President Cyril Ramaphosa this week published a letter from his office addressing the state of unemployment in South Africa.
In the communication, Ramaphosa announced that the government has launched the second phase of the presidential employment stimulus, which aims to create massive employment opportunities in the country within a short period of time.
The program is the president’s attempt to start rectifying South Africa’s record unemployment rate, which reached 34.4% in the last quarter (2Q21), or 44.4% if you consider the expanded definition that includes those who have given up looking for a job.
As Ramaphosa’s program is a step in the right direction to tackle unemployment, Xpatweb director Marisa Jacobs warns the president’s plan does not tackle the brain drain and professionals from Africa from South.
“There is no way to stop the valuable skills and skilled professionals who are currently leaving South Africa in droves,” she said.
“National employment campaigns and initiatives generally serve to create new opportunities for a younger workforce. While this prepares the next generation of skilled workers, it does not meet the current need for certain skills. No job creation for novices can fill the skills gap,” she said.
Instead, Jacobs said there was a need to focus much more on encouraging foreign direct investment (FDI) that would vastly boost the economy and help retain high-level skills.
She cited the example of Nigeria, which saw its official unemployment rate rise significantly in 2019, just before the pandemic struck.
In response, Nigeria called on foreign investors to view Nigeria as a prime investment location, saying at the time that the only way to reduce its high unemployment rate was to create an environment for foreigners to come and produce. locally.
The nation said FDI will help develop the agricultural value chain, which will lead to industrialization – which is another step towards improving unemployment.
“There have been many studies on the effects of FDI on unemployment figures in countries like the United States, Macedonia, Saudi Arabia and Malaysia.
“They all concluded that FDI can stimulate job creation, stimulate economic growth, ensure a global allocation of resources and improve the gross domestic product of the host country while strengthening its financial capacity. The only downside was that it was a long-term relationship that had to be maintained, ”Jacobs said.
A local example of FDI boosting employment opportunities is the South African contact center industry, she said.
“At first there was an outcry from locals because call centers had to employ foreign agents to facilitate customer service calls in foreign languages.
“What not everyone understood is how this led to the triple employment of South Africans in the internal departments of each company, such as finance, marketing, software development, human resources. , IT infrastructure, business intelligence and many more. “
Hindering the process
Jacobs said the government – especially the Home Office (DHA) and the Department of Labor (DoL) – must enable FDI and make it easier for the country to acquire the necessary skills. However, it seems the reverse is happening.
“Going forward, it looks like DHA will process general work visa applications, but the requirements would need to be fulfilled through the DoL first. This could intensify the disconnection that already exists between the two departments, ”she said.
“Not only is the DoL notoriously slow with the aforementioned application process, but it has been mandated to protect and create jobs in South Africa, while the DHA has been mandated to enable businesses to attract and bring in foreign talent to fill skills gaps. This puts the two departments at odds when it comes to tackling unemployment.
The benefits of recruiting international talent with the right skills can be many when you consider how it can influence the local workforce through skills development initiatives and concession planning, Jacobs said.
“Impeding or delaying the supply of foreign skills can have a direct impact on the speed at which the local workforce can engage with these skills. It is therefore essential that work permits or visas for skilled migrants are simplified for employers so that the revival of employment can benefit from the fruits of the sharing of skills.
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