The standing committee on appropriations is concerned about the recent figures of unemployment – 33.5% compared with 32.9% in the first quarter of 2024.
It is worrisome that 8.4 million South Africans are unemployed. Even more worrisome is that discouraged job seekers increased by 147 000 (4.8%) from just over three million in the first quarter to around 3.2 million in the second quarter.Using the expanded definition, unemployment increased to 42.6%.
This reflects a sustained period of low economic growth and an unsustainable fiscal framework. With 16% of the consolidated Budget going to debt repayment and 60% to social wage, little is left for growth and employment initiatives.
This is a call for a paradigm shift and a more robust budgetary oversight. It is a moment to prove that the Budget is the most potent policy instrument to effect change. A case in point is the R1.1 billion the committee approved through the 2024 Appropriation Bill. Some of the measures the committee will use:
Robust oversight over the government’s approach to budging
The approach to budgeting must change. Budgets must align with performance, growth, unemployment dynamics and trends. The committees are leading robust engagement on the structure and design of the provincial and local equitable share. The rationale and indicators used in the formula must reflect an outcome of an inclusive and thorough process.
The formula must account for various historical and emerging discrepancies in our provinces and communities. Interprovincial and intraprovincial migration must be considered in intergovernmental fiscal resource sharing.
Statistics SA’s recent report on the 2024 Mid-year population estimates is important in this regard. Fortunately, the engagements are under way with partners such as the National Treasury, the Financial and Fiscal Commission, Parliamentary Budget Office, Stats SA and Office of the Auditor-General of South Africa.
Keen focus on threats to growth and employment creation
Oversight and scrutiny will focus on major threats to economic growth and employment creation. The systemic culture of late payment of invoices is a case in point. According to the Treasury, at the end of 2023/24, a total of 362 068 invoices (valued at R35.1 billion) were paid after days.
An additional 114 908 invoices (valued at R10.7bn) remained unpaid at the end of 2023/24. These are national and provincial departments and exclude municipalities. This destroys SMMEs, the drivers of innovation and growth, hence the discouraging unemployment figures.
Increased Focus on Municipal Finances and Performance
The upward unemployment trajectory is unlikely to change unless municipalities are financially unviable and are unable to deliver on infrastructure investment. About 200 municipalities are in financial distress. Most municipalities underspend on infrastructure grants such as the Municipal Infrastructure Grant. This must change. It links to our robust engagements on the equitable share formula, especially in relation to impoverished provinces like North West. At 41.3% and 41% respectively, the unemployment rate in the provinces requires urgent attention. The situation is worse when including discouraged job seekers, as the expanded unemployment rate peaks at 54.2% in North West and 49.7% in the Eastern Cape. This is above the national average.
Rigorous oversight over the Department of Higher Education and Training
The committee has fixed its sight on Higher Education and Training. Through allocations to the National Student Financial Aid Scheme and the National Skills Fund, the department could do more to reduce youth unemployment. Allegations of mismanagement in the two pivotal entities are unwarranted.
Recent figures reveal that 35.2% of about 10.3 million young people aged 15 to 24 years were neither employed nor engaged in any form of education or training. This is not in line with the country’s developmental agenda.
Concluding Remarks:
With about 6 years to go, the government might not be on course to fulfil the National Development Plan’s target and vision of 5.4% annual average economic growth and 6% unemployment rate by 2030. However, the standing committee on appropriations will use its budgetary oversight powers towards a conducive environment for growth and employment.
Mmusi Maimane MP is chairperson of Parliament’s standing committee on appropriations