New dynamics needed in S.Africa’s labour sector - CNBC Africa

New dynamics needed in S.Africa’s labour sector

Southern Africa

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Diversification away from minerals could create more job opportunities in South Africa.

“The big change South Africa’s faced is on the back of booming mineral prices, a dip in the gold price, [and] a decline in the rand. The figures have not been high enough to create enough jobs in recent years,” Warwick Business School professor of international business Geoffrey Wood told CNBC Africa.

“If you talk about labour, the key thing is jobs. If you don’t have jobs, how does productivity fit in the picture?”

According to Adcorp’s employment index, South Africa’s labour productivity has been on a steady decline since 1995.

Over the last 18 years, the increases in real ages have not, according to the index, been matched by increases in worker productivity. The country’s declining labour productivity also has a significant influence on investor confidence.

“The second issue in South Africa is not so much technical skill but basic levels of education. Basic education and literacy are great failings in the school sector and that ultimately feeds into the productivity puzzle,” Wood explained.

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The discovery of oil and gas reserves in various parts of the continent could increase investment in Africa. However, some countries are not equipped with the necessary education and training, machinery and knowledge of extracting the resources.

While the extraction will create a number of long-term jobs, the real age increase structure will be crucial to the continuity of these excavations.

Countries such as South Africa will also have to begin considering the diversification away from minerals in order to increase economic productivity and job opportunities.

 “Last time there was an emphasis on diversification away from minerals, this time there’s growth again but there doesn’t seem to be a serious conversation about diversification. It’s not just an African problem,” said Wood.

Diversification could open another possibility for job creation, and trade unions have been a key mode of labour engagement in a number of economies.

“Unions have an important role to play in often saving managers from themselves. By forcing firms to pay decent wages, firms then are forced to think of ways of using labour more intelligently,” said Wood. 

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