Following his 2022 State of the Nation Address last week, President Cyril Ramaphosa stressed the roles of business and the State in growing the country’s economy.

In his Monday letter to the nation, Ramaphosa stressed that alongside a capable and developmental State, South Africa needs a thriving private sector that invests in productive capacity.

“Some people have suggested that we must make a choice between, on the one hand, a developmental State that plays a vital role in economic and social transformation, and, on the other, a vibrant, expanding private sector that drives growth and employment. The reality is that we need both,” he said.

He said both sectors need to work together and complement each other.

He noted that this year the focus is on small, medium-sized and micro businesses; cooperatives; and the informal sector, adding that government is making ‘bounce back’ finance more accessible for small businesses through the redesign of the loan guarantee scheme that the government introduced in the early months of the Covid-19 pandemic.

Government is also expanding the employment tax incentive and looking at various other regulatory changes to make it easier for small businesses to employ more people.

“As I indicated in the State of the Nation Address, these are among the measures we are taking as government ‘to create the conditions that will enable the private sector – both big and small – to emerge, to grow, to access new markets, to create new products, and to hire more employees’,” he said.

He explained that as private sector employment expands, more livelihoods are supported and sustained and more goods and services are delivered at a greater scale, allowing government to collect more revenue for social development. 

MORE WORK OPPORTUNITIES

Government is also directly involved in employment creation beyond those people employed in the public service, Ramaphosa said. He cited the Expanded Public Works Programme, which has been in existence since 2003, and which has provided work opportunities to millions of people.

More recently, in response to the economic impact of the Covid-19 pandemic, government oversaw the most significant expansion of public employment in the country’s history, he said.

The Presidential Employment Stimulus has supported more than 850 000 opportunities in just 16 months.

Meanwhile, government is providing support to unemployed young people to prepare them for work.

Large-scale infrastructure investments, the establishment of special economic zones and support to labour-intensive growth industries are also contributing to job creation.