S.Africa to spend $21 bln to tackle unemployment

South Africa will spend close to 150 billion rand ($21 billion) over three years to create jobs and tackle an unemployment rate of around 25 percent.

S.Africa to spend $21 bln to tackle unemployment

South Africa will spend close to 150 billion rand ($21 billion) over three years to create jobs and tackle an unemployment rate of around 25 percent.

About half that will go on an expanded public works programme, which should create 900,000 part-time jobs in the next 12 months - part of plans to create 5 million jobs in Africa's biggest economy over the next decade.

Earlier this month, President Jacob Zuma set out plans for a 9 billion rand Jobs Fund and 20 billion rand in tax breaks for the employment-intensive manufacturing sector.

In the budget, Finance Minister Pravin Gordhan also announced a new 5 billion rand youth job subsidy to help school-leavers struggling to find work. The subsidy, phased in over three years, would help the businesses that employ them.

"We cannot view the fact that 42 percent of young people between the ages of 18 and 29 are unemployed as merely a statistic," he said.

The subsidy could create 178,000 jobs over the three years, with overall employment in South Africa seen growing by an average of 1.8 percent over the same period.

South Africa shed close to 1 million jobs during a 2009 recession and is trying to boost its economic growth from 3-4 percent to closer to 6-7 percent to bring more people into employment.

Official statistics showed employment rose by 157,000 across the formal and informal sectors in the final three months of 2010, but prospects remain dismal.

Out of nearly 50 million people, only 13.1 million are employed, with only 40 percent of people of working age in a job. By contrast, that proportion is 65 percent in Brazil, 71 percent in China and 55 percent in India.

Critics say rigid labour laws lie at the heart of the problem and the Treasury hinted at the need for change.

"Domestic unemployment has its own stubborn characteristics, rooted in the structure and institutions of the economy, that require attention. Removing these barriers is critical to achieving more labour-absorbing, inclusive growth," it said.

Reuters

Last Mod: 23 Şubat 2011, 14:18
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