

Current initiatives to create jobs in agriculture are yet to manifest in the employment numbers. In 2014, however, the agriculture sector gained 28,000 jobs, followed by a 200,000 year-on-year increase in the first quarter of 2015.

Current economic conditions affect all sectors, but the agriculture sector is further constrained due to severe drought conditions.

Maintaining good agricultural practices is critical to improving the competitiveness of SA products in the markets, and as such Government has instituted the Good Agriculture Practice (GAP) audits.

South Africa must increase its investment in Research and Development (R&D). Although R&D expenditure as a percentage of GDP has increased over the years, it was only 0,76% of the GDP in 2011/12. A silver lining in this cloud is that there have been some shifts in the overall composition of Gross Expenditure on R&D (GERD) compared to five years ago, primarily as a result of the fact that the government has become the largest source of funds for R&D, and that the bulk of such funds are expended in the higher education institutions and science councils. Notwithstanding, increased investments in R&D are required to ensure that the country remains abreast of other nations in the production and application of scientific knowledge. In our vocabulary, this includes indigenous knowledge systems.

The Development Indicators 2014 include a section on good governance, where we monitor the efficiency of revenue collection, audit outcomes of the different spheres of government, the perceptions of corruption, transparency in budget processes, the public’s opinion on the delivery of basic services and the ease of doing business in South Africa. These measures are useful in assessing the NDP goal to build a capable and developmental state.

According to the Open Budget Index (OBI), South Africa continues to be in the top six of countries that institutionalise transparency initiatives in the budgetary processes. Notably, South Africa maintained the second position both in 2008 and 2013, an impressive record indeed.

South Africa’s corruption perception score improved in 2014. Despite the slight improvement, the perception of corruption in South Africa and our consequent poor performance when compared to other countries are not what they should be. Corruption in both the public and private sectors impedes service delivery, undermines public confidence in the state and the economy, and reduces economic growth, competitiveness and investment. A range of institutions and measures have been put in place since 1994 to counter corruption. These are being strengthened by mechanisms such as preventing public servants from doing business with the state and better management of the risks related to government procurement processes. A culture of zero tolerance needs to be developed across society, with businesses and citizens also playing their part.

Government departments must utilise the taxpayers’ resources, appropriated through Parliament, judiciously and ethically. Financial audit outcomes across national and provincial departments, municipalities and public entities have improved but are still not ideal. The MTSF target for municipalities is that at least 75% of municipalities should have unqualified audit opinions by 2019. Intense support is being provided to municipalities to develop and implement audit action plans through a dedicated initiative by the Department of Cooperative Governance. To date 167 municipalities have plans of action to prepare and submit Annual Financial Statements.

Tax revenue has grown significantly due to economic growth, a broader tax base and more effective revenue collection. The income tax register has been expanded from 3 million taxpayers in 1996 to almost 20 million in 2013. National Treasury’s 2015 Budget Review indicates that there is broad acceptance that South Africa’s tax system is fair and efficient. It forms a part of the country’s social compact, raising the revenue necessary to support public services. Over the past decade, the public finances have supported a large-scale redistributive effort to support national development and reduce poverty. National income, adjusted for inflation, is 50 per cent larger than it was 10 years ago. Over the same period, spending per citizen grew by 80 per cent in real terms, and real expenditure on social services doubled.

Since the global financial crisis began in 2008, however, increasing expenditure has been sustained by a large accumulation of debt. Rising debt-service costs threaten the sustainability of social gains achieved over the past decade. Government is aware that improving the quality of public spending, combating corruption, and eliminating waste and inefficiency are vital to maintaining the goodwill that sustains revenue collection.

The past decade has seen the rise of the black middle class. There was a significant shift in the country’s living standards measure between 2001 and 2013. Despite rising average income levels and the rise in the black middle class, levels of inequality have remained high, with the richest 10 percent of households capturing over half of the national income.

Fellow South Africans and distinguished guests, the key areas of good performance in 2014, as embodied in the Development Indicators 2014 Report are as follows:

• South Africans’ life expectancy increased by 8.5 years from 52.7 years in 2004 to 61.2 years in 2014

• Infant mortality improved from 58 to 34 deaths per 1 000 live births between 2002 and 2014. Over the same period under-5 mortality decreased from 85 to 44 deaths per 1 000 live births.

• South Africa contributed to halting and reversing the spread of HIV (Millennium Development Goal 6). The number of HIV positive persons on antiretroviral treatment in South Africa was at 2.8 million in 2014, which is a significant portion of the global target of 15 million. The number of people on antiretroviral treatment has now reached 3.5 million. The global target was achieved ahead of schedule in 2015. 

• The percentage of households in low living standards (LSM 1 to 3) decreased from 40% to 11% over the period 2000 to 2013

• The number of households has expanded from 10.8 million to 15.6 million between 2002 and 2014. Over the same period, the share of households accessing basic services increased from 77% to 86% in the case of electricity, from 80% to 86% for water infrastructure, which exceeded RDP standards. The proportion of households accessing sanitation went up from 62% to 80%. 

• The share of 5-year olds attending early childhood development facilities more than doubled from 39% in 2002 to 87% in 2014. 

• In 2014, 84% of adults in South Africa were literate, up from 73% in 2002. South Africa compares favourably to other African and Middle Eastern countries in international comparisons.

• Combating the unacceptably high levels of crime remains a priority. Between 2002 and 2013, the number of serious crimes reported was reduced from over 5 thousand to 3.5 thousand per 100 000 population.

• Since first assessed in 2006, South Africa persistently performed well in terms of the public having access to budget information and provided with the opportunity to participate in budget process at national level. In 2012 we were rated second out of one hundred countries.

• Tax revenue has grown significantly due to economic growth, a broader tax base and more effective revenue collection. The income tax register has been expanded from 3 million taxpayers in 1996 to almost 20 million in 2014. 

• Almost 15 million international travellers arrived in South Africa in 2013, double the number in 2005. Tourism generated 4.6% of total employment in 2012, up from 4% in 2005 and contributed R93 billion to GDP in 2012, more than double the R45 billion in 2005.

The indicators are, as their name suggests, numerical indications of changes in highly complex and interrelated systems. They should be interpreted jointly, beyond the number and within the broader, socio-economic and historical context.

The two fundamental objectives of eradicating poverty and reducing inequality have been the central focus of government policy since 1994. The Twenty Year Review provided a comprehensive overview and analysis of South Africa’s progress since 1994. The Twenty Year Review has shown that South Africa has emerged from its deeply divided and violent past into a robust and vibrant democracy that has made major strides in improving the lives of its citizens.

Poverty has declined since 1994, but society remains highly unequal. In addition, while there has been progress in addressing the legacy of apartheid, inequality is still largely defined along racial lines. Going forward, a number of challenges will have to be addressed to eradicate poverty and reduce inequality. These include employment creation, improving labour relations, overcoming economic infrastructure constraints, improving the capability of the state and the quality of service delivery, and overcoming the challenges related to basic education, public health services, crime and corruption. 

The Development Indicators are a collation of data extracted from many sources, including official statistics, government databases and research institutions. I would like to thank all the institutions and agencies that provided data for their support.

It is my wish that a broad range of institutions and individuals should engage with this publication and should be inspired to work together to achieve our long and medium-term goals as articulated in the National Development Plan (NDP) Vision 2030 and the Medium Term Strategic Framework (MTSF).