IN an announcement in April, President Cyril Ramaphosa promised, yet again, that there would be a “big jobs shake-up planned for South Africa”.
I needed to double-check the date of this pronouncement, as it could have been April Fool’s Day joke, but alas, it was not.
"The government is currently working on a programme to ensure that education and training programmes are directly linked to the jobs needed in South Africa,” said Ramaphosa. How, where and when, I ask?
The reality is that in just five years, South Africa has borrowed R1.8 trillion from investors. Also, in April 2021, it was announced that South Africa would get a $1 billion (R14.5bn at the time) loan from the New Development Bank (NDB) to bolster its coffers.
The NDB is a development finance institution established by Brazil, Russia, India, China, and South Africa as part of the BRICS grouping.
South Africa's gross loan debt has almost doubled over the past five financial years, ballooning from R2.5 trillion in the 2017-2018 financial year to R4.3trl in 2021-2022. During this period, the government borrowed an additional R1.8trl from domestic and international investors.
This emerged in Finance Minister Enoch Godongwana's response to a written parliamentary question from EFF MP Floyd Shivambu.
Godongwana also explained that the government's gross borrowing requirement was being financed through the issuance of domestic short- and long-term loans, foreign currency long-term loans as well as cash balances.
"Domestic short (Treasury bills) and long-term loans (bonds) are issued to market participants in the primary market (primary dealers and other financial institutions) through weekly auctions. The market participants buy these bonds on behalf of their clients, which include pension funds, foreign investors, insurers, monetary institutions, other financial institutions, and individuals, to name a few," said Godongwana.
Speaking at the Public Service Summit last month, Godongwana said the government expected its debt-servicing costs to be close to R500bn per annum by the next fiscal year.
To add to this, in January, the World Bank announced that it had approved South Africa's request for a $750 million (about R11.4bn) loan.
In July 2020, the International Monetary Fund (IMF) granted South Africa a $4.3bn loan to support job creation and provide protection for businesses impacted by the Covid-19 pandemic.
Adding to the gloomy picture, Godongwana also said the share of domestic bonds held by foreign investors had declined to a 10-year low of 28.2 percent by December 2021.
"Although these investors remain the largest category of domestic bondholders, risk aversion is rising due to global and domestic events. Other financial institutions and pension funds increased their holdings from 17.6 percent and 22.4 percent in 2020 to 20.1 percent and 23.5 percent in 2021, respectively.
"South African banks have been holding significantly more government debt because of weak demand for private credit and relatively high interest rates on government debt," he said.
Let's talk about jobs
"South Africa’s unemployment rate is likely to remain the highest in the world for the foreseeable future, as economic woes force the number of jobs created to be outpaced by the size of the labour market", Business Report wrote.
Data from Statistics South Africa (Stats SA) shows that 278 000 more people joined the ranks of the unemployed in the last three months of 2021, raising the jobless rate to yet another record high.
Stats SA said the country’s unemployment rate rose by 0.4 percentage points to reach the dreaded 35.3 percent in the fourth quarter, up from 34.9 percent the previous quarter.
This means that there were 7.9 million people of working age actively looking for work who had no jobs at the end of 2021, up from 7.6 million in the previous quarter. That number jumps to 12.5 million people when including discouraged work-seekers, BR reporter Siphelele Dludla reported.
The number of unemployed people in South Africa is likely more than the declared 12.5 million. Still, it is an ‘historic’ achievement for the country’s current dispensation. Not one any of us should be proud of.
Unemployment of the country’s youth remains a major problem, as the population aged 15 and 24 years recorded the highest unemployment rate of 66.5 percent in the fourth quarter.
What was the purpose of Ramaphosa addressing the nation, other than another PR exercise in false promises?
Under the current leadership, citizens of this country are faced with the daily reality of corruption, load shedding, job losses and the worst investment sentiment since I was born.
Despite the odds, there are plenty of capable people in South Africa. Not many of them appear to have found their way into President Ramaphosa’s Cabinet though, which is fraught with ongoing scandals and a glaring dereliction of duty that has seen this once proud nation, with a tax surplus, disappear over the fiscal edge into bankrupt oblivion and now beholden to external moneylenders.
We’ve been sold down the river.
There is a saying that you can tell a lot about a man by the company he keeps, and the company in the Cabinet speaks volumes about this Presidency.
Look at our roads and the gaping holes that have yet to be fixed and that deteriorate daily – much like the holes in our economy, which are rapidly reaching the stage of not being able to be plugged.
Or our once pristine water system has been decimated by the lack of maintenance, political will despite the knowledge of the importance that this life source has on our survival.
Why on earth does the Presidency retain a 'minister of ministers' such as Pravin Gordhan? Most State-Owned Enterprises are losing billions as we speak. His promises are as hollow as an Easter Egg, much like yours, President Ramaphosa.
BUSINESS REPORT ONLINE