The SONAs of dead and underfunded ideas

In his first State of the Nation Address (SONA) as President, the phrase Nelson Mandela used most often was “Reconstruction and Development Programme” (RDP). It was the big dream sold to the enormous queues of hopeful first-time voters. A dream of habitable dwellings and child-friendly outdoor spaces, a dream of decent work and quality education, a dream of functioning clinics, black entrepreneurs and economic emancipation.
How far we are from that dream today.

In the SONA on 13 February 2020, “social compact” was the most oft-repeated term. Combined with the excessive austerity that overshadowed the speech, it suggests that President Cyril Ramaphosa needs to get bigger dreams. His social compacts are arrived at between business, labour, government and community, but exclude the unemployed. This raises questions about the extent to which he regards people without work as truly part of society; as people with anything useful to say about their own fates and the myriad interventions targeting them.

Phindile Nogemane, a 39-year-old volunteer at the Gugulethu branch of the Cape Town-based unemployed movement Organising for Work (OfW), points out that “the SONA is just empty promises”. He says he has the impression that “national government isn’t on the ground to monitor the projects they put money into, checking if the job is done and corruption is eliminated”.

The employment centre-piece of the president’s speech was the six priority actions of the Presidential Youth Employment Intervention (PYEI). Three of them – pathways into work, skills development and scaling learnerships – are helpful, but it is unclear whether they would make any contribution towards increasing the number of jobs in the country.

While the percentage of those in work among the working-age remains static, these three actions will simply substitute older workers for younger ones. Under 35s suffer 42% unemployment while over 35s suffer “just” 19%. So, while depressing that there is an almost complete absence of support for Nogemane and other over 35s, those in power presumably feel justified focusing almost exclusively on the youth. There are simply not enough jobs to go around.

Two of the other three priority actions are currently lacking any detail. One is a future Presidential Youth Service which will, he said, provide opportunities for the youth to earn an income while contributing to nation-building. The second is top-slicing of the budget by 1%, presumably to fund the other five actions. It remains for the Finance Minister to clarify exactly what will be top-sliced and when, in his Medium Term Budget Statement in October 2020.

Informal work

Support for youth entrepreneurship is the remaining priority action. The president said that 100,000 entrepreneurs will be assisted over three years with “business skills training, funding and market facilitation”. He did not mention informal work once in his entire speech. Entrepreneurs wanting support are required to produce a business plan and to go through statutory incorporation. This is especially the case for obtaining credit.

If you want any share of that promised assistance as a township-based street vendor, roadside car washer, hairdresser in a crate salon, pavement clothing reseller, or home-based caterer, you must get a bank account and incorporate your enterprise. Members of OfW who are constantly trying out these activities, will tell you that ensuring they can make a basic living profit is their number one concern. The monthly bank charges and filling out of returns required for an incorporated business are often too much to bear. Hence, those most in need of financial assistance from the government will remain excluded from it.

We are missing at least 10-million jobs in South Africa. This is based on a comparison to the percentage of people aged 15 to 64 in work globally. In South Africa, informal employment makes up just 30%, or approximately 5-million jobs while around the world, the figure is over 60%. This suggests that a further 5-million people could become informally employed in South Africa if there was significant support for it, or at the very least, if the obstacles were less severe. This is not to conceal that the majority of informal work around the world is just survivalist. However, even such grinding amelioration of their circumstances is denied to many of the country’s unemployed.

The barriers to success for formal and informal entrepreneurs in the poorer parts of the country are huge. They range from regressive regulation, use-restrictions and lack of credit through to the geographical and social distance from wealthier consumers. Without economic stimulus in high-unemployment areas, local demand and local entrepreneurship will remain constrained.

The obvious remedy would be to focus infrastructure renewal and rollout in these areas to stimulate demand. There is an urgent need to build spaces for office work, trading, training and manufacturing. The informal and decaying houses, as well as sanitation, public spaces, roads, pavements and mass transit could all benefit from an overhaul.

Sadly, the R700-billion mentioned in the speech to be spent by the public and private sector over 10 years is woefully inadequate to attend to the vast majority of such infrastructure needs. There is good reason for Nogemane’s observation that “most government projects we hear about on TV or radio, we don't know where they are”. These projects are not changing the physical landscape and infrastructure around him in Gugulethu, nor the other areas where the majority of the unemployed live.

Finally, the president’s speech and the debate that followed made no mention of the most frequently complained about and discouraging aspects of job-seeking: the wasteful travel, document copying, certification and clothing purchase for applications and interviews. Given the scarcity of jobs and the short-term nature of so many entry-level positions, the unemployed are compelled by employers (public and private), to perform these expensive tasks in endless repetition without much chance of success.

Of everything that the government is attempting to do, outlawing the compulsory provision of physical documents and their certification has got to be the easiest win. It would alleviate some pressure on busy police stations by reducing document certification and it would remove wasteful expenditure from those who can least afford it.

These few examples highlight that the president in his speech, and Parliament in its response to it, are far removed from the realities of the unemployed and insufficiently informed about some of the remedies needed. They could start to address this disconnect by welcoming formations of the unemployed such as OfW, the Botshabelo Unemployed Movement and the Unemployed People’s Movement at the president’s monthly Jobs Summit meetings. After all, these meetings are designed to monitor the progress of summit commitments on, and remove blockages to, job creation. MC

Ayal Belling is a founder of the unemployed movement, Organising for Work. He previously worked in finance and tech in London and Cape Town. He can be contacted at [email protected]