Government, business, and labour have signed an 80-page agreement following the Jobs Summit on Thursday that outlined objectives to possibly create 275 000 jobs a year.
The objectives include the need for big business to actively encourage consumer support for local products, energising the export sector, boosting fruit, grain and livestock value chains, as well as much-needed financing, resource and related assistance for small and medium enterprises.
Heard it all before?
Of course you have but for the time being there’s no denying that something needs to be done about the 9.6 million South Africans that can’t find work.
Brimming with optimism after the summit’s resolutions were signed, President Cyril Ramaphosa was confident that it was possible to create and not cull jobs.
And yet government spending is on the rack as far as ratings agency Moody’s is concerned.
It has indicated that the public sector wage bill has ballooned beyond fiscal capability and that Treasury will have to trim away at what it costs to keep the country’s administration machinery running.
However, in a classic case of labour dictating to government – what’s new? – Ramaphosa’s negotiators guaranteed unionists that there would not be any job losses.
In the meantime Finance minister Nhlanhla Nene is trying to balance a very difficult budget in the run-up to his medium-term speech later this month.
Should government spending not be reined in, Moody’s said it might have no alternative but to join its peers, S&P Global and Fitch, in junking the country’s economy.
Losing our last stand as an investment-grade country, some say, will be a case of three strikes and you’re out!
Indeed, about $5bn will immediately leave the local bond market, foreign direct investment (FDI) South Africa desperately has to hang on to if it wants any hope of salvaging an economy remotely capable of creating jobs.
However, pleasing both Moody’s and the masses, reeling from fuel price hikes and resulting living cost increases, is not going to be easy.
Caught between a population facing penury and a country crying out for FDI, Ramaphosa must be having sleepless nights.
Heavy lies the head that wears the crown.
