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JOB CREATION AND INFRASTRUCTURE IN SOUTH AFRICA

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... EMPLOYMENT PROJECT NAME LM BUDGET YOUTH WOMEN DISABLED TOTAL Backdoor taxi & bus route P2 MLM R2,500,000 24 17 1 32 Zwelisha B Water Supply MLM R3 ... – PowerPoint PPT presentation

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Title: JOB CREATION AND INFRASTRUCTURE IN SOUTH AFRICA


1
JOB CREATION AND INFRASTRUCTURE IN SOUTH AFRICA
March 2011 CLGF Conference (Cardiff) SALGA Econo
mic Development And Planning Mayur Maganlal
2
Contents
  • Introduction
  • Unemployment Challenges
  • Role of Capital Investment in Infrastructure
  • Expanded Public Works Programme
  • The case of Ehlanzeni (Limpopo Province)

3
Introduction
  • Traditional LED is focused on creating the
    enabling business environment, given the vast
    poverty and unemployment challenges but current
    administration is taking a more proactive /
    focused / interventionist stance
  • Job creation, public investment and rural
    development emerged as key points in finance
    minister Pravin Gordhans budget 2011 speech
  • The SA government pursues its New Growth Path
    (NGP) which includes a focus on infrastructure
    spend
  • Energy, transport (road construction and
    maintenance), communications, water, education
    and housing
  • Industrial Policy Action Plan (IPAP2) to support
    key sectors and more focused use of government
    procurement to create jobs
  • National Programmes such as EPWP affect all
    spheres of Government to invest in infrastructure
    projects and job creates
  • Labour Intensive Construction methods
  • MIG Funds
  • For new projects and maintenance
  • Incentives based on performance
  • For LG, capital investment is often an easier
    than doing LED

4
The jobs challenge
Unemployment challenge
  • Labour absorption (Percentage of people aged
    15-64 who are employed) (ILO)
  • South Africa 41,3
  • Egypt 43,2
  • India 55,6
  • Argentina 56,5
  • South Korea 58,1
  • Malaysia 60,5
  • Brazil 63,9
  • China 71,0

4
Confidential
5
Countercyclical Fiscal Monetary Policy
GLOBAL ECONOMIC CRISIS THE NATIONAL RESPONSE
Stimulus Package (NEDLAC/Presidency)
Investment in Infrastructure
Global Coordination
Macroeconomic Policy
Industrial Trade Policy
Employment Measures
Social Measures
  • Transport (road, rail, public transport, port
    operations)
  • Water, dams sanitation
  • Housing
  • ICT
  • Electricity
  • Health education
  • Counter-cyclical (expansionary) fiscal policy
  • Reducing real interest rates
  • Competitive exchange rate
  • Tax relief to low-income households and companies
    in distress
  • Rescue package for vulnerable sectors (clothing,
    textile, autos, mining, capital equipment,
    retail, housing construction, private services)
  • Support for SMMEs in crisis
  • Green industries
  • Local procurement
  • Trade tightening import controls.
  • National Jobs Initiative (R10 bn)
  • Support where gt 50 retrenchments
  • Expand Public Service (education, health, social
    work, CJS)
  • EPWP II 2 million full-time equivalent jobs
  • Training skills development, incl. training
    the retrenched
  • Improve global Economic coordimation
  • Prudent regulation of SA capital markets
  • G20 as platform to enhance stability in fin
    mkts
  • Use IFIs to finance counter-cyclical policies in
    developing countries.
  • Industry-level social plans
  • Improved UIF benefits
  • Emergency Food Relief
  • Support community food production.
  • Access to FBS
  • Social Grants (CSG to age 18, pension for men
    from age 60)
  • Promotion of Cooperatives

R 787 bn 2010 - 12
NO Reference to either the local or provincial
spheres
6
GLOBAL ECONOMIC CRISIS THE NATIONAL RESPONSE
Overarching Priority To implement
counter-cyclical policies that are customised for
the locality, through a dedicated local stimulus
package, to mitigate the negative impacts, and
to position the local economy for recovery
Investment in Infrastructure
Industrial Policy
Employment Measures
Social Measures
  • Support to communities and households in distress
    through partnering with NGOs the private sector
    (CSI)
  • EPWP,
  • Municipal shovel ready Infrastructure
    Projects
  • 2010 projects
  • Advice to corporates and SMMEs support to
    access rescue packages concessionary credit,
    Local procurement
  • Employment programmes to absorb retrenched
    workers, leveraging on National Jobs Initiative
  • Retraining
  • Surveillance of local economy
  • Partnership civil society private sector
  • Ongoing Communication

7
New Growth Path Drivers
  • Address cost drivers and inflationary pressures
    across the economy
  • Active industrial policy based on increasing
    competitiveness and targeting sectors that can
    create employment directly and indirectly
  • Comprehensive rural development
  • Stronger competition policy
  • Stepping up education and skills development
  • Enterprise development
  • Reform of Broad-Based BEE
  • Reform labour policies to support productivity
    and improve protection for vulnerable workers
  • Technology policies geared to improving
    innovation in ways that support employment
    creation and small- and micro-enterprise
  • Developmental trade policies with a strong
    orientation to new growth centres
  • Investment to support African development
  • SoNA
  • R9 billion in the Jobs Fund over the next 3 years
    public employment schemes plus subsidies to
    private employers
  • R10 bn from the IDC in next 5 years for
    job-creating projects
  • R20 billion in investment subsidies
  • Comprehensive support for SMEs

7
8
State Owned Entities - ESKOM
  • Major plants located near coal reserves, with
    localised employment effects
  • Should create 2000 new jobs in the coming year
  • Main employment impact from maintaining
    electricity supply across the country
  • Also create jobs in all provinces through
  • Procurement from build programme
  • Electrification programme
  • Municipal electricity maintenance

9
Expanded public works programme (epwp)
  • Nation-wide programme which will draw
    significant numbers of the unemployed into
    productive work, so that workers gain skills
    while they work, and increase their capacity to
    earn an income

10
Epwp objective
  • To utilise public sector budgets to alleviate
    unemployment

11
What is an epwp project
  • Deliberate attempt by the public sector body to
    use expenditure on goods and services to create
    work opportunities coupled with training for the
    unemployed
  • Projects usually employing workers on a temporary
    basis (either by government, by contractors, or
    by other non-governmental organisations), under
    code of good practice for SPWP or learnership
    employment conditions

12
Areas of opportunities for epwp
  • Increasing the labour intensity of
    government-funded infrastructure projects
  • Creating work opportunities in public
    environmental programmes (eg Working for Water)
  • Creating work opportunities in public social
    programmes (eg community health workers)
  • Utilising general government expenditure on goods
    and services to provide the work experience
    component of small enterprise learnership /
    incubation programmes

13
Background to EPWP Phase 1
  • The first phase of the Expanded Public Works
    Programme achieved its 1 million work
    opportunities targets a year ahead of schedule
  • The second phase of the EPWP to scale up further
    to contribute significantly to halving
    unemployment by 2014
  • EPWP was projected to grow to three times it
    current size within the next 5 years
  • EPWP 2 implementation to start on 1 April 2009

14
Key Enhancements EPWP 2
  • EPWP Employment Creation Targets
  • EPWP Wage Incentive
  • Sector Programmes
  • Introduction of the Non-State Sector
  • (community)
  • Increasing Technical Capacity and Support
  • Funding

15
Key elements of phase 2
  • Overall Phase 2 targets will be distributed
    across all spheres of government over a five year
    period based on projects/programmes
  • The EPWP incentive is based on paying all public
    bodies that create work above a minimum threshold
    for the EPWP target group an incentive of R50 per
    day for every day of work created

16
Phase 2 targets in Full Time Equivalents broken
down per sphere of government
17
Infrastructure Sector Project based employment
in capital works Potential for long term
employment programmes in maintenance works
Infrastructure sector
18
Objectives for infrastructure sector
  • Both the programme and budgets of the EPWP have
    multiple objectives
  • Eradicate backlogs and create employment
  • Provide social services and create employment
  • Taken existing programmes, and institutional
    setups and required additional job creation
  • Municipal official who previously build roads,
    now has to still build roads, but must also
    create jobs
  • Lot of energy focused on changing how existing
    programmes are implemented, not establishing new
    institutions with the purpose of doing things
    more labour-intensively

19
Epwp report for ehlanzeni district municipality
20
Ehlanzeni district status report
  • Summary of EPWP performance
  • - Number of projects 25
  • - Expenditure R78,953,542
  • - Planned jobs 800
  • - Actual Jobs 976
  • Youth 388
  • Women 581
  • Disabled 7
  • - Training
  • Accredited 2105 person/days
  • Non-accredited 1405 person/days

21
Ehlanzeni district status report (08-09)
22
Ehlanzeni district status report (08-09)
23
Ehlanzeni district challenges
  • Have not reached our full potential in
    implementing the EPWP program
  • No unit dedicated to EPWP activities
  • Planning
  • Infrastructure sector active, however economic,
    social environmental/culture sectors not
    reporting on activities
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