If President Jacob Zuma and his Cabinet could persuade and assist local- and provincial governments to spend their annual budgets fully and properly, it would go a long way toward meeting the government’s promises and targets for job creation.

Delivering the ANC national executive committee’s traditional annual January statement at the occasion of the party’s 99th birthday celebrations on 8 January at Polokwane, President Zuma indicated that the government would rely more on the capacity of the state and that of state-owned enterprises and development finance institutions to fight unemployment.

His emphasis on the role of the state echoed Minister of Economic Development Ebrahim Patel’s New Economic Growth Path (NEGP) released late last year.

The plan is expected to be rolled out this year, as Cabinet tries to put its stamp on the country’s economic direction and particularly come to grips with the vexing problems of unemployment and so-called jobless growth of the last decade and a half.

Underspend costs jobs

In the interim, however, it is estimated that some 800 000 potential job opportunities did not materialise during the previous financial year due to the failure of local- and provincial government to spend their allocated budgets.

In December last year, the Department of Public Works, in reply to a parliamentary question by the Democratic Alliance, revealed that 226 231 job opportunities were lost due to the failure by district- and local municipalities to spend money made available under the Expanded Public Works Programme (EPWP).

At provincial level, the non-creation of potential jobs counted up to nearly 540 000 due to underspending under this heading, which was introduced by national government in 2004.

The intention of the programme is to create short- and medium-term employment and in-service training opportunities.

Trade unions have often criticised the programme because the jobs created under the scheme are not of a permanent nature and are said to produce only minimum remuneration.

According to the reply by the Public Works department:

• Local municipalities in the Limpopo province spent only 27% of their budgets under the EPWP, leading to the loss of 13 601 potential job opportunities;

• Underspending in the North West was responsible for the loss of 11 456 potential job opportunities; and

• In Mpumalanga, the loss of potential job opportunities due to underspending at local government level numbered in the region of 10 360.

Underspending of allocated EPWP funds at district municipalities and metropolitan councils further led to a considerable loss in potential job opportunities.
This included:

• The loss of 8 323 opportunities at the City of Cape Town;

• eThekwini metropolitan council (Durban) saw the loss of 9 057 job opportunities;

• The Joburg metropolitan council’s failure to spend its full allocated budget under the programme cost 14 749 job opportunities; and

• At the Nelson Mandela Bay metropolitan Council, in the economically struggling Eastern Cape Province, no less than 16 749 job opportunities were not utilised.

Some concerns

Critics of the NEGP have expressed concern about what they believe is an over-reliance on the capacity of the state. They argue that as the state and state-owned enterprises are largely in managerial disarray, they may not be well-placed to drive the plan.

The NEGP aims at reducing unemployment to 15% (according to Statistics South Africa, it is presently at 25.3%) over a period of 10 years by, among other things, using the state as a major employer, which is a departure from the notion that the state should simply provide an enabling environment for job creation.

While he did not give much detail on the debate on the speech – and some of it may come to the fore in his State of the Nation speech at the opening of parliament – President Zuma, in his Polokwane statement, said unemployment would be addressed through practical measures and that 2011 “will be the year of job creation through meaningful economic transformation.”

Public sector programmes

The president added that the government would explore public-sector employment in health, education, policing, social services and community and public works programmes to improve service delivery and the quality of life.

“All departments will be required to put the appropriate programmes in place and establish the right environment for the creation of many decent and sustainable jobs in every way possible,” President Zuma said, adding that structural challenges in the economy continued to sustain South Africa’s unequal society with its crisis of unemployment.

“It is only by enabling our people to free themselves from poverty, by providing decent and sustainable jobs and opportunities to become entrepreneurs, that we will really bring about a better life for all,” he said.

The president added that the government would ensure public procurement was used to support domestic manufacturing, which should lead to more jobs being created in that sector.

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