Productivity SA proposes a way forward beyond covid-19

RE: Productivity SA proposes a way forward beyond covid-19 

The entity tasked with promoting employment growth in South Africa, Productivity SA, has released a document detailing a way forward for South Africa ‘s economic growth beyond the Covid-19 pandemic. The Chairman of Productivity SA Board, Prof Mthunzi Mdwaba says a productivity-driven economic growth approach provides massive potential for improved competitiveness and sustainable economic growth for South Africa and also commended measures put in place put in by the South African government.

To date the Unemployment Insurance Fund (UIF)’s special Covid-19 benefit has paid out R1.6-billion, assisting over 37,000 companies and 600,00 workers. R40 billion has been set aside for income support payments for workers whose employers are not able to pay their wages. An additional amount of R2 billion will be made available to assist Small Medium Enterprises(SMEs) and other small businesses.

In a statement by President Cyril Ramaphosa on further economic and social measures in response to the Covid-19 epidemic, R40 billion has been set aside for income support payments for workers whose employers are not able to pay their wages. An additional amount of R2 billion will be made available to assist SMEs and spaza shop owners and other small businesses. The government has been in consultations with various stakeholders and has met with business, labour and the community constituency in NEDLAC and measures to mitigate the worst effects of the pandemic on businesses, on communities and on individuals have been put in place. The measures included tax relief, the release of disaster relief funds, emergency procurement, wage support through the UIF and funding to small businesses.

The government is embarking on a massive social relief and economic support package of R500 billion, which amounts to around 10% of GDP. The  economic strategy will be the measures to stimulate demand and supply through interventions such as a substantial infrastructure build programme, the speedy implementation of economic reforms, the transformation of South Africa ‘s economy and embarking on all other steps that will ignite inclusive economic growth.

Whilst acknowledging the measure, Prof Mdwaba says there is a general lack of appreciation of the role of productivity in the country. The chairman says at the heart of South Africa’s economic problems is the fact that it has very low levels of productivity growth and sustained competitiveness.  The lack of productivity culture and accountability thereof, as well as policy framework and failure to deploy resources to promote productivity, is impacting negatively on the competitiveness and economic growth of the country.

The Chief Executive Officer(CEO) of Productivity SA, Mr Mothunye Mothiba, echoed the points raised by the chairman and says the lack of a productivity mindset and culture as well as accountability to unlock the productivity potential of the country at all levels (national, sector and at enterprise level) results in the exclusion of the majority of South Africans from the mainstream economy of the country.  Mr Mothiba says the low economic growth due to factors brought about by the  Covid-19 pandemic is  going to worsen the country ‘s socio-economic situation.

In the document, Productivity SA has called for South African policy to be guided by a structured and concerted effort to place productivity growth at the pinnacle of key economic growth policies. The duality nature and structure of the South African economy  requires urgent restructuring and reform.

This must be built on the following:

policy coherence and policy certainty across government;
a close collaborative effort between government, business and labour;
a commitment to ensure that the linkages between the primary and secondary productive sectors of the economy are maximised;
a combined and constructive drive to overcome the key constraints to manufacturing-led, value-adding growth, with special emphasis on labour-intensive sectors as advanced in the Sector Master Plans, such as agro-processing and clothing and textiles.
The chairman of Productivity SA concluded by saying South Africa should emulate the Productivity Policies and Frameworks adopted by the countries with a Competitiveness Score / Index Value of over 70 to unlock the potential of productivity to improve competitiveness and sustain economic growth.

Productivity SA proposes four pillars as follows:

An Integrated Training and Skills Development Ecosystem, Strategy and Programmes to encourage life-long learning;
There is an urgent need to review South Africa’s basic education system, to strengthen the focus on teaching quality, literacy, and STEM subjects – science, technology, engineering, and mathematics, entrepreneurship, as well as what is now being referred to as the Orange Economy integrating skills required for creative industries.
Strengthening South Africa’s human capital can help guide both public-sector and private sector organisations to create ‘retraining engines’ to enable lifelong learning.
An Integrated Enterprise Development Ecosystem to improve the competitiveness and sustainability of enterprises, with a focus on SMMEs; a policy decision that financial support by DFAs (SEFA, IDC, NEF, etc.) to SMMEs should be linked to productivity outcomes, and that non-financial (Enterprise Development Programmes) support should be coordinated.

 
An Integrated Research and Innovation Ecosystem to ensure the provision of productivity and competitiveness related value-added information and statistics to inform evidence-based planning as well as monitoring and evaluating the impact of our interventions. The partnership that we are currently forging with Institutions of Higher Learning such as UWC and Universities of Pretoria as well as the International Organisations such as the ILO seeks to drive the productivity movement.

 
A national Productivity Movement to promote a stronger culture of productivity at all levels and build awareness of the importance of and new mind-set about productivity in South Africa, which could pave the way for many more ‒ and more highly paid ‒ jobs and ultimately a more inclusive society.
The entity recommended the adoption of the Institute of Management Development (IMD) and World Economic Forum (WEF) Indices to assess the key drivers of long-term competitiveness and a full set of factors that determine productivity and long-term economic growth. A call is made for South Africa to support value creating SMMEs because they stimulate backward and forward linkages which can foster competition, innovation, diversification, international trade and growth.

ENDS

For more information, Contact the Productivity SA media liaison office, Maupi Monyemangene, on 011 848 5397/ 0824473232 or send an e-mail: maupim@productivitysa.co.za.  Issued by: Productivity SA