#Sona2019: High unemployment a main economic development concern

CAPE TOWN – President Cyril Ramaphosa is expected to deliver his second State of the Nation Address as pressure mounts on him to take action and fight corruption, find solutions to economic development issues and clean up the state.

Professor Alan Hirsch, Director, on the UCT Poverty and Inequality Planning Group focusing on economic development issues, said the main issue that Ramaphosa needs to address is the high unemployment rate.

In an email response to Business Report, Hirsh said: "The biggest problems are high unemployment and the rolling back of earlier gains made in poverty reduction. In the short term, the key objective must be to get economic growth on track." 

"Currently, the main reasons for slow growth is a lack of investment by the private sector and the public sector. The government needs to reprioritise to fund public investment; it also needs to find ways to close the great holes of debt which have opened up in several state-owned enterprises. This requires bold action. Taking such action will free up government funds for investment and will encourage private investment too but the government still needs to do more to rebuild confidence; it must engage frankly and openly with local and foreign investors and respond concretely and constructively to the outcomes of these conversations. It would be good to see full and frank reports on progress since the Presidential Investment Summit and the Presidential Jobs Summit. It must also show real progress in punishing the corrupt, without fear or favour."

Hirsch said in order for the government to tackle the issue of the high rate of unemployment, it should develop partnerships with businesses. 

"In the longer term, government at national and regional levels need to develop partnerships with business (industry, services or agriculture) which have investment plans with a potential to grow significantly. The outcome of these partnerships would be for various elements of the state to provide direct and indirect support," said Hirsh.

"Direct support would be clearing red-tape, providing suitable land, etc. Indirect measures would involve insuring the availability of trained labour, efficient infrastructure and infrastructure services such as water and power at suitable and predictable prices, as well as encouraging education and research institutions to align their work program with the growing industries but the underlying condition for employment growth in South Africa is better human capital and this requires better education and health services for the poor," said Hirsh.


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