President Cyril Ramaphosa has sought to clarify his comments during his State of the Nation Address (SONA) last week that government does not create jobs.
“We all know that government does not create jobs. Business creates jobs. Around 80 per cent of all the people employed in South Africa are employed in the private sector,” Ramaphosa said at the time.
“The key task of government is 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.”
Developmental state and ‘vibrant’ private sector
Ramaphosa’s comments sparked much debate among political leaders and South Africans on social media, with some suggesting that he was reneging on his previous promises to create jobs.
However, writing in his weekly letter to the nation on Monday (14 February), the President said job creation requires both a developmental state and a vibrant private sector.
“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,” he explained.
“The reality is that we need both. We need a capable developmental state and a dynamic and agile private sector. We need them to work together and complement each other.”
ANC’s ‘Ready to Govern’ document
Ramaphosa further explained that this has been the position of the governing ANC since 1992 when it adopted its “Ready to Govern” document, which he said has influenced the government’s policy direction since 1994.
He outlined how state-owned enterprises, for instance, have expanded services such as electricity, water, roads and ports since 1994. The government also directs growth and transformation through competition policy, broad-based black economic empowerment provisions and employment equity laws, he added.
Beyond public service employment, the government also creates jobs through the Expanded Public Works Programme, Presidential Employment Stimulus, large-scale investments in infrastructure, special economic zones and support for labour-intensive growth industries, Ramaphosa explained.
He added, “The private sector employs some three quarters of South Africa’s workers and accounts for over two-thirds of investment and research and development expenditure. Alongside a capable and developmental state, our country therefore needs a thriving private sector that is investing in productive capacity.
“We will not achieve [a dynamic] economy without both a strong and capable developmental state and an inclusive, fast-growing private sector. We should not be asked to choose one or the other. We need both.”