Unemployment is a defining characteristic of the South African economy. Today, more than 7million people are without a job and more than 3 million people have given up searching for one. More strikingly, the number of people employed today is the same number of people employed in 2012, a little more that 14 million. All economies have periods of low growth and all economies suffer the effect of global shocks, but only South Africa seems incapable of recovering.

What is to be done?

The literature on unemployment in South Africa is vast and the number of policies implemented to deal with it are too many to count. The dramatically disappointing results suggest modesty in claiming to have the right recipe to deal with the problem. Nevertheless, there are three basic principles that should be the foundation of any policy.

1. It is all about growth

The only certain way to deal with the South African unemployment problem is for the economy to grow fast. Unemployment is a symptom of the country’s inability to grow and any policy should be focused only on increasing the growth potential of the economy. Nothing else will do. The first priority is to solve the infrastructure crisis. Stable and efficient provision of electricity and water, good roads, port networks and chips, and reliable IT infrastructure are the key to sustainable economic growth. It is also essential for policies to increase the market size and the potential gains from investing in South Africa, via export promotion, integration in the global value chains, integration in African markets and technological transfers to increase local productivity.

2. Social insurance as an instrument for growth

Unemployment and poverty are interrelated and therefore the growing need for social security grants for poverty-stricken South Africans. South Africa has built an impressive social security net that provides basic income to more than 16 million people. The onset of COVID-19 saw the government increasing this with the R350 unemployment grant. These instruments of social insurance are all targeted at supporting consumption but are fiscally unsustainable if there is not a contemporaneous rapid growth of the economy (and fiscal revenues). Any remedial intervention should be linked with growth objectives of increasing labour force skills and the productivity of the economy. Subsidies, grants, and wage subsidies should be linked to training and work experience or to support business activities. Moreover, redistribution policies should aim at increasing the marketable assets of the poorest in the society, which will form the wealth base of social and economic uplifting.

3. Educate, educate, educate

Education is the only sure way to match growth with good jobs and the only way to sustain growth in the long run. South Africa invests a lot of resources into education but the productivity of this investment is very poor. The quality of education for the majority of South Africans is among the worst in the world and it reflects poorly on the politics of the country that this is not a national shame to be corrected with urgency and any possible instrument. Basic education is the foundation of a society, and any child that does not receive the best possible education is a waste of talent and endless opportunities. Quality of education for all should be the only revolutionary slogan of any government.

This is what you are saying is new?

No, we have known these principles for a long time. What is lacking is the political will and the implementation capacity to do what is necessary to transform a plan into a successful policy. But the potential of the country is immense and what is necessary is just a spark of pragmatism, optimism and a bit of luck.