With unemployment ballooning as a result of the Covid-19 pandemic, the Jobs Fund has reiterated its commitment to fighting unemployment, with its partners having committed R271-million to Covid-19 support interventions.
The Jobs Fund is a multiyear R9-billion fund administered by the National Treasury. Its primary mandate is to support initiatives that pilot innovative approaches to employment creation, to create 150 000 new jobs and learn from innovative models and build a knowledge base that can be used to contribute toward evidence-based policy-making.
The Jobs Fund notes that South Africa’s latest official unemployment rate of 30.1% means that about 7.1-million people were unemployed during the first quarter of the year. This number increases to 10.8-million if those who have given up the search for employment are included.
Further, with lockdown restrictions having commenced at the end of the first quarter, the Jobs Fund states that this number does not reflect what is “certainly going to be a new record” in the second quarter of the year.
Jobs Fund head Najwah Allie-Edries says there is little doubt that social and economic pain will be an inevitable outcome of the Covid-19 pandemic but the scale and depth remain unknown.
“What we do know is that the issue of jobs, particularly youth unemployment (41.8%), will be one of the greater challenges resulting from this crisis.”
Covid-19-induced constraints on economic activity have resulted in an unprecedented number of closures of small and medium-sized enterprises (SMEs) and hardships placed on smallholder farmers. There have also been massive job losses across many economic sectors.
Although government has taken extraordinary measures to protect the economy, among which is the introduction of financial support packages for businesses, more needs to be done, says Allie-Edries.
In this regard, the Jobs Fund has identified a funding gap affecting a number of its projects and has responded to protect the viability of its portfolio of job creation projects. The intervention aims to mitigate both the demand- and supply-side disruptions that the pandemic has on its projects, increasing their resilience and bolstering their ability to deliver on their job creation mandates during and post Covid-19.
The Jobs Fund’s support intervention is focused on addressing supply- and demand-side shocks by augmenting Jobs Fund partners’ and beneficiaries’ working capital requirements, de-risking investment by traditional banking sources of finance into job creation projects, and supporting ongoing skills development for youth and SMEs.
It also aims to support project partners and beneficiaries to comply with existing loan repayments and other covenants.
“The R271-million relief funding committed by the Jobs Fund and its partners to 23 projects ranges from support to microenterprises and small-scale farmers to supporting youth to improve their capabilities and skills and connecting them to the labour market,” she says.
The intervention will potentially impact more than 70 000 beneficiaries residing in mostly township and rural areas.
The support provided will ensure income protection for vulnerable businesses and individuals. It will also assist SMEs to become more resilient to withstand future shocks.
“Despite the unprecedented challenge we face, the Jobs Fund and its partners remain committed to meeting its job creation objectives and obligations,” concludes Allie-Edries.