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Creating regional hubs one answer for jobs

Author: Dr Thabile Sokupa

A different strategy is needed in South Africa if we are to address rising unemployment.

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(Published - 10 June 2019)

On Tuesday May 14, Stats SA released its Quarterly Labour Force Survey, for the first quarter of 2019. The report states that official unemployment rate had risen to a 15-year high of 27.6%, expanding to 38% if we include those that have stopped looking for employment. This report did not garner much attention, maybe, partly because the country was occupied with the national and provincial election outcomes, of the incoming sixth parliament, or maybe we have become numb to the rate of unemployment as a society.

However, it should be noted that the SA government did release a statement, through its government spokesperson, Phumla Williams, stating that “the high rate of unemployment is a serious concern to government; however there are a number of interventions that are being implemented to revive and stimulate economic growth. Unemployment requires all sectors of society to work together to address this challenge. The Youth Employment Service, Jobs Summit, Economic Stimulus recovery plan and Investment Conference are part of the broad short- and long-term plan to reignite the economy”.

The Quarterly Survey confirmed what many of us have been aware of, that the social structural makeup of unemployment, affects in the main, young people from the ages of 18-34 years, as a result, youth unemployment rate stood at 54.7% in Q4. Equally so, demographics and gender still play a huge role in unemployment, with Black Africans at (31.1%) and Coloureds at (22.2%), as compared to unemployment of Indians/Asians (12.4%), or Whites (6.6%). Females constitute (29.3%) of the unemployed, as compared to males (26.1%).

A new growth path strategy and policy would need to be reimagined if we are to even scratch the surface of unemployment, by the incoming sixth administration led by President Cyril Ramaphosa, through bolstering of the National Development Plan (NDP) 2030, with volume two. One of that strategy would need to be on preferential developmental grant, targeting the most needy and vulnerable provinces, in particular rural-based provinces. It is these provinces that have consistently recorded the highest unemployment rate over the last 15 years, and having an increase in unemployment year-on-year.

For example, the Quarterly Survey (includes those that have stopped looking for employment), states that unemployment affects the following provinces the most: Eastern Cape (48.3%), North West (44.4%), Limpopo (43.1%) and Mpumalanga (43.0%).

It is therefore no coincidence that the rate of outward interprovincial migration happens in these provinces as well, partly because its citizens move to other provinces in search for better opportunities. Accordingly, Kok et al, states that, “If the origin and destination are in the same country (SA), thus the moves constitute internal migration” (2003: 11). In the main internal migration in SA is influenced by push and pull factors, of socioeconomic opportunities, such as employment and education opportunities.

A case in point, in July 2018 Statistics SA released its mid- year population estimations. These estimates are an update from the Census 2011 results, that were released on October 30 2012. According to the 2018 statistics, mid-year population estimations found that since 2006, over 1.5 million people left the Eastern Cape to other province business hubs, with Johannesburg and Cape Town being the destination of choice (Stats SA, 2018).

As a result, Eastern Cape recorded the biggest interprovincial outward mobility of all nine provinces in SA since 2006. Hence Eastern Cape SocioEconomic Consultative Council (ECSECC) states that the obvious reason for such high numbers of internal migration relates to infrastructure and better employment opportunities (ECSSEC, 2012).

Young, skilled and unemployed people are left with no other choice than to seek better opportunities elsewhere, resulting in the brain drain of the much- needed skills.

Perhaps a reconsideration of the budget revenue allocation needs to be looked at, if we are to address the high rate of unemployment amongst young people and women in general, and, Blacks (Africans and Coloureds) in particular.

This could start with reconfiguring district municipalities to be regional hubs or quasi metropolitans and dissolving the local government sphere.

A case in point is that Chris Hani District Municipality’s annual report for 2016- 2017recorded that Sakhisizwe Local Municipality has been experiencing depopulation, from a population of 66,600 in 2005, to just 64,521 in 2016.

The population growth averaged 0.8% per annum for Chris Hani, as compared to the year-on-year average national growth rate of (1.51%). It is also Chris Hani that saw an outward mobility of 8.5% from 2006-2011 of its population, to other economic hubs of South Africa (Census, 2011), this was the highest recorded outward mobility of all districts in the Eastern Cape.

What this indicates therefore, is that smaller municipalities will experience depopulation in the long run, and will therefore forever be dependent on national and provisional grants for their survival.

Perhaps, the most economical viable strategy is the amalgamation and creation of regional hubs, where economies of scale could be realised.

Of course this could be futile if government does not introduce tax rebates needed to attract the right skilled personnel and investment, for companies willing to invest.

This article appeared in the 21 May 2019 edition of the Daily Dispatch. Dr Thabile Sokupa is Head of Projects, Office of the DVC- Research and Innovation, University of the Western Cape.​​​

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