Voices

Floyd Shivambu: EFF job plan will rescue SA from a crisis

2019-02-05 00:01

One of the biggest failures of the post-1994 government has been the inability to create jobs, in particular for able, willing and young people.

South Africa has more than 22.6 million people who can work, of which 16.4 million are employed and 6.2 million are unemployed.

These figures do not include the more than 2 million people who looked for work, could not find work and now have given up looking for work.

In expanded definition – the real definition – close to 9 million South Africans are jobless.

All aspects and sectors of the EFF’s election manifesto include a jobs dividend.

Historically – and now – the most effective way to create jobs is to build sustainable industries to produce things that people consume on a daily basis and involve people in all stages of production.

South Africa’s semi-colonial character has positioned the country as an importer of almost all finished goods, products and services and an exporter of natural and semi-processed products.

The massive and almost complete importation of finished goods and products is man-made.

The EFF carries the political and ideological will to change that fundamentally.

The post-1994 government’s industrial policy failed drastically because it did not pursue inward industrialisation, needed to build sustainable labour and absorptive factories for the production of daily consumables.

This failure was made worse by the movement of investors’ money.

There was not sufficient regulation, resulting in a large component of foreign capital coming in as speculative capital, which did not have the much-needed jobs dividend.

In the past 25 years the ANC-led government has failed by establishing only five special economic zones (SEZs) that are functional.

The direct state investment in these zones is around R10 billion, insignificant for a country that spends more than R150 billion on social assistance annually.

Fewer than 14 000 jobs have been created by these SEZs which, if massively expanded, protected and supported, could end the socioeconomic crisis of joblessness.

As an interim measure of poverty alleviation, social grants are a progressive intervention, but they cannot and should not be a permanent solution to the country’s developmental, poverty and inequality challenges.

Social assistance programmes must be accompanied by an equally aggressive labour-absorptive industrialisation.

First, to create sustainable jobs the EFF industrial policy will focus on inward industrialisation with export capacity.

The policy will aim to depopulate high-density populated cities by creating labour-absorptive industries in parts of the country that have not realised any form of economic development.

To achieve this, the EFF government will declare zero company taxes in multiple SEZs in various regions, starting with 35 areas and including the whole of the Northern Cape.

These multiple SEZs will gain special benefits, such as tax incentives and a factory-building allowances.

The non-negotiable and legislated basis of each company gaining access to these SEZ benefits will be the employment of a minimum of 2 000 workers by each company in each investment area.

As the EFF we studied areas that have immense potential, either informed by historical infrastructure or markets and resources, to identify viable SEZs.

Any investor who can commit to a minimum of 2 000 sustainable jobs, pay employees a minimum wage and employee benefits will have access to these multiple SEZs zones’ benefits.

The EFF government will spend a minimum of R100 billion annually in pursuit of massive inward industrialisation which will not be the same as those in many post-colonial societies, which substituted imports with inferior domestic products.

The inward industrialisation the EFF will pursue will have maximum quality controls with export capacity.

The underpinning belief of the EFF’s industrialisation policy is the creation of jobs. Any investment must clearly demonstrate commitment to accessing jobs in the SEZs.

These tax-free multiple economic zones have the potential to generate a minimum of 400 000 jobs by 2024 if each zone can attract an average of between five to 10 companies which will commit to 2 000 sustainable jobs for each investment area.

The industrialists in all these sectors should primarily be South Africans whom the state should incubate, guide and finance, with an appreciation that not all industries will be profitable immediately.

Developmental finance institutions must be positioned to finance and support no fewer than 30 000 initiatives annually.

A 60% success rate in this regard will create many jobs.

These industries will not be producing daily consumables only, but will leverage on the domestic beneficiation of natural resources, with a firm legislative framework that ensures a minimum of 50% of all natural resources are added value domestically.

Massive and decisive industrialisation will develop a financial and professional services sector and boost other household industries because many people will have work and more people will need consumables.

Second, the EFF government will use state procurement decisively in all spheres of government – including in state-owned entities – estimated at around R1 trillion yearly to enable industrialisation and localisation.

The EFF government will amend the Public Finance Management Act and the Municipal Finance Management Act to procure 80% of all goods and products from local producers, of which half should be owned and controlled by women and the youth.

The EFF government will ensure that products – such as glasses, cups, plates, spoons, tiles, energy-efficient building materials, furniture, washing products, electronics and textiles – that people use on a daily basis must be produced locally through labour-absorptive means.

The EFF government will leverage the economies of scale to buy commonly used products, such as motors, linen and garments for hospitals, clinics and correctional services’ facilities, food and other consumables, to expand on value for money, using the government budget to maximise the effect on industrialisation and job creation.

At the core of the EFF industrial policy, underpinned by employment dividends, is the call for quality work and a living wage.

There are South Africans who have work but continue to live in poverty because they are paid low wages.

They are as good as unemployed. Any industrial policy that intends to create jobs but does not emphasise quality of work and a living wage will fail to address South Africa’s problems of unemployment, inequality and poverty.

Historically – and now – the most effective way to create jobs is to build sustainable industries to produce things that people consume on a daily basis and involve people in all stages of production.

This is why the EFF in Parliament objected to a R40 an hour national minimum wage across all sectors and strongly called for sectoral determinations.

For far too long the value of wages has continued to decline unabated, while companies have continued to make millions in profits for the shareholders.

The EFF government will marry closely the need to create jobs through inward industrialisation with quality export capacity, using state procurement capacity to fast-track the process of industrialisation.

At the same time the quality of work and a living wage will be key priorities.

The EFF’s plan on jobs is a cogent and decisive departure from what the post-1994 government has been doing.

South Africans should give the visionary EFF political power. The people will gain economic power as a result.

Shivambu is EFF deputy president and parliamentary chief whip


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July 14 2019