Human Capital and Labour Report : South Africa [1 ed.] 9781869224981, 9781869224165

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The African Human Capital and Labour Reports will give you a better understanding and knowledge of the context of human capital and labour in terms of: Employment levels and trends, education and skills development, standards of living, health care, industrial relations, economic indicators, inter-cultural challenges, labour market efficiency and more. Where appropriate the various indicators were benchmarked against South Africa and Nigeria to provide a better perspective and context.

African Human Capital and Labour Report

African Human Capital and Labour Report Series

African Human Capital and Labour Report SOUTH AFRICA

These reports will: Assist you in your future HR planning

•

Give you a better grasp of the external influences on the workforce in each country

•

Empower you to improve your talent management programmes

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Give you a better understanding of wage and salary levels within each country

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Help you to better manage and ulitise your expatriates

SOUTH AFRICA

•

ISBN: 978-1-86922-416-5 Economic Indicators Health Care

Socio Economic Indicators

Labour Relations

Employment Trends

Education and Skills Development Expatriates

Living Standards

AFRICAN HUMAN CAPITAL AND LABOUR REPORT

South Africa



Copyright © Knowres Publishing and Knowledge Resources All reasonable steps have been taken to ensure that the contents of this work do not, directly or indirectly, infringe any existing copyright of any third person and, further, that all quotations or extracts taken from any other publication or work have been appropriately acknowledged and referenced. The publisher, editors and printers take no responsibility for any copyright infringement committed by an author of this work. Copyright subsists in this work. No part of this work may be reproduced in any form or by any means without the written consent of the publisher or the editor. While the publisher, editors and printers have taken all reasonable steps to ensure the accuracy of the contents of this work, they take no responsibility for any loss or damage suffered by any person as a result of that person relying on the information contained in this work. First published in 2014 ISBN: 978-1-86922-416-5 eISBN: 978-1-86922-498-1 Published by Knowres Publishing (Pty) Ltd P O Box 3954 Randburg 2125 Republic of South Africa Tel: (011) 706-6009 Fax: (011) 706 1127 E-mail: [email protected] Website: www.kr.co.za Printed and bound: Shumani Printers (Pty) Ltd, Parow Industria, Cape Town Typesetting, layout and design: Cia Joubert, [email protected] Cover design: Cia Joubert, [email protected] and Dina Nel, [email protected] Editing and proofreading: Elrene van Deemter, [email protected]

AFRICAN HUMAN CAPITAL AND LABOUR REPORT: SOUTH AFRICAN TEAM

Director and lead authors Wilhelm Crous Zia Attlee Research and statistics Nicolene Coertse Publishing Knowres Publishing; Cia Joubert Knowledge Resources Operations Team Zia Attlee, Debbie Atwell, Eddy Baloyi, Pascale Barrow, Nicolene Coertse, Sharon Crous, Marlene de Villiers, Tyron Ebel, Cia Joubert, Pearl Maphoshe, Magdeline Matlatse, Gugu Mazibuko, Dineo Moitoi-Modimakwane, Dina Nel, Thakane Ramashamole, Henriette van der Merwe, Katie van der Schyff, Michèle van Eeden, Abri Vosloo External Operations Team Natalie Cunningham, Louis Kroon, Ester Kruger, Cynthia Schoeman, Elrene van Deemter, Dave van Eeden, Theo Veldsman

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African Human Capital and Labour Report: SOUTH AFRICA

CONTENTS

ACKNOWLEDGEMENTS

iii

introduction to the African human capital and labour reports

iv

A Different Perspective

v

The Demographic and Labour Dividend

vi

Human Capital

vii

ABOUT THIS SERIES

viii

NOTE TO READER

ix

INTRODUCTION

1

Chapter 1: Country Profile

3

1.1 Introduction

4

1.2 BRIEF HISTORY

4

1.3 POPULATION, ECONOMY AND DIVERSITY

4

1.4 THE BUSINESS CULTURE

5

1.5 GOVERNANCE AND CORRUPTION IN SOUTH AFRICA

5

1.6 IMPLICATIONS, CHALLENGES AND RECOMMENDATIONS

8

CHAPTER 2: SOUTH AFRICA’S ECONOMY

11

2.1 BROAD ECONOMIC INDICATORS

12

2.2 COUNTRY STRATEGIC FRAMEWORK

17

2.3 COMPETITIVENESS AND EASE OF DOING BUSINESS

20

2.4 BROAD-BASED BLACK ECONOMIC EMPOWERMENT

22

2.5 LARGEST COMPANIES, AND FOREIGN INVESTMENTS

24

2.6 Foreign Aid to SOUTH AFRICA

25

2.7 FOREIGN INVESTMENT IN SOUTH AFRICA

25

2.8 SUMMARY

25

2.9 Implications, Challenges and Recommendations

26

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African Human Capital and Labour Report: SOUTH AFRICA

CHAPTER 3: SOCIO-DEMOGRAPHIC INDICATORS

29

3.1 POPULATION

30

3.2 Living Standards and Poverty Levels

42

3.3 INCOME DISTRIBUTION AND SOCIAL GRANTS

47

3.4 Healthcare

48

3.5 STRUCTURE AND NATURE OF HEALTHCARE

55

3.6 Implications, Challenges and Recommendations

60

CHAPTER 4: EDUCATION AND SKILLS DEVELOPMENT

64

4.1 Qualifications Profile of the Population and LABOUR force 66 4.2 Levels of Education

70

4.3 TERTIARY EDUCATION

83

4.4 The Quality of Higher Education and Training

92

4.5 HUMAN CAPITAL DEVELOPMENT AND INCOME INEQUALITY

93

4.6 INNOVATION IN SOUTH AFRICA

94

4.7 Implications, Challenges and Recommendations

95

CHAPTER 5: THE LABOUR MARKET

99

5.1 Economically Active Population

100

5.2 Employment by Industry Sectors

103

5.3 EMPLOYMENT AND UNEMPLOYMENT TRENDS

109

5.4 Job Creation Strategies and Programmes

121

5.5 EMPLOYMENT EQUITY

124

5.6 SUPPLY AND DEMAND OF DIFFERENT SKILL LEVELS AND

DIFFERENT JOB CATEGORIES

127

5.7 TECHNICAL AND VOCATIONAL EDUCATION AND TRAINING (TVET) IN SOUTH AFRICA

129

5.8 Expatriates, Immigrants and SOUTH AFRICAN Diaspora

138

5.9 Wage and Salary Trends

144

5.10 Industrial Relations Framework

149

5.11 CONDITIONS OF EMPLOYMENT

153

5.12 TRADE UNIONS, INDUSTRIAL ACTION AND DISPUTE RESOLUTION 156 5.13 Labour Market Efficiency

165

5.14 PROFESSIONAL HUMAN RESOURCES MANAGEMENT IN

SOUTH AFRICA

5.15 Implications, Challenges and Recommendations

168 172

Recommended Resources

182

References

183

ENDNOTES

189

African Human Capital and Labour Report: SOUTH AFRICA

ACKNOWLEDGEMENTS

The African Human Capital and Labour Report: South Africa was prepared by a team involved with in-depth research, design and layout, editing, proofreading and also providing advice on various aspects of the report. A number of people also commented and provided feedback and input in various ways. I would like to acknowledge and thank all of them for their contribution. In alphabetical order they are: Zia Attlee, Debbie Atwell, Eddy Baloyi, Pascale Barrow, Nicolene Coertse, Sharon Crous, Natalie Cunningham, Marlene de Villiers, Tyron Ebel, Cia Joubert, Louis Kroon, Ester Kruger, Pearl Maphoshe, Magdeline Matlatse, Gugu Mazibuko, Dineo Moitoi-Modimakwane, Dina Nel, Thakane Ramashamole, Cynthia Schoeman, Elrene van Deemter, Henriette van der Merwe, Katie van der Schyff, Dave van Eeden, Michèle van Eeden, Theo Veldsman, Abri Vosloo. Wilhelm Crous Managing Director and Project Coordinator Knowledge Resources June 2014

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African Human Capital and Labour Report: SOUTH AFRICA

introduction to the African human capital and labour reports The African continent is large. The US, China and India would fit within its borders with space to share for a few European countries too! Africa is, however, not a homogeneous collection of countries. Similar to Europe, for instance, the 52 countries in Africa differ from each other regarding languages (more than 2,000) cultures, stages of economic development, risk profiles and, very importantly, the sizes and quality of Human Capital. Interest in Africa is on the increase. Africa is seen as the new economic frontier. Investors are scrambling for resources as well as for the new fast growing middleclass consumers. New political democracies are established, and political and investor risk is decreasing. For decades Africa’s deterioration or lack of economic growth was caused by weak governance, autocratic corrupt leaders, ethnic conflict, widespread nationalisation, as well as the slump in food and commodity prices in the 70s and 80s.1 One could add to that the negative legacy of colonisation, independence and liberation wars and, for South Africa, Apartheid. The changing environment was confirmed further by The Economist – The World in 2014:

Not long ago, slow-growing economies with high inflation were the norm in sub-Sahara Africa. Average GDP growth across the continent during the 1990’s was only 2,2%, dismal for such a poor region. Average inflation was 27%. Now this has changed. Since 2001 Africa’s GDP has expanded more quickly each year than the global average. In the past decade, only the developing Asian economies, led by China, has grown faster than Africa. Even as China slows there is enough momentum for Africa’s GDP (adjusted for the purchasing power of its currencies) to grow around 5,5% in 2014, the average rate over the past decade – faster than any other region in the world.2

No wonder that the cover articles in The Economist over the last 13 years tell a vastly different story: •

May 13th, 2000 edition: The hopeless continent.

•

December 3rd, 2011 edition: Africa rising.

•

March 2nd, 2013 edition: Aspiring Africa.

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African Human Capital and Labour Report: SOUTH AFRICA

International companies such as Barclays, Vodacom, Siemens, Unilever, GE, Walmart, and TATA have all increased their presence. In addition, home-grown brands such as MTN, Shoprite, Woolworths, Sasol, Econet, FNB and Dangote Cement have all expanded across Africa. This trend will probably continue and even increase in future. In 2012 The Economist Intelligence Unit interviewed 158 large investment managers about their planned African investments over the next five years. It found that fewer than one in ten money managers are investing more than 3% of assets under management in Arica today, while nearly eight of the ten will be doing so in five years.3 The continent’s growth is not only commodity driven. The Financial Times (11 January 2014) reported that Africa is becoming the new battleground for global domination amongst hotel groups.4 This is driven by the fact that in 2012 international arrivals surpassed the 50 million mark for the first time, generating USD 33 billion in revenue. The UN World Tourism Organisation forecasts arrivals will top USD 85 million by 2020. No wonder Marriott took over Protea Hotels for USD 186 million. It is not only commodities and political reforms that are driving economic growth, but also urbanisation and, specifically, the mobile phone revolution. Devarajan and Fengler make the point that “in many African countries, the calling rates are among the lowest in the world. The explosion in mobile technology has spurred innovations such as M-Pesa, the mobile-money system widely embraced in Kenya and Tanzania, which allows users to make purchases and send cash transfers by using their cell phones. In many countries, the spread of mobile devices has also allowed the information and communication sector to become important parts of the economy.”5

This business boom is not just an isolated development limited to a few outlier countries. If these dynamics accelerate and attain critical mass in several major African economies, as I believe they will, the regional and global effects could be consequential.6 Mohamed A. El-Erian, former CEO of PIMCO. He is Chief Economic Advisor at Allianz and member of its International Executive Committee, Chair of President Obama’s Global Development Council and author of the NYT/WSJ bestseller When Markets Collide.

A Different Perspective Although Africa is experiencing fast economic growth, the quality and inclusiveness of this growth are of increasing concern. The African Development Bank maintains that good economic growth has failed in creating the number of quality jobs necessary to absorb the 10-12 million young people entering the labour market each year. Africa is also the second most inequitable region in the world. In 2010, six of the 10 most unequal countries worldwide were in sub-Saharan Africa, particularly southern Africa. The most striking increase in inequality is found in South Africa and the Central African Republic with Gini coefficients rising from .58 to .67 in 6 years (2000 – 2006) and .43 to .56 in 5 years (2003 – 2008) respectively.7

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African Human Capital and Labour Report: SOUTH AFRICA

Two leading economists of the World Bank, Shantayanan Devarajan and Wolfgang Fengler, make the following arguments for being optimistic in an authoritative article: Africa’s Economic Boom: Why the Pessimists and the Optimists Are Both Right:8 •

Sub-Sahara’s GDP growth averaged over 5% since 2000 – even countries which are not rich in resources boomed.

•

The region attracts private capital of about USD 50 billion a year.

•

Poverty is declining and great strides are being made in education and healthcare. Between 2000 and 2008, secondary school entries increased by 50%, and over the last 10 years life expectancy has increased by about 10%.

However, there is also a pessimistic view: 9 •

Africa is currently riding a commodities wave and will suffer severely if there is an inevitable downturn

•

The manufacturing sector has currently the same share of overall GDP that it had in the 1960s

•

Political instability and country-wide violence is still widespread, for example Guinea-Bissau, Mali, South Sudan, Democratic Republic of Congo (DRC) and Central African Republic (CAR)

•

Infrastructure is inadequate or in poor condition, corruption is rampant and many governments struggle to provide basic services

•

In many countries a small but politically powerful elite capture the bulk of the wealth creation at the cost of the population.

Devarajan and Fengler conclude that both opinions are correct. However, the optimists are closer to the mark. This optimism exists despite obstacles, especially when it comes to improving human capital in the following sectors: education, skills development and health of the population.10

The Demographic and Labour Dividend While most of the developed world is growing older, Africa will have a young workforce for decades to come. Shortly after 2030, more than 60% of Africans will be working age. By 2040, Africa will have a larger working population than China and India. Africa will reap the benefits of this so-called demographic dividend about 10 years after Asia does. Africa’s workforce is not only young and growing, but also better educated than ever before.11

Count me among the growing number of people excited and hopeful about what’s happening on the ground in Africa. Markets are booming, and this time it’s not just gold mines and oil rigs; it’s a new generation of workers and entrepreneurs.12 Mohamed A. El-Erian, former CEO/co-CIO of PIMCO.

African Human Capital and Labour Report: SOUTH AFRICA

Human Capital Africa’s richness and potential are not only locked-up in minerals and commodities, but even more so in the opportunity and challenges that diversity and human capital offer: in fact, it is Human Capital that makes the difference. Brian Keeley from the OECD (2007) indicates that “Economic success crucially relies on Human Capital – the knowledge, skills, competencies and attributes that allow people to contribute to their personal and social well-being, as well as that of their countries”.13 Raising Human Capital does not only refer to education and training, but also to the improvement of health levels, community involvement and employment prospects. Of the 12 pillars which make up the Global Competiveness Index compiled by the World Economic Forum, four pillars are directly related to Human Capital, namely, Health; Primary and Higher Education and Training; Labour Market Efficiency; and Innovation. This reveals that a nation should focus very clearly on the consistent development and upgrading of Human Capital at national level. Keeley states that the link between Human Capital and economic growth is real and significant.14 This has been confirmed by evidence from the OECD which shows that if the average time spent in education by a population rises by one year, then economic output per head of population should grow by between 4% and 6% in the long run.15 However, this is where Africa is at a disadvantage. There is a tremendous lack of high level skills, despite the vast potential pool of talent which exists on the continent. For example, a major weakness of Africa as a whole is the low level and complete lack of adequate managers. A lack of managerial skills lies at the heart of Africa’s low productivity and service delivery inadequacies. According to Pfeffermann, the lack of management skills and knowledge are the reasons why aid and investment money disappear, and service programmes fail.16 He is of the opinion that “local management education institutions that combine international best practice with local relevance are the key to building the pool of management talent that Africa needs to generate prosperity. They provide companies, NGOs, government and small business with quality managers that have cultural understanding no expatriate armed with a foreign MBA program can match. Just as importantly, they lessen the devastating effects of ‘Brain drain’ of a community’s best and brightest to institutions and jobs in more prosperous nations. Right now the high-quality business schools serving Africa are far too small. They do what they can to grow the talent pool, but Africa’s rapid economic growth has vastly outstripped the supply of relevant local managers.”17

The fact is that despite some catch-up over the last decade, the countries of subSaharan Africa still have the lowest levels of human capital in the world.18 Shantayanan Devarajan (Chief Economist of the World Bank’s Africa Region) and Wolfgang Fengler (the World Bank’s Lead Economist for Eritrea, Kenya and Rwanda)

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African Human Capital and Labour Report: SOUTH AFRICA

ABOUT THIS SERIES A wide range of reports, research studies and various analyses exist that refer to the economic and political dispensation of African countries. Information about the Human Capital and Labour Force of any African country is, however, fragmented. The aim of these reports is thus to offer an integrated view and analysis of the quality and quantity of Human Capital in African countries. The African Human Capital and Labour Reports offer in-depth analyses of the labour forces in individual countries. The focus is on the demographics of the labour force, economically active population and, specifically, education and skills levels. The emphasis is, therefore, on the quality and quantity of Human Capital which are important when making human resource management decisions. Governments and policy makers also need an integrated view. The same applies to economists and social scientists alike. Investors and donors are also required to make more informed decisions about the human capital aspects of their objectives and interventions.

Invest aggressively in Talent and Human Resources Some companies are starting to crack the talent and leadership code in Africa, giving them a running lead over their competitors on the continent. For example, spirits maker Diageo has reduced its share of expatriate managers in Africa from 70 percent to 30 percent through rigorous local training.19 Many companies have started to tap into the African diaspora, whose members are increasingly ready to return home, as a source of talent. The Unilever Future Leaders Programme, for example, encourages African business-school graduates living abroad to return to Africa. According to Jacana Partners, an African private-equity firm, 70 percent of African MBA students studying abroad would be willing to relocate to Africa. Two-thirds of all recruiting searches for African positions focus on Africans employed in the U.S. and Europe.20 Patrick Dupoux, Tenbite Ermias, Stéphane Heuzé, Stefano Niavas, and Mia von Koschitzky Kimani (The Boston Consulting Group)

African Human Capital and Labour Report: SOUTH AFRICA

Note to Reader In compiling this series it was clear from the start that reliable and accurate up-to-date datasets were not always available, despite the fact that well-respected organisations such as the World Bank, World Health Organization (WHO), United Nations Educational, Scientific and Cultural Organization (UNESCO), the African Development Bank (AfDB), the World Economic Forum (WEF), the International Monetary Fund (IMF), etc. were researched for information. The data accessed from each country’s respective government departments, central banks, bureaus of statistics and other sources were sometimes questionable and dated. Our research team did their best to confirm and cross-check various datasets, but it was obvious that the quality and availability of data differ from country to country. What is clear from the research is that the respective governments and various development agencies will have to find more resources for upgrading the capacity of the various departments and bureaus of statistics. Our experience has been confirmed by Prof Morten Jerven in the book Poor Numbers – How We Are Misled by African Development Statistics and What To Do About It.21 His opening paragraph in the book probably sketches a worst-case scenario:

How do they even come up with these numbers? That was the question I wanted to answer. It was 2007 and I went to Zambia to do fieldwork for my doctoral thesis in economic history. I wanted to examine how national income estimates were made in African countries. I was struck by the derelict state of the Central Statistical Office in Lusaka. The planned agricultural crop survey was being delayed by the need for car repairs, most of the offices were dark, and the computers were either missing or very old. The national accounts division had three employees, of whom only one was regularly in the office while I was visiting. No one at the office could account for how the income estimates had been made more than a decade ago.22

A major flaw in some of the datasets is the base year for analysing subsequent statistics. In many instances the base year was set decades ago, the result being that in many (or probably most) cases the actual situation was understated. A case in point is the recent rebasing of the Nigerian GDP from 1994 to 2014 – the result was a massive increase in the size of the economy from USD 285 billion to USD 510 billion. As Jerven puts it “... there is some evidence that better numbers are indeed higher numbers”.23 Having made the cautionary comments above, we are still confident that these reports present the most comprehensive analysis of Human Capital and Labour in the respective countries.

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African Human Capital and Labour Report: SOUTH AFRICA

INTRODUCTION

The quality and, to a lesser extent, the quantity of a country’s labour force are prerequisites for a country’s economy to grow sustainably over the long term. The African Human Capital Report – South Africa focuses on broad Human Capital indicators. i.e.: •

Socio-Demographic

indicators,

including

population parameters, standard of living and poverty measures. •

Capital Report – South Africa, focuses

Healthcare and Wellness: The focus here is on the

on broad Human

impact of Tuberculosis (TB), HIV/AIDS and malaria

Capital indicators.

on the workforce and workplace; the availability of specialist healthcare and also primary and secondary healthcare. •

The African Human

Education trends, including the education level of the population and workforce; as well as education standards and output.

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African Human Capital and Labour Report: SOUTH AFRICA

•

Labour Force, including the economically active population, job creation, employment sectors, skills shortages, the training and skills development framework, employment of expatriates, brain drain, industrial relations and so on.

Throughout the report implications, challenges and recommendations are offered to employers, policy makers, donors, investors and the human resource management fraternity. This is all done within the context of the South African socio–economic realities. Where appropriate, comparisons were made with Kenya, Nigeria and sub–Saharan Africa. Nigeria was selected because of being the largest economy in Africa; Kenya for being the largest economy in East Africa and also being viewed as an entry point for investors to enter into Africa. The data of these countries are used to provide context and perspective. The report refers only briefly to the South African economy, political situation or general risk factors. There are dozens of reports, research and publications available in that regard for those who wish to apprise themselves of information relating to those areas. This report is unique by its predominant focus on the South African labour force.

African Human Capital and Labour Report: SOUTH AFRICA

1

Country Profile

This chapter provides a brief overview of the country. Investors are, however, concerned about corruption and the governance structure in African countries and, therefore, these specific themes are also addressed here.

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African Human Capital and Labour Report: SOUTH AFRICA

1. Country Profile

1.1. Introduction The Republic of South Africa (RSA) is located at the southern tip of Africa. The RSA is bordered by Namibia, Botswana, Zimbabwe, Mozambique and Swaziland. Lesotho lies within the borders of South Africa. South Africa comprises a total area of 1,221 million km2 or 471,443 sq. miles. South Africa has three capitals, Pretoria (Tshwane) is the administrative capital, Bloemfontein is the judicial capital and Cape Town is the legislative capital. Its largest city is Johannesburg, which is also the centre of commerce, finance and industry.24

1.2. Brief History South Africa became independent from Britain in 1910. In 1948 the National Party came to power and developed the Apartheid policy. In 1961 the country became a republic. The African National Congress (ANC) offered the main opposition against Apartheid. An armed struggle/insurgency was started in the 1960s, which led to the imprisonment of many of its leaders, amongst others, Nelson Mandela. After prolonged protests, an insurgency, boycotts and sanctions from most countries in the world, the regime started negotiations with the ANC and other opposition parties during the early 1990s towards a peaceful transition to majority rule. During April 1994 the first democratic multi-party elections were held, and the ANC with Nelson Mandela as president came into power. Mandela’s presidency was characterised by the successful negotiation of a new constitution, a start on the massive task of restructuring the civil service, an attempt to redirect national priorities to address the results of apartheid, and the Truth and Reconciliation Commission, set up primarily to address the wrongs of the past.25 Over the following 20 years, South Africa held a number of free and fair democratic elections and although still a relatively young democracy, it is a well-established, democratic state. After the 2014 elections the ANC is still in power, led by President Jacob Zuma.

1.3. Population, Economy and Diversity With a total population of 53 million, the country is a multi-ethnic society that includes a wide variety of cultures, languages and religions. 26 The constitution recognises 11 official languages; English is, however, the business language and is also commonly used in public life. South Africa is ranked as an upper-middle income economy by the World Bank, and is considered to be a newly industrialised country. 27 Although the economy is only the second largest in Africa, it is the most developed in Africa, and the 28th largest in the world. In 2011 South Africa formally joined the BRICS (Brazil, Russia, India and China) group of countries. The country is also a member of SADC (South African Development Community).

African Human Capital and Labour Report: SOUTH AFRICA

The RSA has one of the biggest mining industries in the world (platinum, gold, diamonds, coal, iron ore, etc.). Tourism is a fast-growing industry and the country is admired for its natural beauty and biodiversity, being ranked sixth of the world’s seventeen mega–diverse countries.28 South Africa boasts 20,000 different plant species, which is about 10% of the known species of plants on earth.29 The Kruger National Park is renowned worldwide.

1.4. The Business Culture Despite being a multicultural society, the business culture is very similar to Western, European and USA business cultures, mainly a legacy of colonisation as well as the influence from multinational companies (MNCs) in South Africa. Generally speaking, the business attire for men is a suit, jacket and tie (optional); and for women a business suit/skirt/trousers are acceptable. Meetings start on time, preferably scheduled well in advance. Business cards are treated with respect.30 There is a strong campaign against corruption and bribery, and businesses are increasingly wary of any unlawful actions that might lead to lawsuits or severe restrictions in on-going business operations. If invited for dinner or a drink to a South African home, it is appropriate to bring the host/hostess a gift: flowers, a bottle of high quality wine or good chocolates are acceptable.31

1.5. Governance and Corruption in South Africa 1.5.1. Ibrahim Index of African Governance Established in 2007, the IIAG is the most comprehensive collection of quantitative data on governance in Africa. Compiled in partnership with experts from a number of the continent’s institutions, it provides an annual assessment of governance in every African country. The IIAG provides a framework for citizens, governments, institutions and businesses to assess the delivery of public goods and services, and policy outcomes across Africa.32 This index is a comprehensive measure of African government, based on the following variables:33 1. Safety and Rule of Law 2. Participation and Human Rights 3. Sustainable Economic Opportunity 4. Human Development. In 2012 South Africa ranked 5th on the Ibrahim Index of African Governance (IIAG), which ranks behind Mauritius (1st) but well ahead of Nigeria ranked 41st of 52 countries. 34 Since 2000 South Africa has improved only slightly on the overall index from 70.7% to 71.3%. The increase was substantially lower

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African Human Capital and Labour Report: SOUTH AFRICA

than that of Africa overall (Table 1.1). The country has deteriorated in the areas of “safety and rule of law” as well as “participation and human rights”.35 Table 1.1: Ibrahim Index of African Governance: South Africa, Kenya and Nigeria (2000 & 2012)

 

South Africa

Indicator

2000

2012

2000

2012

2000

2012

2000

2012

Safety and rule of law

73.0

69.8

84.5

86.8

42.5

41.0

53.8

52.7

Participation and human rights

77.7

73.1

76.0

76.7

45.9

37.7

45.2

48.4

59.3

65.1

64.4

79.7

37.3

42.2

41.4

47.0

Human development

73.0

77.4

77.4

88.5

44.8

52.7

48.1

58.3

Overall

70.7

71.3

75.6

82.9

42.6

43.4

47.1

51.6

Sustainable economic opportunity

Mauritius

Nigeria

Africa

Source: Ibrahim Foundation, 2014. 36

For more information on how the index is compiled and which countries participate, visit the Mo Ibrahim Foundation website at: http://www.moibrahimfoundation.org/iiag/

1.5.2. The Corruption Perceptions Index The Corruption Perceptions Index (CPI), compiled by Transparency International, measures the perceived levels of public sector corruption in countries

In 2012 South Africa

worldwide. 37 Based on expert opinion, countries are

ranked 5th on the

scored from 0 (highly corrupt) to 100 (very clean). Some countries score well, but no country scores a

Ibrahim Index of African

perfect 100.38

Governance (IIAG),

Over a three-year period the RSA has deteriorated

which ranks behind

significantly on the CPI. In 2010 the country was ranked 54th with a score of 45, but in 2013 it slipped

Mauritius (1st) but well

to the 72nd position with a score of 42. Countries

ahead of Nigeria.

such as Rwanda, Turkey and Namibia, which ranked below South Africa in 2010, are now ranked ahead of the country.39 (See Table 1.2 below).

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African Human Capital and Labour Report: SOUTH AFRICA

Table 1.2: Corruption Perceptions Index for South Africa and selected countries (2010 & 2013)

Country

2010

2010 Score

Ranking/178

2013

2013 Score

Ranking/177

Botswana

33

58

30

64

Rwanda

66

40

49

53

Turkey

56

44

53

50

Namibia

56

44

57

48

South Africa

54

45

72

42

Brazil

69

37

72

42

Tanzania

116

27

111

33

Vietnam

116

27

116

31

Kenya

154

21

136

27

Nigeria

134

24

144

25

DRC

164

20.0

154

22.0

Libya

144

22.0

172

15.0

Somalia

178

11.0

175

8.0

Sources: Transparency International, 201040 & Transparency International, 2013.41

For information on how the scores are calculated, which source documents are used, as well as more detailed country profiles, visit Transparency International’s website at www.transparency.org .

1.5.3. Corporate Governance South Africa has one of the world’s best regulated and stable financial institutional and banking regimes.42 This was quite evident again during and after the credit crunch of 2008. The country is also admired for its auditing and accounting standards.43 Sound corporate governance is a major priority for organisations. A series of guidelines were produced through King I, King II and, lately, the King III reports. These recommendations were accepted and provide the basis for sound corporate governance in the country.44 King III has broadened the scope of corporate governance in South Africa with its core philosophy revolving around leadership sustainability and corporate citizenship.45 The following key principles are given prominence in the King III report: 46

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African Human Capital and Labour Report: SOUTH AFRICA

•

Good governance is essentially about effective leadership. Leaders need to define strategy, provide direction and establish the ethics and values that will influence and guide practices and behaviour with regard to sustainability performance.

•

Sustainability is now the primary moral and economic imperative, and it is one of the most important sources of both opportunities and risks for businesses. Nature, society, and business are interconnected in complex ways that need to be understood by decision-makers. Incremental changes towards sustainability are not sufficient – we need a fundamental shift in the way companies and directors act and organise themselves.

•

Innovation, fairness, and collaboration are key aspects of any transition to sustainability – innovation provides new ways of doing things, including profitable responses to sustainability. Fairness is vital because social injustice is unsustainable, and collaboration is often a prerequisite for large-scale change.

•

Social transformation and redress is important and needs to be integrated within the broader transition to sustainability. Integrating sustainability and social transformation in a strategic and coherent manner will give rise to greater opportunities, efficiencies and benefits, for both the company and society.

•

King II required companies to implement sustainability reporting as a core aspect of corporate governance. Since 2002, sustainability reporting has become a widely accepted practice, and South Africa is an emerging market leader in this field. However, sustainability reporting is in need of renewal in order to respond to: a.

The lingering trust deficit among civil society of the intentions and practices of big business.

b. Concerns among business decision-makers that sustainability reporting is not fulfilling their expectations in a cost-effective manner. For an Executive Guide to King III go to http://www.pwc.co.za/en/king3/

1.6. Implications, Challenges and Recommendations 1.6.1. General The transition from white minority rule to a mainly black government, through relatively peaceful transitional and democratic processes, is nothing short of a miracle. The transformation of government institutions, the expansion of service delivery and education, for instance, are very impressive. Challenges remain and the country will have to do more to attract foreign investors and create a safer society for all.

1.6.2. Culturally diverse and rich society The diversity of South African society is a wonderful source of creativity, multiple perspectives and attraction for tourists. Very little conflict exists among the different ethnic groups in South Africa. From time to time conflict against foreigners who trade and do business in townships flares up, but that is probably more a function of socio-economic constraints in the townships than xenophobic trends.

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African Human Capital and Labour Report: SOUTH AFRICA

Nevertheless, this potential for conflict should continuously be monitored and addressed.

1.6.3. Governance and Corruption In most South African organisations, corporate governance can be considered world-class – this is true for public companies listed on the Johannesburg

In most South African

Stock Exchange. In this regard the Institute of

organisations, corporate

Directors (http://www.iodsa.co.za/) and the South African Institute of Chartered Accountants (https://

governance can be

www.saica.co.za/) play major roles.

considered world-

Urgent attention is required in the areas of safety,

class – this is true for

rule of law and the perception of corruption in public institutions. Government, at its different levels, needs to eliminate bribery and corruption. The government has announced and is implementing various steps in this regard. However, the time lag between decisions

public companies listed on the Johannesburg Stock Exchange.

and results is creating the impression that the situation is getting worse. Employers can also play a bigger role in fostering sound ethics within organisations and society at large, and top management should play the leading role in this regard. Ethical and sound corporate governance is part and parcel of professional human resources management and should be practised as such. Orientation and training programmes could be implemented to instil sound corporate values, which should become the DNA of the company. These actions will also have a positive impact on society at large.

African Human Capital and Labour Report: SOUTH AFRICA

2

South Africa’s Economy The South African economy is the second largest on the continent and, at the same time, the most modern. Many sectors of the economy, such as the financial services industry, are considered world-class.

11

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African Human Capital and Labour Report: SOUTH AFRICA

2. The South African Economy

2.1. Broad Economic Indicators 2.1.1. GDP and Structure of the Economy The South African economy is the second largest on the continent and, at the same time, the most modern. Many sectors of the economy, such as the financial services industry, are considered world-class.

2.1.2. GDP and structure of the Economy The size of South Africa’s GDP in 2013 was USD 354 billion: USD 139 billion smaller than that of Nigeria and about eight times larger than Kenya’s.47 (These

Based on the

figures reflect the newly rebased GDP of Nigeria.) According to these forecasts, the South African GDP

International Monetary

was 27% of the total for sub-Saharan Africa in 2013

Fund (IMF) forecasts,

48

as opposed to 39% in 2000.49 It is clear that the other African countries are growing substantially quicker

the size of South

than South Africa; for example, the IMF forecasts that

Africa’s GDP in 2013

in 2018 the present gap in GDP between South Africa and Nigeria of USD 139 billion will increase to USD

was USD 354 billion.

230 billion. (See Table 2.1 and Figure 2.1). 50

Table 2.1 Regional comparison: GDP current (USD billions) (2000–2012) and projected (2013–2018)

Country

2000

2005

2010

2012

2013

2014

2016

2018

132,878

247,052

363,241

384,313

353,911

371,211

414,523

464,285

Kenya

12,705

18,738

32,231

37,338

45,311

51,057

62,474

76,757

Nigeria

45,983

112,248

228,638

262,606

292,028

510,000

587,885

694,245

342,171

651,084

1,144,084

1,305,988

1,315,420

1,607,010

1,848,626

2,140,829

name South Africa

Sub– Saharan Africa Sources: 2000–2012 data: World Bank, 2013.51 2013–2018 data: International Monetary Fund (IMF), 2013.52

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African Human Capital and Labour Report: SOUTH AFRICA

2,500,000

2,000,000

South Africa

USD Billions

1,500,000

Kenya Nigeria

1,000,000

Sub-Saharan Africa

500,000

0 2000

2005

2010

2012

2013

2014

2016

2018

Year

Sources: 2000–2012 data: World Bank, 2013.53 2013–2018 data: International Monetary Fund (IMF), 2013.54

Figure 2.1: Regional comparison: GDP current (USD billions) (2000–2012) and projected (2013–2018)

The South African economy is diverse, with the contribution of the various sectors contributing to GDP as follows (2012 data) (see Figure 2.2): 55 •

Finance, real estate and business services: 21.2%

•

Government services: 16.7%

•

Wholesale, retail and motor trade: 16.2%

•

Manufacturing: 12.3%

•

Mining: 10%

•

Transport, storage and communication: 9%

•

Personal services: 5.9%

•

Construction: 3.9%

•

Electricity and water: 2.6%

•

Agriculture: 2.2%

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African Human Capital and Labour Report: SOUTH AFRICA

South Africa’s GDP 4%

Finance, real estate and business services

3% 2%

Government services

21%

6%

Wholesale, retail and motor trade 9%

Manufacturing Mining

10%

Transport, storage and communication

17%

Personal services Construction

12%

Electricity and water 16%

Agriculture

Source: SouthAfrica.info, 2014.56

Figure 2.2: Sectors contributing to South Africa’s GDP (2012)

2.1.3. Economic Growth Rate The South African annual GDP growth rate is presently between 2%–3%57 and, although the IMF forecast the growth rate to accelerate to 3.5% towards the end of the decade, it is lagging behind that of subSaharan Africa and, specifically, the economies of Kenya and Nigeria. 58 Despite the slow growth rate, the economy will add another USD 100 billion in in GDP the five years between 2013 and 2018.59 (See Table 2.2 and Figure 2.3). Table 2.2: Regional comparison: GDP growth rates (%) (2000–2012) and projected (2013–2018) 2000

2005

2010

2012

2013

2014

2016

2018

South Africa

4.15

5.28

3.09

2.55

2.00

2.93

3.43

3.48

Kenya

0.60

5.91

5.80

4.56

5.86

6.25

6.65

6.07

Nigeria

5.40

5.40

7.98

6.55

6.24

7.37

6.84

6.56

Sub–Saharan Africa

3.70

5.79

4.97

4.20

4.96

6.01

5.65

5.68

Sources: 2000–2012 data: World Bank, 2013.60 2013–2018 data: International Monetary Fund (IMF), 2013.61

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African Human Capital and Labour Report: SOUTH AFRICA

9.00 8.00 7.00

GDP growth rates (%)

6.00

South Africa

5.00

Kenya

4.00

Nigeria

3.00

Sub-Saharan Africa

2.00 1.00 0.00 2000

2005

2010

2012

2013

2014

2016

2018

Year

Sources: 2000–2012 data: World Bank, 2013.62 2013–2018 data: International Monetary Fund (IMF), 2013.63

Figure 2.3: Regional comparison: GDP growth rates (%) (2000–2012)*

2.1.4. GDP Per Capita in USD According to the IMF, the South African GDP per capita was USD 6.847 in 2013,64 which is about 6.5 times larger than Kenya’s and 2.4 times larger than that of Nigeria.65 The difference in absolute terms will widen over the next five years. This is mainly due to higher population growth rates in Kenya and Nigeria. (See Table 2.3 and Figure 2.4). Table 2.3: Regional comparison: GDP per capita (USD ) (2000–2012) and projected (2013–2018)

Country

2000

2005

2010

2012

2013

2014

2016

2018

South Africa

3,050

4,850

6,100

7,610

6,847

7,096

7,737

8,460

Kenya

420

520

800

850

1,046

1,146

1,325

1,540

Nigeria

270

630

1,240

1,430

1,725

2,931

3,202

3,582

Sub–Saharan Africa

494

769

1,182

1,355

1,896

2,064

2,438

2,843

Sources: 2000–2012 data: World Bank, 2013.66 2013–2018 data: International Monetary Fund (IMF), 2013.67

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African Human Capital and Labour Report: SOUTH AFRICA

9,000 8,000 7,000

USD units per capita

6,000

South Africa

5,000

Kenya

4,000

Nigeria

3,000

Sub-Saharan Africa

2,000 1,000 0 2000

2005

2010

2012

2013

2014

2016

2018

Year

Sources: 2000–2012 data: World Bank, 2013.68 2013–2018 data: International Monetary Fund (IMF), 2013.69

Figure 2.4: Regional comparison: GDP per capita (USD) (2000–2012) and projected (2013–2018)

2.1.5. South Africa’s CPI – Inflation Rate The South African inflation rate is currently 6% (March 2014), which is mainly due to increases in fuel and energy prices and general price increases, all due to the depreciation of the rand. 70 The IMF expects the inflation rate to decrease to around 5% from 2016 to 2018.71 The historic and present inflation rate is lower than those of Kenya and Nigeria.72 (See Table 2.4 and Figure 2.5.) Table 2.4: Regional comparison: Inflation rate (%) (2000–2012) and projected (2013–2018)

2000

2005

2010

2012

2013

2014

2016

2018

South Africa

5.34

3.40

4.26

5.41

5.85

5.50

5.00

5.00

Kenya

9.98

10.31

3.96

9.38

5.38

5.00

5.00

5.00

Nigeria

6.93

17.86

13.72

12.22

9.88

8.19

7.00

7.00

5.07

6.98

4.47

6.45

6.90

6.27

5.55

5.49

Sub–Saharan Africa

Sources: 2000–2012 data: World Bank, 2013.73 2013–2018 data: International Monetary Fund (IMF), 2013.74

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African Human Capital and Labour Report: SOUTH AFRICA

20.00 18.00 16.00

Inflation rate (%)

14.00

South Africa

12.00

Kenya

10.00

Nigeria

8.00

Sub-Saharan Africa

6.00 4.00 2.00 0.00 2000

2005

2010

2012

2013

2014

2016

2018

Year

Sources: 2000–2012 data: World Bank, 2013.75 2013–2018 data: International Monetary Fund (IMF), 2013.76

Figure 2.5: Regional comparison: Inflation rate (%) (2000–2012) and projected (2013–2018)

2.1.6. Exchange Rate The South African economy is significantly open with a highly liquid currency. This makes the South African Rand (ZAR) sensitive towards international shocks and trends.77 The weak economic fundamentals, i.e. high negative balance on the trade and current account, as well as a high deficit on the national budget, make the currency vulnerable towards negative international sentiment.78 Against that background, the ZAR depreciated more than 25% over the last 18 months against the USD, Pound Sterling/British Pounds (GBP), as well as a general basket of major currencies.79 The exchange rate is USD 1= ZAR 10.78 (July 2014).80

2.2. Country Strategic Framework The South African economy has made some significant strides during the last 20 years since the first democratic elections. However, there are still various challenges ahead, as confirmed by the World Bank. Below follows an extract from the World Bank’s overview of the South African economy in 2013: 81 A sustained record of macroeconomic prudence and a supportive global environment enabled South Arica’s grow domestic product (GDP) to grow at a steady pace for the decade up to the global financial shock of 2008 – 2009. The National Treasury played an essential role in improvements in the public budget management system and efforts to restore the macro fundamentals. Fiscal balances consistently improved, causing central government gross debt to fall from around 50% of GDP in FY 1994/95 to 40% today. At the heart of the fiscal achievements

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African Human Capital and Labour Report: SOUTH AFRICA

were dramatic improvements in revenue collection by the South African Revenue Services (SARS) and disciplined spending choices. Revenue collection quadrupled and the number of taxpayers more than doubled between 1996 and 2007. Pro–poor orientation of public spending has contributed to improved social development indicators in a range of areas. Millennium Development Goals (MDG) on primary education, gender, several health indicators and environmental sustainability are likely to be achieved. Social grants expenditure and the number of beneficiaries have quadrupled since 1994. Social insurance programs including state old–age pensions, child support grants, conditional grants for school feeding and early childhood development and disability grants, currently cover around 16 million people and, at 3.5% of GDP, are more than twice the median spending among developing economies. These programs, managed by the South African Social Security Agency (SASSA), are well targeted and provide income relief for the poor. Much has also been achieved in the provision of social infrastructure and environmental management over the last 19 years. Capital spending has supported the construction of 56,000 new classrooms and 1,700 new clinics, as well as their access to basic utility services. In addition, approximately two million free housing units have been constructed for low–income families. Household electrification has expanded substantially, with 73% of households electrified by 2009; and potable water supply and basic sanitation services were provided to additional nine million and 6,4 million people, respectively, during the same time period. Investment was also directed to the construction, rehabilitation and maintenance of 6,000 km of national roads and 15,000 km of provincial roads. On the environment front, South Africa is a global leader in biodiversity conservation and wildlife management and has in place a first–rate network of protected areas making it an ecotourism destination of choice. Key Development Challenges Despite the notable accomplishments, South Africa’s economic transformation agenda remains incomplete. A range of enduring legacy issues from the apartheid system continues to undermine economic efficiency and job creation. The limited progress since 1994 in lifting the living standards of the majority and reducing the income inequality has put the social contract under pressure and has grown into an open public debate. Service delivery protests by underserved groups suggest that parts of the population have become frustrated and disillusioned with the pace of reform, the poor quality of public health, education and infrastructure services, and modest job growth prospects. Wildcat strikes in the mining, energy, transport and farming sectors have put into question labour and business relations in the country. South Africa remains a dual economy with one of the highest inequality rates in the world, perpetuating inequality and exclusion. Spatially, an advanced, modern urban economy coexists in sharp contrast with the socioeconomic poverty of disadvantaged townships, informal settlements and rural areas. With an income Gini of around 0.70 in 2008 and consumption Gini of 0.63 in 2009, the top decile of the population accounts for 58% of the country’s income, while the bottom decile accounts for 0.5% and the bottom half less than eight percent. Land distribution is one of the most unequal in the world, with 55,000 white farmers owning 85% of the agricultural land. Despite South Africa’s sophisticated financial sector, financial services do not adequately reach the poorer segments of the economy – only around 28% of adult South Africans have access to credit – stifling entrepreneurship and growth.

African Human Capital and Labour Report: SOUTH AFRICA

With a saturated growth potential for the advanced economy, faster growth would largely come from the less–developed economy, which may have the potential to take off in the same way that the emerging market economies did in mid–1990s. Even though economic growth and rising social welfare payments have made a dent into poverty levels, large pockets of poverty remain deeply entrenched, mostly among the black population in townships and informal settlements. The unresolved set of complex economic challenges has locked South Africa into a low-level equilibrium of low growth, persistent poverty and widespread exclusion and unemployment. The required structural change to break–out of this state will have to come from investment in employment–intensive growth, tackling the unemployment and education challenges together and improving the policy coordination and implementation capacity of the state. Shifting South Africa’s developmental trajectory to a new frontier and inclusive growth will require the active participation of all citizens. Although many of the required policy actions are known to the policy– makers, implementation of these has been hampered by a lack of broad political consensus and the “deficit in trust between business, labour and government” (NDP 2012). This need for a new trajectory of growth is also underscored by the recent sovereign rating downgrade by several international ratings agencies, which raises concerns about the Government’s ability to maintain stability and resolve internal conflicts.

The South African government is well aware of the existing and future economic and societal challenges. In response to this, the National Development Plan (NDP) 2030 was developed.82 Here are the main objectives of the NDP 2030, which can also be viewed online at: http://www.npconline. co.za/pebble.asp?relid=25 The National Development Plan83 Overall Objectives by 2030 •

Eliminate income poverty – reduce the proportion of households with a monthly income below R419 per person (in 2009 prices) from 39% to zero %.

•

Reduce inequality – the Gini coefficient should fall from 0.69 to 0.6.

Enabling milestones •

Increase employment from 13 million in 2010 to 24 million in 2030.

•

Raise per capita income from R50,000 in 2010 to R120,000 by 2030.

•

Increase the share of national income of the bottom 40% from 6% to 10%.

•

Establish a competitive base of infrastructure, human resources and regulatory frameworks.

•

Ensure that skilled, technical, professional and managerial posts better reflect the country’s racial, gender and disability makeup.

•

Broaden ownership of assets to historically disadvantaged groups.

•

Increase the quality of education so that all children have at least two years of preschool education and all children in grade 3 can read and write.

•

Provide affordable access to quality healthcare while promoting health and wellbeing.

•

Establish effective, safe and affordable public transport.

19

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African Human Capital and Labour Report: SOUTH AFRICA

•

Produce sufficient energy to support industry at competitive prices, ensuring access for poor households, while reducing carbon emissions per unit of power by about one–third.

•

Ensure that all South Africans have access to clean running water in their homes.

•

Make high–speed broadband internet universally available at competitive prices.

•

Realise a food trade surplus, with one–third produced by small–scale farmers or households.

•

Ensure household food and nutrition security.

•

Entrench a social security system covering all working people, with social protection for the poor and other groups in need, such as children and people with disabilities.

•

Realise a developmental, capable and ethical state that treats citizens with dignity.

•

Ensure that all people live safely, with an independent and fair criminal justice system.

•

Broaden social cohesion and unity while redressing the inequities of the past.

•

Play a leading role in continental development, economic integration and human rights.

Critical actions (i)

A social compact to reduce poverty and inequality, and raise employment and investment.

(ii) A strategy to address poverty and its impact by broadening access to employment, strengthening the social wage, improving public transport and raising rural incomes. (iii) Steps by the state to professionalise the public service, strengthen accountability, improve coordination and prosecute corruption. (iv) Boost private investment in labour–intensive areas, competitiveness and exports, with adjustments to lower the risk of hiring younger workers. (v) An education accountability chain, with lines of responsibility from state to classroom. (vi) In national health insurance, with a focus on upgrading public health facilities, producing more health professionals and reducing the relative cost of private healthcare. (vii) Public infrastructure investment at 10% of gross domestic product (GDP), financed through tariffs, public–private partnerships, taxes and loans and focused on transport, energy and water. (viii) Interventions to ensure environmental sustainability and resilience to future shocks. (ix) New spatial norms and standards – densifying cities, improving transport, locating jobs where people live, upgrading informal settlements and fixing housing market gaps. (x) Reduce crime by strengthening criminal justice and improving community environments.

2.3. Competitiveness and Ease of Doing Business 2.3.1. South Africa’s Competitiveness South Africa ranked 52 of 142 countries in the 2013 The Global Competitiveness Report 2013-2014. 84 That is below countries such as Turkey (43rd) and Brazil (48th), but the highest in Africa above Mauritius (54th) and Rwanda (63rd).85 The ranking is also better than Kenya (106th) and Nigeria (115th).86 The indicators in which the country perform best, include: “financial market development” (3rd in the world) and “market size” (25th). The worst indicators are “health and primary education” (132nd) and “labour market efficiency” (113th).87

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African Human Capital and Labour Report: SOUTH AFRICA

Table 2.5: The Global Competitiveness position of South Africa and selected countries (2012–2013)

Country

GCI 2012–2013 rank

GCI 2012–2013 Score

Turkey

43

4.5

Brazil

48

4.4

South Africa

52

4.4

Mauritius

54

4.4

Rwanda

63

4.2

Vietnam

75

4.1

Seychelles

76

4.1

Botswana

79

4.1

Namibia

92

3.9

Zambia

102

3.8

Kenya

106

3.7

Nigeria

115

3.7

Tanzania

115

3.7

Source: World Economic Forum. 2013.88

2.3.2. Ease of Doing Business According to the International Finance Corporation (IFC) & the World Bank’s Ease of Doing Business Index, South Africa ranks 41st in the world and 3rd in Africa behind Mauritius and Botswana.89 (See Table 2.6.) The country scores high in terms of “protecting investors”, “dealing with construction permits”, “paying taxes” and “getting credit”. The country scores worse in terms of “trading across borders” and “getting electricity”.90 In addition, according to The Africa Competitiveness Report 2013, respondents indicated the following five factors as being the most problematic for doing business in the country: 91 1. Inadequately educated workforce 2. Restrictive labour regulations 3. Inefficient government bureaucracy 4. Inadequate supply of infrastructure 5. Corruption.

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African Human Capital and Labour Report: SOUTH AFRICA

Table 2.6: Ease of Doing Business Index for South Africa and selected countries (2012)

Sub–Saharan Africa rank

Economy

Ease of Doing Business Rank

1

Mauritius

20

2

Rwanda

32

3

South Africa

41

4

Botswana

56

5

Ghana

67

N/A

Turkey

69

6

Seychelles

80

7

Zambia

83

N/A

Vietnam

99

N/A

Brazil

116

12

Kenya

129

20

Nigeria

147

Source: IFC & World Bank, 2013.92

2.4. Broad–Based Black Economic Empowerment Broad–Based Black Economic Empowerment (BBBEE), has been introduced by the new South African Government after 1994 to redress imbalances of the past. 93 BBBEE codes exist for different industries, such as Mining; Media, Information and Communications Technology (MICT); the Chemical Services industry and the Financial industry. Only companies that are South African-owned need to comply with BBBEE codes – companies whose holding company is in another country are exempt from complying. The levels of compliance are rated as Level 1 (most compliant) to Level 9 (zero compliance). Only South African National Accreditation System (SANAS) accredited rating agents may rate a company’s compliance to the BBBEE codes and elements.94 Additionally, businesses or companies of different sizes comply with different standards, i.e.: 95 •

Businesses/companies with an annual turnover of ZAR 5 million or less are exempt from complying, and are categorised as Exempt Micro Enterprises (EMEs). EMEs automatically qualify for a Level 4 BBBEE compliance if ownership is all White; and qualify for a Level 3 compliance if ownership includes a Black person or persons.

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African Human Capital and Labour Report: SOUTH AFRICA

•

Businesses/companies with an annual turnover of ZAR 5 million to ZAR 35 million can choose any four out of seven elements of the BBBEE codes with which they have a high level of compliancy to be rated on. These enterprises are categorised as Qualifying Small Enterprises (QSEs).

•

Businesses/companies with an annual turnover in excess of ZAR 35 million have to comply with seven elements of the BBBEE codes, and are categorised as Generic Enterprises. Companies are rated differently by industry, as stated in the introduction above.

The seven elements of the BBBEE codes involve the following: 96 •

Ownership – direct empowerment – evaluating the ownership of an enterprise according to the number of Black persons with ownership in the enterprise. Black females in ownership earn higher points than Black males in ownership.

•

Economic Empowerment (BBBEE), has been

Management Control – direct empowerment

introduced by the

– evaluating the management levels in an

new South African

enterprise for the number of Black persons who

•

Broad–Based Black

have a say in the business. Again, Black females

Government after 1994

earn higher points than Black males.

to redress imbalances

Employment Equity – direct empowerment

of the past.

– evaluating how representative of the South African population an enterprise’s labour force is, and their job grade levels in the company, i.e. how much influence Black people have in the

business. Again, Black females earn higher points than Black males. •

Training and Development – direct empowerment – evaluating which population groups in the enterprise benefit from training and development initiatives, be they formally recognised courses at tertiary institutions; continued professional development; on-the-job training or informal employee development programmes held in the business. Again, Black females who benefit from training and development initiatives earn higher points than Black males.

•

Preferential Procurement – indirect empowerment – evaluating whether an enterprise’s suppliers are BBBEE compliant or not.

•

Enterprise Development – indirect empowerment – evaluating whether an enterprise and its employees extend a helping hand to entrepreneurial ventures of Black people. This includes favourable payment terms; financial or tangible investments in such enterprises; assistance in the form of shared expertise or offering the entrepreneur a space on their premises from which they conduct their business operations.

•

Socio-Economic Investment – indirect empowerment – evaluating whether an enterprise invests back into the community; or reaches out to less privileged communities, individuals or groups. (Also known as Corporate Social Investment).

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African Human Capital and Labour Report: SOUTH AFRICA

For more specific information on the weighting of the different elements; how a company should prepare for an annual BBBEE audit; acceptable practices, etc., visit BEE.CO.ZA – a comprehensive online guide on BBBEE matters. Their website address is: http://www.bee.co.za/Default.aspx. The site also provides a listing of SANAS-accredited verification agents that companies can contact for the issuing of BEE certificates.

2.5. Largest Companies and Government Enterprises South Africa’s corporations are huge compared to their African counterparts; therefore, the top 10 South African companies according to The Africa Report (February, 2014) are amongst the top 12 in Africa, according to 2012 turnover figures. 97 The top 10 ranked South African companies are: •

Sasol www.sasol.com

•

MTN Group www.mtn.com

•

Bidvest Group www.bidvest.com

•

ESKOM www.eskom.co.za

•

SANLAM www.sanlam.co.za

•

ShopRite Holdings www.shoprite.com

•

Imperial Holdings www.imperial.co.za

•

Steinhoff International Holdings www.steinhoffinternational.com

•

Vodacom Group www.vodacom.com

•

Massmart Holdings www.massmart.co.za

The top 10 companies in South Africa as ranked by the Financial Mail are: •

BHP Billiton Plc. www.bhpbilliton.com

•

Anglo American Plc. www.angloamerican.com

•

British American Tobacco Plc. www.bat.com

•

Sasol www.sasol.com

•

Sanlam www.sanlam.co.za

•

SABMiller Plc. www.sabmiller.com

•

The Bidvest Group www.bidvest.co.za

•

MTN Group www.mtn.com

•

Standard Bank Group www.standardbank.co.za

•

Compagnie Fin Richemont www.richemont.com

In addition, the country has a number of large public enterprises such as: •

Transnet www.transnet.net

•

South African Airways www.flysaa.com

•

Denel www.denel.co.za

•

Safcol www.safcol.co.za

•

ESKOM www.eskom.co.za

•

Metrorail www.metrorail.co.za

African Human Capital and Labour Report: SOUTH AFRICA

2.6. Foreign Aid to South Africa Foreign aid to South Africa is very low as a percentage of the economy. In 2012 a total amount of USD 1 billion was received, mainly from the United States (USD 535 million), EU institutions (USD 287 million), France (USD 149 million) and Germany (USD 101 million).98

2.7. Foreign Investment in South Africa According to Reuters, FDI inflows into South Africa more than doubled to USD 10.3 billion in 2013.99 That is almost one-fifth of the total inflow to the continent, and this is despite recent and on-going labour unrest in various sectors. Most of the rise in FDI inflows to South Africa was due to greenfield, or new investment, particularly in the consumer goods sector. Other African countries like Nigeria and Ghana saw a decrease in 2013.100

2.8. Summary The IMF is of the opinion that South Africa faces low growth, widespread unemployment and a high dependence on foreign capital inflows.101 Unlocking the country’s economic potential is critical, which would need structural reforms in order to achieve this. The government’s National Development Plan (NDP) is a blueprint for the structural reforms that will facilitate high and inclusive private sector-led growth; and a consensus around the plan and its implementation would be crucial to achieve the needed higher growth rates.102 Reforms need to address the following key bottlenecks:103 •

Improve education outcomes. Many labour market entrants do not have the basic skills sought by potential employers.

•

Reduce transport costs for workers and job seekers that arise from long distances to urban centres and jobs.

•

Enhance competition in product markets to promote innovation and dynamism – the very source of growth and job creation in other countries.

•

Ensure that outsiders have a voice in collective bargaining between large established firms and labour unions, so that wage costs allow for job creation by small or new businesses.

Implementing the National Development Plan will take time, but can start with small and individual reforms that tackle the most binding constraints.104 These views were confirmed by the Financial Mail (FM):105

25

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African Human Capital and Labour Report: SOUTH AFRICA

What South Africa really needs is movement on the NDP’s more controversial elements, such as labour market and regulatory reform, to ignite a boom in small business creation and jack up SA’s growth rate. Hoping for growth while trying to hold the line on infrastructure spending is not a strategy that is likely to deliver progress in line with treasury’s debt forecasts. Something more has to be done because on current policies, SA’s creditworthiness will keep deteriorating. Either government is going to make a far greater effort to implement sound macro policies, both to cut the fat and raise the growth rate, or concerns over SA’s fiscal and social stability will continue to mount.

The Financial Mail concludes: 106

The situation is not totally dire, however the economy will still grow this year and the weak rand will provide a huge boost to certain industries. SA is not facing the threat of massive 2009 – type job shedding, just the kind of grinding underperformance that is in danger of becoming the norm. And for that, in the current global environment, SA is likely to be judged harshly.

2.9. Implications, Challenges and Recommendations 2.9.1. Higher Economic Growth South Africa needs to unlock the country’s real economic potential. Herein lies tremendous opportunities and challenges, that can only be achieved by structural reforms in various areas, such as labour market inflexibility, unblocking infrastructure bottlenecks like electricity provision, and upgrading the education system. Also, high quality service delivery needs to be fast-tracked. The main challenge, therefore, is job creation. In short, it is about the implementation of the NDP.

2.9.2. Private Sector Creating Jobs Policy formulators should accept that business creates the bulk of jobs. A government can only provide jobs up to a point. The size of the South African Government’s wage bill indicates that further growth in employment creation within the public sector is actually damaging the economy. What’s to be done? Privatisation should be considered.

African Human Capital and Labour Report: SOUTH AFRICA

Instead of subsidising and bailing out organisations such as South African Airways, the company becomes a tax payer. The receipts from selling-off state assets open various possibilities: for instance, the state has capital to reduce debt or increase infrastructure investment or reduce taxes. At the same time employees can receive a sizeable chunk of the company in shares. In doing so, the vast inequalities in income are also addressed. The same principle applies across a broad spectrum of public enterprises, of which the Airports Company of South Africa (ACSA) is a great success story. 107 Furthermore, the government should embrace the private sector (Business) and create a conducive environment for investment and growth, and, in doing so, create jobs.108 Trade unions and the business sector also have important roles to play. (See Chapter 5 – Labour Market for more on these aspects).

2.9.3. More Equal Distribution of Resources and Wealth The achievement in service delivery, education, healthcare, electricity, water, etc. to the previously disadvantaged population is substantial. Despite that, the country is still among the most unequal in terms of wealth distribution in the world and has about 25% unemployment.109 This situation increases political and investors risk. However, it is not only up to the government to rectify this situation: employers can also play a role in sharing wealth creation. Employee share schemes can be considered. More inclusive governing structures can be created, for example, have unions represented at board levels similar to the German model. Social compacts in an industry/region can lead to a greater focus on poverty alleviation. Equipping the workforce with more skills can also increase the national Human Capital Stock. This requires skills development and training beyond the immediate needs of an organisation, a typical example being financial literacy training for all employees.

2.9.4. Improve International Competitiveness and Ease of Doing Business With an international ranking of 52 on the Global Competitiveness Report 2013–2014, the country needs to urgently address the main areas of concern, i.e. the education system, restrictive labour regulations/ legislation, infrastructure bottle necks and corruption. The same urgency applies to “ease of doing business”, where the country is ranked 41th in the world and the 3rd in Africa.

2.9.5. The National Development Plan 2030 The NDP 2030, if successfully implemented, should eliminate most of the constraints highlighted by various institutions such as the IMF, the World Bank and the WEF. In this regard the government, business sector, unions and civil society need to work shoulder to shoulder if the ambitious goals are to be reached. A process needs to be formulated whereby these institutions can reach overall agreement on implementation strategies.

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African Human Capital and Labour Report: SOUTH AFRICA

3

Socio-Demographic Indicators

The total population in South Africa has increased steadily since 1990 to 2012. In 1990 the population was 35.2 million and by 2014 the population had increased to 53 million, an increase of 51% since 1990.

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African Human Capital and Labour Report: SOUTH AFRICA

3. Socio-Demographic Analyses

3.1. Population The total population in South Africa has increased steadily since 1990 to 2012. In 1990 the population was 35.2 million110 and by 2014 the population had increased to 53 million,111 an increase of 51% since 1990. The population median age in 2012 was 25.7 years, according to the World Health Organization (WHO).112

Millions

(See Figure 3.1 below). 60

50

Population size

40

30

Population, total 20

10

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

0 Year

Sources: 1990–2012 data: World Bank, 2013.113 2013–2014 data: Statistics South Africa, 2014.114

Figure 3.1: Population, total

The total population in 2013 was considerably lower

South Africa’s population

than Nigeria (169 million) but about 23% higher than

consists of four major

Kenya (43 million).115 South Africa’s population consists of four major population groups, i.e. African/Blacks; Coloureds, Whites; and Indians/Asians. See Table 3.1 and Figure 3.2 for the breakdown by major population groups.

population groups, i.e. African/Blacks; Coloureds, Whites; and Indians/Asians.

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African Human Capital and Labour Report: SOUTH AFRICA

Table 3.1: Country projection by population groups (000s) (2013)

Population Group

2013

% of total

African/Blacks

42,284

80%

Coloured

4,766

9%

White

4,602

9%

Asian/Indian

1,329

3%

Total

52,982

100%

Source: Statistics South Africa. 2014.116

Country Projection Population Group 2% 9%

9%

African/Black Coloured White Asian/Indian 80%

Source: Statistics South Africa. 2014.117

Figure 3.2: Country projection by population group (%) (2013)

The distribution of the population across the nine provinces in 2013 is indicated in Table 3.2 and Figure 3.3. Gauteng has the largest share of people, i.e. 12.7 million (24% of the total), followed by KwaZulu-Natal, 10.45 million (19.7%). The least populated province is the Northern Cape, with 1.16 million people (2.2%) of the total.118

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African Human Capital and Labour Report: SOUTH AFRICA

Table 3.2: Percentage distribution of population by province (000s) (2013)

Province

Capital city

Population total (000s)

% Share of population

Gauteng

Johannesburg

12,728

24%

KwaZulu-Natal

Pietermaritzburg

10,457

19.70%

Eastern Cape

Bhisho

6,620

12.50%

Western Cape

Cape Town

6,017

11.40%

Limpopo

Polokwane

5,518

10.40%

Mpumalanga

Mbombela

4,128

7.80%

North West

Mahikeng

3,598

6.80%

Free State

Bloemfontein

2,753

5.20%

Northern Cape

Kimberley

1,163

2.20%

Total

South Africa

52,982

100%

Source: The South Africa Government, 2013. 119

Population by Province 5%

Gauteng

2%

7%

Kwa-Zulu Natal

24%

Eastern Cape

8%

Western Cape Limpopo 10%

Mpumalanga 20%

North West Free State

11%

13%

Source: South Africa Government, 2013.120

Figure 3.3: Distribution of population by province (2013)

Northern Cape

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African Human Capital and Labour Report: SOUTH AFRICA

The population growth has slowed down over the period 1990 to 2012: from 2.04% in 1990 to 1.18% in 2012 (see Figure 3.4). The population growth of South Africa for 2012 was lower than for Kenya (2.7%), Nigeria (2.79%), and sub-Saharan Africa (2.7%).121 (See Figure 3.5.) This sharp decline in the population growth rate around 2000 can be attributed to: HIV/AIDS, and a combination of urbanisation, growth in the middle class, education levels rising, and an emphasis on women development and family planning. 3.00

Annual growth rate (%)

2.50

2.00

Population growth (annual %)

1.50

1.00

0.50

0.00 1990

1995

2000 Year

2005

2010

Source: World Bank, 2013.122

Figure 3.4: Population growth (annual percentage) 3.00

Annual growth rate (%)

2.50

2.00

South Africa Kenya

1.50

Nigeria Sub-Saharan Africa

1.00

0.50

0.00 2012 Year

Source: World Bank, 2013. 123

Figure 3.5: Regional comparison: Population growth (annual %) ( 2012)

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African Human Capital and Labour Report: SOUTH AFRICA

Mortality rates reached a peak during 2008 with 526 and 502 per 1,000 males and females respectively.124 This was mainly due to the high levels of HIV/AIDS. Mortality rates for adult males were 352 per 1,000 males in 1990, and for females, 231 per 1,000 females; but in 2011 the mortality rates were 479 and 435 for every 1,000 males and females respectively. Mortality rates have always been higher for males than females, and this trend continues to date. (See Figure 3.6 below.) 600

Number of deaths recorded per 1,000 adults

500

400

Mortality rate, adult, male (per 1,000 male adults

300

Mortality rate,

adult, female (per 1,000 female adults)

200

100

0 1990

1995

2000 Year

2005

2010

Source: World Bank, 2013. 125

Figure 3.6: Mortality rate, adults (per 1,000 adults)

3.1.1. Population Age Breakdown The population age breakdown for the period 1990 to 2012 has shown the following trends: The 0–14 year population has steadily decreased in proportion to the total since 1990: from 38.94%126 to 29.17% in 2013.127 The 15–64 year population has shown an increase of 14.4 million over the period 1990 to 2013: from 57.87%128 to 65.66%, i.e. 34.8 million.129 The 65 year and above population has also increased proportionally, from 3.19% in 1990130 to 5.17% in 2013 (2.74 million).131 (See Tables 3.3, 3.4 and 3.5 below.) Table 3.3: Population age breakdown (000s) (1990–2013)

Age group

1990

2000

2010

2011

2012

2013

Population ages 0–14 (000s)

13,705

14,509

14,853

14,976

15,114

15,455

Population ages 15–64 (000s)

20,371

27,981

32,526

32,908

33,289

34,790

1,124

1,510

2,612

2,703

2,786

2,737

Population ages 65 and above (000s) Sources: 1990–2012 data: World Bank, 2013.132 2013 data: Statistics South Africa. 2014.133

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African Human Capital and Labour Report: SOUTH AFRICA

Table 3.4: Population age breakdown (% of total population)

Age group

1990

2000

2010

2011

2012

2013

Population ages 0–14 (% of total)

38.94

32.98

29.71

29.60

29.53

29.17

Population ages 15–64 (% of total)

57.87

63.59

65.06

65.05

65.03

65.66

3.19

3.43

5.23

5.34

5.44

5.17

Population ages 65 and above (% of total) Sources: 1990–2012 data: World Bank, 2013.134 2013 data: Statistics South Africa. 2014.135

Table 3.5: Population age breakdown by population group (000s) (2005–2013)

Population group

Age group

2005

2010

2013

African/Blacks

0–14 yrs

12,904

13,012

13,047

15–64 yrs

23,100

25,729

27,457

65+ yrs

1,363

1,604

1,780

Total African/Blacks

All ages

37,367

40,345

42,284

Coloured

0–14 yrs

1,338

1,323

1,299

15–64 yrs

2,831

3,093

3,242

65+ yrs

162

197

225

Total Coloured

All ages

4,331

4,613

4,766

Indian/Asian

0–14 yrs

294

287

288

15–64 yrs

837

912

951

65+ yrs

61

78

90

Total Indian/Asian

All ages

1,192

1,277

1,329

White

0–14 yrs

929

856

821

3,323

3,224

3,140

65+ yrs

497

581

642

All ages

4,749

4,661

4,603

15–64 yrs

Total White

Source: Statistics South Africa, 2013.136

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African Human Capital and Labour Report: SOUTH AFRICA

From Table 3.5 it is evident that for the age groups 0–14 years, all the population groups are decreasing in numbers except for Africans/Blacks over the 2005–2013 period (see Figure 3.7 below). The 15–64 years age groups are showing increases for all the population groups, except for Whites over the same period; for African/Blacks a 19% increase; Coloureds 14.5% increase; Indians/Asians 13.6% increase, but for Whites a 5.5% decrease (see Figure 3.8 below). The 65 years and above age group showed increases across all the population groups over the 2005–2013 period (see Figure 3.9). Overall, the African/Black population group increased by 13.2% since 2005, but the Whites decreased by 3.1% over the same period, mainly due to immigration trends. 14,000 12,000

Actual numbers

10,000 8,000

2005

6,000

2013 4,000 2,000 0 0–14 yrs African/Black

0–14 yrs

0–14 yrs

Coloured Indian/Asian Population groups

0–14 yrs White

Source: Statistics South Africa, 2013.137

Figure 3.7: 0–14 years age group by population groups (000s) (2005 & 2013) 30,000

25,000

Actual numbers

20,000

15,000

2005 2013

10,000

5,000

0 15–64 yrs African Black

15–64 yrs

15–64 yrs

Coloured Indian/Asian Population groups

Source: Statistics South Africa, 2013.138

Figure 3.8: 15–64 years age group by population group (000s) (2005 & 2013)

15–64 yrs White

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African Human Capital and Labour Report: SOUTH AFRICA

2,000 1,800 1,600

Actual numbers

1,400 1,200 1,000

2005

800

2013

600 400 200 0 65+ yrs

65+ yrs

65+ yrs

65+ yrs

African/Black

Coloured

Indian Asian

White

Population groups

Source: Statistics South Africa, 2013.139

Figure 3.9: 65+ years group by population groups (000s) (2005 & 2013)

It is clear from Tables 3.3, 3.4 and 3.5 above that the population average is getting older. This has advantages in term of social delivery, education, healthcare, etc. Table 3.6 below indicates the distribution of the population by five–year age groups and gender for 2013, according to Statistics South Africa.140 See Figure 3.10 for the population pyramid (2013 data). Table 3.6: Distribution of population by 5–yr age groups and gender (000s) (2013)

Age group in 5 yr brackets

Male

Female

Total

0–4 yrs

2,667

2,625

5,292

5–9 yrs

2,556

2,535

5,091

10–14 yrs

2,538

2,533

5,071

15–19 yrs

2,588

2,581

5,169

20–24 yrs

2,540

2,495

5,035

25–29 yrs

2,407

2,359

4,766

30–34 yrs

2,226

2,174

4,400

35–39 yrs

1,960

1,953

3,913

40–44 yrs

1,595

1,729

3,324

45–49 yrs

1,230

1,382

2,612

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African Human Capital and Labour Report: SOUTH AFRICA

Age group in 5 yr brackets

Male

Female

Total

50–54 yrs

1,066

1,244

2,310

55–59 yrs

849

1,003

1,852

60–64 yrs

628

782

1,410

65–69 yrs

424

705

1,129

70–74 yrs

278

500

778

75–79 yrs

164

318

482

80+ yrs

107

240

347

Source: Statistics South Africa, 2013.141

80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49

Male

40-44 35-39

Female

30-34 25-29 20-24 15-19 10-14 5-9 0-4 3

2

1

0

1

2

3 Millions

Source: Statistics South Africa. 2014. 142

Figure 3.10: Population age breakdown (2013)

It should be noted that the 0–4 years age group in 2011 was again significantly higher than the five- year group from 5–9 years (see Table 3.6 above) and 23.7% higher than the 10–14 years age group. The 0–14 age population in South Africa as a percentage of the total population (29.53% in 2012), has followed a similar decline in percentage as seen in the world. As a whole, it was substantially lower than Nigeria’s (44.22%); Kenya’s (42.37%); and sub-Saharan Africa’s (43.18%) in 2012.143 (See Figure 3.11.)

39

African Human Capital and Labour Report: SOUTH AFRICA

55

Percentage of total population

50

45

South Africa Kenya

40

Nigeria Sub-Saharan Africa

35

World

30

25

20 1990

1995

2000 Year

2005

2010

Source: World Bank, 2013.144

Figure 3.11: Regional comparison: Population ages 0–14 (percentage of total)

The 15–64 age population in South Africa as a percentage of the total population (65.03%), was higher than Kenya’s 15–64 age population (54.99%); Nigeria’s (53.05%) and sub–Saharan Africa’s (53.73%).145 (See Figure 3.12 below.) 75

Percentage of total population

70

65

South Africa Kenya

60

Nigeria Sub-Saharan Africa

55

World

50

45

40 1990

1995

2000 Year

2005

2010

Source: World Bank, 2013. 146

Figure 3.12: Regional comparison: Population ages 15–64 (percentage of total)

40

African Human Capital and Labour Report: SOUTH AFRICA

The 65 and above age population as a percentage of the South African population has increased significantly over the period 1990 to 2012. In 1990, 3.9% of the population was over the age of 65 and in 2012 this percentage increased to 5.44%, an increase of 39% since 1990. This increase is much steeper than Kenya (2.164%), Nigeria (2.73%), and sub–Saharan Africa (1%), as well as Africa’s average (3.1%).147 (See Figure 3.13 below.)

8

7

Percentage of total population

6

South Africa 5

Kenya Nigeria

4

Sub-Saharan Africa

3

World 2

1

0 1990

1995

2000

2005

2010

Year

Source: World Bank, 2013. 148

Figure 3.13: Regional comparison: Population ages 65 and above (percentage of total)

3.1.2. Life Expectancy at Birth The life expectancy at birth of South Africans has weakened from 62 years (1990) to 52 years (2005), a decline of 16% since 1990. However, life expectancy has since improved to 55 years (2011). Females’ life expectancy was eight years longer than that of males in 1990, three years longer than males at the lowest level in 2005, and is currently four years longer than males’ life expectancy (2011).149 Life expectancy declined as a result of the high prevalence of HIV/AIDS and TB affecting the population. (See Figure 3.14.)

The life expectancy at birth of South Africans has improved to 55 years (2011).

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African Human Capital and Labour Report: SOUTH AFRICA

80 75

Life expectancy at birth

70

Life expectancy at

65

birth, male (years) Life expectancy at birth, female (years)

60 55

Life expectancy at birth, total (years)

50 45 40

Year

Source: World Bank, 2013. 150

Figure 3.14: Life expectancy at birth, total (years)

For South Africans in 2011, life expectancy at birth (55 years) was higher than Nigerians’ 52 years; and lower than sub-Saharan Africa’s 56 years, and Kenya’s life expectancy of 60 years.151 (See Figure 3.15.) 65

Life expectancy at birth

60

South Africa

55

Kenya Nigeria

50

Sub-Saharan Africa

45

40 1990

1995

2000 Year

2005

Source: World Bank, 2013. 152

Figure 3.15: Regional comparison: Life expectancy at birth, total (years)

2010

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African Human Capital and Labour Report: SOUTH AFRICA

3.1.3. Fertility Rates Fertility rates of South African women have declined steadily over the period 1990 to 2012, in line with the trend seen in the rest of the world. In 1990 fertility rates in South Africa were 3.66 children per woman compared with Kenya (6); Nigeria (6.49) and sub-Saharan Africa (6.36).153 In 2011 the fertility rate in South Africa (2.44) was lower than that of Kenya (4.54); Nigeria (6); and sub–Saharan Africa (5.18).154 The decrease in South Africa was considerable, namely 33%, whereas Nigeria only decreased by 7.2%. (See Figure 3.16.) 7

Expected number of children per woman

6

5

South Africa

4

Kenya 3

Nigeria

2

Sub-Saharan Africa

1

0 1990

1995

2000 Year

2005

2010

Source: World Bank, 2013. 155

Figure 3.16: Regional comparison: Fertility rates

3.1.4. Population Forecasts to 2030 The National Planning Commission (NPC) projects the population to increase to 58.5 million by 2030, up from 53 million in 2013.156 Fertility rates are projected to decrease to 2.1 children per woman,157 while life expectancy will increase to about 58 years by 2030.158

3.2. Living Standards and Poverty Levels 3.2.1. Human Development Indicators The Human Development Index (HDI), compiled by the UNDP, is a composite index measuring average achievement in three basic dimensions of human development—a long and healthy life, education, and a decent standard of living. For details on how the HDI is calculated, see Technical note 1 at http://hdr.undp.org/en/media/HDR_2013_EN_TechNotes.pdf.159 South Africa is currently ranked under countries of medium human development, and ranks as number 121 of 186 countries, along with countries such as Indonesia, Botswana, Vietnam, Namibia and Morocco.160

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African Human Capital and Labour Report: SOUTH AFRICA

Over the 22 years since 1990 SA’s score increased by only 1%, which is much less than countries such as Kenya (12%), Brazil (24%) and Turkey (26%).161 See Table 3.7 below for a regional comparison with selected countries for the period 1990 to 2012. Table 3.7: Human Development Indicator trends (1990 –2012) HDI rank

Country

1990

2000

2005

2007

2010

2011

2012

1

Norway

0.852

0.922

0.948

0.952

0.952

0.953

0.955

2

Australia

0.880

0.914

0.927

0.931

0.935

0.936

0.938

3

United States

0.878

0.907

0.923

0.929

0.934

0.936

0.937

85

Brazil

0.590

0.669

0.699

0.71

0.726

0.728

0.730

90

Turkey

0.569

0.645

0.684

0.702

0.715

0.72

0.722

121

South Africa

0.621

0.622

0.604

0.609

0.621

0.625

0.629

145

Kenya

0.463

0.447

0.472

0.491

0.511

0.515

0.519

153

Nigeria

0.434

0.448

0.462

0.467

0.471

Source: UNDP, 2013.162

South Africa’s HDI in 2012 was 0.629, which was higher than sub–Saharan Africa (0.475); Nigeria (0.471); and Kenya (0.519).163 (See Figure 3.17.) 0.650

HDI value assigned by the UNDP

0.600

0.550

South Africa Kenya

0.500

Nigeria Sub-Saharan Africa

0.450

0.400

0.350 1990

2000

2005

2007 Year

2010

2011

2012

Source: UNDP, 2013.164

Figure 3.17: Regional comparison: Human Development Index trends (1990–2012)

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African Human Capital and Labour Report: SOUTH AFRICA

3.2.2. The Lived Poverty Index (LPI) The Lived Poverty Index (LPI) is researched and compiled by Afrobarometer.165 The Afrobarometer is compiled by researchers from the Michigan State University in the USA, in co-operation with an affiliated entity in South Africa (Citizen Surveys). The Afrobarometer researchers created an experiential measure of poverty, as they were of the opinion that the core essence of poverty was not well captured by existing measures of reporting poverty and/or living standards. The LPI comprises five key questions, the answers to which indicate the respondents’ experience of poverty in their lives (see Table 3.8). The questions cover whether the respondent(s) have had enough food to eat; access to clean drinking water; access to medicines or medical treatment; cooking fuel; and a cash income in the year preceding the survey. The LPI score is then created by combining the responses to create an average mean LPI score per individual, region or country. The LPI scores range on a five-point scale starting at 0 (no experience of lived poverty) to 4 (constant absence of these basic necessities). The fifth round of survey results (five LPI questions) for 2012 for South Africa is shown in Table 3.8 below: Table 3.8: Afrobarometer Round 5 Survey Results – South Africa (2012) Question

Frequency

Urban

Rural

Averages

Over the past year, how often, if ever, have you or anyone in your family: Gone without enough food to eat? Never

67

56

62

Just once or twice

15

25

20

Several times

11

12

12

Many times

6

5

6

Always

2

1

2

Never

71

41

56

Just once or twice

15

19

17

Several times

9

19

14

Many times

4

12

8

Always

1

8

5

Gone without clean water for home use?

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African Human Capital and Labour Report: SOUTH AFRICA

Question

Frequency

Urban

Rural

Averages

Gone without medicines or medical treatment? Never

67

49

58

Just once or twice

14

23

19

Several times

12

18

15

Many times

5

5

5

Always

2

4

3

Never

69

49

59

Just once or twice

13

24

19

Several times

10

16

13

Many times

5

7

6

Always

2

2

2

Don’t know

1

2

2

Never

49

34

42

Just once or twice

14

24

19

Several times

14

20

17

Many times

12

14

13

9

8

9

Gone without enough fuel to cook food?

Gone without a cash income?

Always Source: Afrobarometer, 2013.166

From the responses it is evident that “cash income”, “clear water for home use”, “lack of medicines and medical treatment” and “enough fuel for cooking” cover the major aspects of deprivation. That is clear from the summary below. The total frequencies for “several times”, “many times” and “always” were in descending order as follows: •

Gone without a cash income? – 39%

•

Gone without clear water for home use? – 27% (rural 39%)

•

Gone without medication or medical treatment? – 23%

•

Gone without enough fuel to cook food? – 21%

•

Gone without enough food to eat? – 20%

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From the results on Table 3.8, it is clear that deprivation is substantially higher in the rural areas than urban areas – almost always the case for African countries.

3.2.3. The Multidimensional Poverty Index (MPI) The UNDP introduced the Multidimensional Poverty Index (MPI) in 2010. It is a composite measure of the percentage of deprivations that the average person would experience if the deprivations of poor households were shared equally across the population. The MPI is the product of the multidimensional poverty headcount (the share of people who are multi-dimensionally poor) and the average number of deprivations that each multidimensionally poor household experiences (the intensity of their poverty). Sources are from various household surveys, including ICF Macro Demographic and Health Surveys, United Nations Children’s Fund Multiple Indicator Cluster Surveys, and the WHO’s World Health Surveys conducted between 2000 and 2010. Data in the tables are those available to the Human Development Report Office as of 15 October 2012, unless otherwise specified.167 Two indicators each are used for education and health, and six are used for the standard of living dimension. All of the indicators needed to construct the MPI for a household are taken from the same household survey. Indicators are weighted, and the deprivation scores are computed for each household in the survey. A cut-off of 33.3%, which is the equivalent of one-third of the weighted indicators, is used to distinguish between the poor and the non-poor. If the household deprivation score is 33.3% or greater, that household and all its members are multi-dimensionally poor. In households with a deprivation score greater than or equal to 20%, but less than 33.3%, the people in that household are vulnerable to or at risk of becoming multidimensionally poor.168 The Multidimensional Poverty Indicators statistics for South Africa (2008 data) is shown in Table 3.9 below. Table 3.9: Multidimensional Poverty Indicators – South Africa (2008)

Multidimensional Poverty Indicator statistics MPI: Multidimensional poverty index (%)

Value

Notes

0.057

MPI: Intensity of deprivation

42.3

MPI: Headcount, percentage of population in multidimensional poverty (% of population)

13.4

MPI: Population living below $1.25 PPP per day (%)

13.8

*

Source: UNDP, 2013.169 * The MPI is the product of the multidimensional poverty headcount and the intensity of deprivation that each multidimensionally poor household experiences. 170

The MPI for South Africa was 0.057, and the intensity of deprivation was 42.3%. Thirteen percent of the population was living in multidimensional poverty; and almost a quarter (22.2%) of the population was vulnerable to becoming multidimensionally poor. Almost 14% of the population was living on an income of USD 1.25 or less per day, which is substantially lower than Kenya (43.4%) and Nigeria (68%).171

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South Africa’s MPI in 2008 was lower than Kenya’s MPI in 2008–2009 (0.229); and Nigeria’s in 2008 (0.310).172 The percentage of the population living in multidimensional poverty in South Africa (13.4%) was lower than in Kenya (47.8%) and in Nigeria (54.1%).173 (See Table 3.10 below for more regional MPI statistics.) Table 3.10: Regional comparison: Multidimensional Poverty Indicator Statistics

Indicator

South Africa

Kenya

Nigeria

Multidimensional Poverty Index Year

2008

2008/2009

2008

Multidimensional Poverty Index Value

0.057

0.229

0.310

13.4

47.8

54.1

42.30

48.00

57.30

22.20

27.40

17.80

13.80

43.40

68.00

Population in multidimensional poverty (%) Population in multidimensional poverty Intensity of deprivation (%) Population vulnerable to poverty (%) 2002–2011 Population below income poverty line – PPP $1.25 a day (%) Source: UNDP, 2013.174

3.3. Income Distribution and Social Grants South Africa’s income distribution as expressed by the Gini Index in 2009 is amongst the highest in the world.175 According to the World Bank, the Gini Index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly expert distribution. Thus a Gini Index of 0 represents perfect equality, while an index of 1 implies perfect inequality. South Africa’s Gini Index was 0.69 in 2011 and Nigeria’s 0.49 in 2010.176 In order to address the high poverty and unemployment levels in the country, the government has introduced a wide ranging social grant system. The South African Social Security Agency (SASSA) provides the following social grants to designated groups: 177 •

Social Relief of Distress

•

Grants-in-Aid

•

Child Support Grant

•

Foster Care Grant

•

Care Dependency Grant

•

War Veteran’s Grant

•

Disability Grant

•

Grants for Older Persons.

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African Human Capital and Labour Report: SOUTH AFRICA

The country’s social security system through social grants increased from ZAR 2.4 million in 1996 to ZAR 16 million in 2013, an increase of 567%. The estimated bill for these grants for the 2013/2014 fiscal year is about 3% of GDP, still lower than the country’s expenditure on other critical services like education and health.178 It is, however, more than twice the median spending of any developing economies.179

3.4. Healthcare Healthcare is an important part of a nation’s human capital, possibly the most important. The Organisation for Economic Co–operation and Development (OECD) states that raising the health of the overall population

The Organisation for

helps a country to grow. According to one estimate, a

Economic Co–operation

country that sees an improvement in life expectancy

and Development (OECD)

of five years – a reflection of rising health levels – will see its economy grow up to 0.5% faster than one

states that raising the

where life expectancies are static.180

health of the overall

This section addresses the population’s general health

population helps a

and provides an overview of illnesses or diseases; the prevalence of TB infections; and those living with HIV/

country to grow.

AIDS; as well as treatment initiatives. The availability of healthcare practitioners in the country will also be discussed.

3.4.1. Infant Deaths The number of newborns dying prematurely every year has decreased substantially from 50,000 in 1990, to 17,000 deaths in 2012. In 2012 the number of infant deaths recorded was 37,000, which is a decrease from the 65,000 deaths recorded for 1990. The number of premature deaths recorded for children under the age of five increased from 22,000 in 1990 to 89,000 in 2005. This number, however, decreased to 50,000 in 2012.181 (See Table 3.11 and Figure 3.18) Table 3.11: Number of deaths recorded under neonates, infants and children under 5 (1990–2012) Age group

1990

1995

2000

2005

2010

2011

2012

Neonates

50,000

47,000

19,000

20,000

19,000

18,000

17,000

Infants

65,000

62,000

51,000

58,000

41,000

39,000

37,000

Children under five

22,000

20,000

74,000

89,000

62,000

54,000

50,000

Source: World Bank, 2013.182

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Thousands

African Human Capital and Labour Report: SOUTH AFRICA

100 90 80

Actual numbers reported

70

Number of neonatal deaths

60 50

Number of infant

40

deaths

30

Number of underfive deaths

20 10 0

Year

Source: World Bank, 2013. 183

Figure 3.18: Deaths recorded under neonates, infant and children under five (1990 to 2012)

3.4.2. Diseases The World Health Organization (WHO) distinguishes between communicable diseases, injuries and noncommunicable diseases. Communicable diseases include common colds, influenza, sexually transmitted diseases, cholera, or malaria. Injuries include bodily harm, wounds or physical damage obtained as a result of accidents at work, traffic accidents, physical abuse by significant others or a person’s own general carelessness. Non-communicable diseases refer to diseases that are acquired through poor hygiene; poor diet, insufficient nutrition or irregular eating patterns; extensive tobacco or drug use; a sedentary lifestyle with little or no physical activity; through genetic mutations that are prone to particular types of diseases; or neurological or psychiatric conditions not directly caused by any one thing. Non–communicable diseases include diabetes, respiratory diseases, congenital anomalies, digestive diseases and more. According to the WHO, non-communicable diseases are a major cause of death throughout the world, and they caution that in a country such as South Africa many of these deaths occur before the age of 60, and could be prevented in many instances through timely detection and appropriate treatment and care.184 The WHO estimated that in 2008 29% of deaths in the South African population were caused by noncommunicable diseases, with cardio-vascular diseases (11%) and cancers (7%) taking a large toll, followed by diabetes (3%) and respiratory diseases (3%).185 Communicable diseases in South Africa, such as malaria, tuberculosis and HIV/AIDS, are discussed below.

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3.4.2.1. Malaria Unlike most African countries, risk of malaria infections is absent in most parts of the country, with the exception of Limpopo, the low altitude areas of Mpumalanga, KwaZulu-Natal along the Tugela River and the Kruger National Park. High risk months for malaria infections in these areas are January through to December.186 In 2001 South Africa formulated its Roll Back Malaria strategic plan and since then the number of cases and deaths have been drastically reduced. In 2000 there were approximately 64,500 malaria cases reported and more than 450 deaths due to the disease. In 2001 there were 26,500 cases reported and this number has reduced consistently over the last couple of years, with only 6,847 cases reported in 2012.187 The number of deaths has also been reduced with 87 deaths recorded for 2006, and 54 deaths recorded in 2011 (see Figure 3.19). 188 South Africa has succeeded in reducing the prevalence of the disease and is aiming to eliminate the disease (zero local malaria cases) by the year 2018.189 100 90 80

Actual deaths reported

70 60 50

Malaria – number

of reported deaths

40 30 20 10 0 2006

2007

2008

2009

2010

2011

Year

Source: The World Health Organization, 2013. 190

Figure 3.19: Malaria – Number of reported deaths (2006 –2011)

3.4.2.2. HIV/AIDS In 2012 South Africa ranked number 4 of 105 countries with a high prevalence of people living with HIV/ AIDS. At the time, about 1.5 million people were estimated to be infected with HIV. The number of deaths indicated as AIDS-related in 2012 was an estimated 63,000.191 The estimated HIV/AIDS prevalence in the population has increased substantially since 1990. In 1990 it was estimated that 0.2% of the population lived with HIV/AIDS, which increased to 17.9% in 2012.192 Compared to Kenya (6.1%), Nigeria (3%), Tanzania (5%) and Uganda (7.2%), South Africa’s HIV/AIDS prevalence rate is extremely high. (See Figure 3.20.)

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African Human Capital and Labour Report: SOUTH AFRICA

180 160 140

Actual numbers

120

South Africa

100

Kenya Nigeria

80

Tanzania

60

Uganda

40 20 0 2000

2001

2002

2003

2004

2005 2006 Year

2007

2008

2009

2010

2011

Source: UNAIDS, 2013. 193

Figure 3.20: Regional comparison: Estimated HIV/AIDS prevalence

Table 3.12 shows a breakdown of the HIV/AIDS prevalence in South Africa for 2012. Table 3.12: HIV/AIDS estimates for the South African population (000s) (2012)

HIV/AIDS estimate

Realistic estimate

Optimistic estimate

Pessimistic estimate

Number of people living with HIV

6,100

5,800

6,400

Adults aged 15 to 49 prevalence rate (%)

17.90

17.30

18.40

Adults aged 15 and up living with HIV

5,700

5,500

6,000

Women aged 15 and up living with HIV

3,400

3,200

3,600

Children aged 0 to 14 living with HIV

410

370

450

Deaths due to AIDS

240

220

270

2,500

2,300

2,700

Orphans due to AIDS aged 0 to 17 Source: UNAIDS, 2013. 194

The impact of HIV/AIDS on children is devastating: in 1990 there were 1,200 children living with HIV/AIDS, but this number increased substantially to 410,000 children living with HIV/AIDS in 2012.195 (See Figure 3.21.)

52

Thousands

African Human Capital and Labour Report: SOUTH AFRICA

500 450 400

Actual numbers

350 300 250

Children (0–14) living with HIV

200 150 100 50 0 1990

1995

2000

2005

2010

Year

Source: World Bank, 2013.196

Figure 3.21: Children living with HIV/AIDS (1990–2012)

An estimated 2.5 million children have become orphaned in South Africa as a result of HIV/AIDS that took its toll on the 15–49 year population.197 Childheaded households are a reality in South Africa, especially in townships, where many children under the age of 17 are left to fend for themselves and their siblings. There are many non-profit organisations, such as Rays

South Africa has implemented numerous strategies and plans in

of Hope198 and Afrika Tikkun,199 that are involved in

an attempt to reduce the

supporting children orphaned by HIV/AIDS. Active

number of HIV/AIDS

support is often given in the form of food supplies, grants and support groups to such communities,

infections and deaths.

orphans and their elderly caretakers. Antiretroviral therapy (ART) coverage in South Africa has increased significantly: 43% of people with advanced HIV infection were treated with ART in 2009, and 80% in 2012. It is estimated 83% of pregnant women living with HIV in 2012, received antiretrovirals to prevent mother-to-child transmission.200 South Africa has implemented numerous strategies and plans in an attempt to reduce the number of HIV/AIDS infections and deaths. These actions are internationally recognised as exemplary and, in many instances, are leading the world. In meeting the UNAIDS goals set for countries with high HIV/AIDS prevalence, South Africa ranks highly:

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African Human Capital and Labour Report: SOUTH AFRICA

Table 3.13: UNAIDS goals Goals

Rank

Strengthen HIV integration

1/170

Eliminate stigma and discrimination

1/160

Avoid TB deaths

1/141

15 million accessing treatment

1/105

Epidemiological status

1/105

Eliminate gender inequalities

1/105

Eliminate new HIV infections among children

2/170

Eliminate travel restrictions

41/170

Close the resource gap

45/130

Source: UNAIDS, 2014. 201 For more information on the epidemic, prevention techniques and country comparisons, visit UNAIDS’ website at: http://www.unaids.org/en/ dataanalysis/datatools/aidsinfo/.

3.4.2.3. Tuberculosis (TB) South Africa is one of the countries with the highest TB incidence rates in the world.202 The number of TB related deaths reported for 2010 exceeded 62,000.203 In general, there has been an upward trend in the incidence of TB in South Africa over the period 1990 to 2012. In 2012 there were 1,003 per 100,000 people infected with TB compared to 301 per 100,000 people infected with TB in 1990.204 This is significantly higher than the TB incidence rate in Kenya (272 per 100,000 people), Uganda (179 per 100,000), Tanzania (165 per 100,000 people) and Nigeria (108 per 100,000 people). (See Figure 3.22.)

In 2012 there were 1,003 per 100,000 people infected with TB compared to 301 per 100,000 people infected with TB in 1990.

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African Human Capital and Labour Report: SOUTH AFRICA

1200

Incidence per 100,000 people

1000

800

South Africa Kenya

600

Nigeria Tanzania

400

Uganda

200

0 1990

1995

2000 Year

2005

2010

Source: World Bank, 2013.205

Figure 3.22: Regional comparison: Incidence of TB (per 100,000 people)

TB detection rates have decreased since 1990. In 2012 the detection rate was 62% compared to 73% in 1990. The TB treatment success rate decreased from 78% in 1994 to 58% in 1995 but increased steadily to 79% in 2011.206 (See Figure 3.23.) 90 80 70

Percentage of cases

60

Tuberculosis case

detection rate (%, all forms)

50 40

Tuberculosis

treatment success rate (% of registered cases)

30 20 10 0 1990

1995

2000 Year

Source: World Bank, 2013.207

Figure 3.23: TB detection and treatment success rates

2005

2010

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African Human Capital and Labour Report: SOUTH AFRICA

3.4.3. Business Impact of Malaria, HIV/AIDS and TB Business impact answers the question: “How serious an impact do you consider malaria will have on your company in the next five years (e.g. death, disability, medical and funeral expenses, productivity and absenteeism, recruitment and training expenses)?” The business impact of malaria, HIV/AIDS and TB, as surveyed by the World Economic Forum (WEF), is substantial in South Africa when compared to the business impact in other countries. Table 3.14 indicates how South Africa ranks out of 144 countries, compared to Nigeria and Kenya. According to The Africa Competitiveness Report 2013, the adverse business impact of malaria is less in South Africa than in Nigeria and Kenya. The business impact of TB and HIV/AIDS is worse in South Africa than in Nigeria and Kenya.208 (See Table 3.14.) Table 3.14: Regional comparison: Business impact of malaria, TB & HIV/AIDS (2013)

  Indicator

South Africa Value

Nigeria

Rank/144

Value

Kenya

Rank/144

Value

Rank/144

Business impact of malaria

5.1

100

3.4

129

3.4

128

Business impact of TB

3.5

132

4.3

118

3.7

128

Business impact of HIV/AIDS

3.0

135

4.3

114

3.3

130

Source: World Economic Forum. 2013.209 Note: Value of 7 =  no impact at all, value of 1 =  a serious impact

3.5. Structure and Nature of Healthcare 3.5.1. Healthcare Practitioners The Health Professions Council of South Africa (HPCSA) has 216,191 healthcare practitioners registered for 2013.210 The healthcare practitioners are divided into qualified professionals, interns, and students, and are situated in all the provinces in South Africa. Figure 3.24 shows that qualified professionals make up 77% of all the healthcare practitioners, students contribute 21% to the total, and interns contribute 2%.211

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African Human Capital and Labour Report: SOUTH AFRICA

Health Professionals Registered 2%

21%

Qualified professionals Students Interns 77%

Source: Health Professions of South Africa, 2013.212

Figure 3.24: Percentage distribution of persons registered with the Health Professions Council of South Africa (2013)

There are 12 professional medical boards and all medical practitioners need to be registered with one of these boards. 213 Table 3.15 and Figure 3.25 show a comprehensive list of all the medical boards and the number of healthcare practitioners registered with the specific board. Table 3.15: Distribution of healthcare professionals by professional boards (2013)

Acronym

Professional Board

Total

% of total

EMB

Emergency Medical Care

65,761

30.42%

MDB

Medical & Dental (and Medical Science)

65,228

30.17%

MTB

Medical Technology

16,125

7.46%

PSB

Psychology

13,061

6.04%

PPB

Physiotherapy, Podiatry & Biokinetics

11,507

5.32%

RCT

Radiography & Clinical Technology

10,730

4.96%

OCP

Occupational Therapy, Medical Orthotics/Prosthetics & Arts Therapy

7,816

3.62%

DOH

Dental Therapy and Oral Hygienists

6,817

3.15%

EHO

Environmental Health

5,668

2.62%

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African Human Capital and Labour Report: SOUTH AFRICA

Acronym

Professional Board

Total

% of total

ODO

Optometry and Dispensing Opticians

4,841

2.24%

DTB

Dietetics and Nutrition

4,581

2.12%

SLH

Speech, Language and Hearing Professions

4,056

1.88% 216,191

Source: Health Professions of South Africa, 2013. 214

Health Professionals Registered 3%

2%

Emergency Medical Care

2% 2%

Medical & Dental (and Medical Science)

3%

Medical Technology

4%

30%

Psychology

5%

Physiotherapy, Podiatry & Biokinetics 5%

Radiography & Clinical Technology Occupational Therapy, Medical Orthotics/ Prosthetics & Arts Therapy Dental Therapy and Oral Hygienists

6%

Environmental Health 8%

Optometry and Dispensing Opticians Dietetics and Nutrition 30%

Speech, Language and Hearing Professions Source: Health Professions of South Africa, 2013.215

Figure 3.25: Percentage distribution of healthcare professionals registered with the HPCSA (2013)

South Africa is in dire need of specialists, especially in the poorer provinces. The Western Cape has the majority of doctors with 56.7 physicians per 100,000 and Gauteng has 53.3 physicians per 100,000 people. Limpopo, however, only has 36.6 physicians per 100,000 people.216 The skills gap between private and public sector is also significant: more than 50% of the 12,000 doctors trained between 2002 and 2010 have emigrated or gone into private practice. A national body had been approved by the National Health Council to assess the demand for specialists in South Africa and to make recommendations to the medical schools on how many specialists are required and in which specialities.217

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African Human Capital and Labour Report: SOUTH AFRICA

3.5.2. Healthcare Facilities In general, the healthcare centres, hospitals, clinics and dispensaries found throughout South Africa are fairly accessible to most South Africans. The number of hospitals and clinics, and percentage distribution of healthcare facilities available by province for 2013, are indicated in Table 3.16 and Figure 3.26 below. Table 3.16: Number and percentage distribution of healthcare facilities by province (2013) Province

Number of hospitals/Clinics

Eastern Cape

Percentage share

1,137

11.17%

Free State

447

7.30%

Gauteng

904

14.20%

1,154

6.24%

Limpopo

711

7.02%

Mpumalanga

465

18.13%

North West

397

4.81%

Northern Cape

306

17.86%

Western Cape

845

13.27%

KwaZulu-Natal

Source: Health Sites, 2013.218

Health Care Facilities By Province 13%

Eastern Cape

11%

Free State 8%

Gauteng Kwa-Zulu Natal

18% 14%

Limpopo Mpumalanga North West

5% 6%

18%

7%

Source: Health Sites, 2013219 & the South African Government, 2013.220

Figure 3.26: Distribution of healthcare facilities by province (2013)

Northern Cape Western Cape

African Human Capital and Labour Report: SOUTH AFRICA

The healthcare facilities in South Africa are divided into: •

Clinics

•

District Hospitals/Provincial Aided

•

Midwife Obstetrics Units

•

Mobile Services

•

Psychiatric Hospitals

•

Regional Hospitals

•

Reproductive Health Facilities

•

Specialised Healthcare Facilities

•

TB Hospitals

•

Tertiary Hospitals.

There are a number of private hospital groups operating in South Africa: Mediclinic Southern Africa, Netcare Limited, Life Healthcare and Lenmed Health. To locate healthcare professionals, hospitals or clinics in South Africa, and to obtain their contact details, visit South African Doctors’ website at www.sadoctors.co.za or www.healthsites.org.za.

3.5.3. National Healthcare Insurance South Africa is embarking on implementing National Health Insurance (NHI). The objectives of the NHI as per the Green Paper: National Health Insurance in South Africa are:221 a) To provide improved access to quality health services for all South Africans irrespective of whether they are employed or not. b) To pool risks and funds so that equity and social solidarity will be achieved through the creation of a single fund. c)

To procure services on behalf of the entire population and efficiently mobilize and control key financial resources. This will obviate the weak purchasing power that has been demonstrated to have been a major limitation of some of the medical schemes resulting in spiralling costs.

d) To strengthen the under-resourced and strained public sector so as to improve health systems performance. It is believed that, if implemented correctly, the NHI can assist in transforming South Africa from being one of the most unequal countries in the world. According to Louis Reynolds, the associate professor of Paediatrics at the University of Cape Town, a proper health system can encourage equality.222 NHI can also help reduce costs for all South Africans, because the regulation of healthcare costs is intended for both the private and public sector. Healthcare costs in the private-sector are currently not regulated (except for medicines) and has increased 120% in the last decade.223

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There is, however, some controversy about the NHI, especially between Dr Chris Archer, the CEO of the South African Private Practitioners’ Forum, and Health Minister Aaron Motsoaledi. The full debate can be read on the Mail & Guardian’s website: http://mg.co.za/tag/national–health–insurance–nhi.

3.6. Implications, Challenges and Recommendations 3.6.1. Population Growth Rate The South African population growth rate of 1.18% is substantially lower than other countries in Africa. An outcome of this scenario is that the proportion of the population in the 0 – 14 age bracket has dropped from 38.94% in the 1990 to 29.17% in 2012, and is forecast to decrease further. Although the actual numbers are still increasing, the massive pressure on the government in terms of providing additional school facilities and related services is decreasing. There is, though, a tremendous backlog in education, housing, healthcare and in other social services that needs to be addressed. Rapid urbanisation is also contributing to the backlogs. The growing population, as well as these backlogs, provide opportunities for investors and companies involved in infrastructure development and consumer goods. It also creates opportunities for innovative approaches and solutions to deliver social services.

3.6.2. Improving Living Standards Living standards in South Africa for the population as a whole compares very favourably with the other countries on the African continent. There is, however, room for improvement as well as opportunities in this regard: 1. The skewed income and wealth distribution, as measured by the Gini index, needs to be addressed. Social grants are alleviating the situation; however, job creation (especially in the private sector) should be prioritised. The benefits of Broad Based Black Economic Empowerment should also reach the poor. 2. The proportion of the South African population living in poverty is substantial. 13% of the population live in multi-dimensional poverty. However, 22% are vulnerable or at risk to become multidimensionally poor. 3. Virtually no improvement has occurred since 1990 as far as the Human Development Index is concerned – this is a major concern. Although South Africa ranks above the other countries in subSaharan Africa, with a ranking of 121 the country is in the bottom third in the world. The answer to the problems highlighted above lies in a multi-perspective approach, for example, better and quicker service delivery, greater efficiencies and productivity in service delivery, less corruption and obviously better education. (More on this in the next chapter.) The main approach should be to get the economy on a higher growth trajectory in order to create more sustainable jobs. Again, the focus is on the implementation of the National Development Plan 2030.

African Human Capital and Labour Report: SOUTH AFRICA

It cannot be stressed enough that social responsibility programmes can improve living conditions substantially. Below is an example of how corporate social responsibility initiatives at Sanlam, Massmart and Standard Bank address the specific needs of the wider community. Corporate Social Responsibility at Sanlam224 Sanlam Foundation has partnered with the Regency Foundation and the Provincial Department of Education to prevent and manage HIV and AIDS in schools. The Regency Foundation is a NGO that assists schools to develop, integrate and implement their own HIV and AIDS policies, in keeping with national government priorities and regulations. The programme, HIV&Me, integrates the scientific and social aspects of the epidemic and encourages behavioural change and on-going healthy lifestyles. It launched during 2011 in 20 schools in KwaZulu-Natal. Participating schools receive a comprehensive two–year training programme that starts with training workshops for teachers and the community, continues with an in–classroom programme for Grade 8’s during Life Orientation, and concludes in the second year with the same pupils in Grade 9. In addition, parents, families and the community will be involved through the respective school’s governing bodies. Through this partnership, Sanlam employees will have the opportunity to escalate Sanlam’s impact by teaching financial literacy skills to students and the larger community. Sanlam’s engagement with these 20 schools to deliver a 3 year intervention includes: Training and Reinforcement, the Family Support Program (FSP) and School Policy Workshops, as well as and Pre and Post Learner Assessments. The latter providing a benchmark for measuring change in learner knowledge, attitude and practice in areas relating to HIV&AIDS prevention and management, as a result of participating in the program. Schools were selected in consultation with the KZN Department of Education (DoE), specifically Pinetown District Mafukuzela Gandhi Circuit and Umlazi District Durban Central Circuit. Total direct learner reach is 5421 and total grade 9 LO and NS educator reach is 76. Corporate Social Responsibility at Massmart225 We invest one percent of profit after tax in social development initiatives that address the root causes of many of South African biggest challenges, but we also make our wide range of merchandise available to people who are making plans to help others. We invest in SCHOOL FEEDING programmes because nutrition is vital to improving marks and reducing absenteeism. •

100 – number of Game’s AmaLunchbox kitchens installed at schools across South Africa (including 2 in Malawi and 1 in Zambia);

•

160 – number of Walmart, Cambridge Food and Masscash Econo-Kitchens installed at schools across South Africa;

We support initiatives that address NUTRITION because access to adequate healthy food is vital to maintaining a healthy society. •

5 500 – number of Food hampers donated to the families of SANDF soldiers deployed on our borders and serving under United Nations mandate on peace keeping mission in other countries;

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We support EDUCATION programmes and EARLY CHILDHOOD DEVELOPMENT because this is the key to unlocking potential for talented young people. •

28 – number of Builders Warehouse Siyasiza gardening and maintenance DIY toolkits donated to schools;

•

72 – number of primary schools across the country that received renovations through Builders Warehouse’s partnership with Ripples for Good;

•

R2,6 million – funding provided in 2013 for the improvement of teaching and learning in preschools and crèches across the country through Makro’s support of the HOPE Worldwide SUCCEED programme;

•

16 – number of SmartBoards donated by DionWired in 2013, to aid meaningful and interactive learning in schools for children living with disabilities;

We encourage ENTREPRENEURSHIP as a means of creating opportunities for oneself. •

52 – number of Black–owned Hot Dog Café and The Coffee Stop shops at Massmart stores funded through Massmart–National Youth Development Fund;

•

4 123 – number of Women–owned businesses that have benefitted as a result of the Massmart–WDB Rural Women’s Development Fund;

Corporate Social Investment at Standard Bank226 For 2014, we have selected new projects to drive access to quality education and will partner with the National Education Collaboration Trust (NECT). The NECT has been launched as a partnership between government, the private sector, labour and academia. Unlike the Dinaledi Schools Programme which addressed individual schools, this initiative will intervene at district level to improve educational outcomes. Supporting education provides us with a number of opportunities including the end–goal of an improved economic climate which will positively impact our business and the possibility of recruiting the scholarship students we support into the bank on graduation. Two of our current programmes are the Standard Bank Adopt a School Scholarship Programme and the St. Stithian’s Thand’ulwazi Maths and Science Academy. Standard Bank Adopt a School Scholarship Programme The Standard Bank Adopt a School Scholarship Programme supports the tertiary education of high–performing learners identified through the projects we fund. A total of 71 full scholarships for university tuition have been awarded since 2011, a total investment of R33 million. The scholarship covers accommodation, tuition, registration, study material, travel, stipend and an induction weekend. We will continue to support this programme in 2014 with 20 scholarships reserved for learners. Standard Bank Plc. also donated £50 000 (R750 995) to this programme during 2013. While some scholarship recipients have to complete an additional six to 12 months of study to repeat failed modules, no student has abandoned their studies. Given that the national dropout rate for first year students is around 30%, the performance of our scholarship students is more than acceptable. Eight of the 2011 scholarship recipients graduated at the end of 2013.

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St. Stithian’s Thand’ulwazi Maths and Science Academy The Thand’ulwazi Maths and Science Academy at St. Stithians College provides tuition in mathematics and science to learners from schools in Gauteng township communities. It contributes to the general improvement of the matriculation pass rate and equips learners with Mathematics and Science skills that will enable them to obtain matriculation exemption and prepare them for tertiary education. The programme continues to achieve excellent results and while the overall National Senior Certificate pass rate for Thand’ulwazi Grade 12 learners did decrease, the drop was marginal from 99.4% in 2012 to 97.5% in 2013. This was still ahead of both the regional and national pass rates for 2013 of 87.0% and 78.2% respectively. Some 58.8% of the Thand’ulwazi learners achieved a university exemption, compared to the national figure of 30.6%, and 75 distinctions were achieved across the subjects of accounting, mathematics, life science, physical science, English and maths literacy.

3.6.3. Corporate Health and Wellness Programmes Overall healthcare indicators for South Africa are improving; however, much more can still be done. For instance, the adverse impact on business of diseases such as TB and HIV/AIDS is severe when compared to the impact in most countries in the world. The impact they have on society will be equally harmful. Employers have a large responsibility to improve the situation. Through direct education plans for their workforce, they could proactively influence employees in terms of prevention. Also, the workforce could be educated in terms of the best treatment options and could be supported in their treatment programmes.

Through corporate social responsibility programmes, companies can achieve the same results mentioned above from society at large.

Through corporate social responsibility programmes, companies can achieve the same results mentioned above from society at large. Organisations should formulate formal Health and Wellness Strategies, which could be implemented through, among others, Health and Wellness Days which focus on education, prevention and counselling. Healthcare practitioners can be engaged on these days to do onsite examinations and provide personal feedback to employees. Through these counselling and feedback sessions, ignorance among employees regarding health issues can be addressed.

African Human Capital and Labour Report: SOUTH AFRICA

4

Education and Skills Development This chapter addresses the educational achievement of the South African population, literacy rates, education parameters, the educational system, and provides regional comparisons where applicable.

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4.

Education

4.1. Qualifications Profile of the Population and Labour Force 4.1.1. Highest Level of Education Achieved Table 4.1 below indicates the highest level of education obtained by the South African population. It is evident that 6% of the population have no formal education and 33% have obtained only primary education or lower. Only 3% (1.4 million people) have tertiary level qualifications.227 Although the qualification levels are substantially higher than those of other African nations, it is clear that, in order to compete internationally, South Africa’s high level human capital component (3%) will have to increase drastically. However, a large proportion of the population is still enrolled at various school and tertiary education levels. (See Table 4.1 and Figure 4.1 below.) Improving a country’s overall human capital is a long-term effort and it will take a few decades before the country’s education profile improves to about 10% or higher for high level human capital. Table 4.1 Highest education level obtained (000s) (2011)

Broad education level

Number

Percentage of total

No formal education

3,159

6%

Pre-primary 

1,643

3%

Primary 

12,577

24%

Secondary 

26,364

51%

1,433

3%

117

0.2%

6,477

13%

Tertiary  Other  Children under the age of 5  Total  Source: Statistics South Africa, 2013.228

51,771

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African Human Capital and Labour Report: SOUTH AFRICA

60

Percentage of total population

50

No formal

40

education

Pre-primary 30

Primary Secondary Tertiary

20

Other 10

0 Highest educational level

Source: Statistics South Africa, 2013. 229

Figure 4.1: Highest education level obtained, by broad education level – percentage of total (2011)

As mentioned above, only 3% of the population attained tertiary education (1.4 million people). According to Statistics South Africa, the majority of people in this group have obtained bachelors degrees (598,856 graduates), followed by those with honours

The population groups

degrees (287,096). There were 223,662 people

with the greatest number

who had obtained bachelors degrees along with postgraduate diplomas, 205,416 people had obtained

of bachelors degrees

higher degrees, such as masters or doctorates; and

were Africans/Blacks

118,253 people had obtained post higher diploma masters or doctoral diplomas (see Table 4.2 and

(278,561), followed by

Figure 4.2).

Whites (235,479).

230

The population groups with the greatest number of bachelors degrees were Africans/Blacks (278,561), followed by Whites (235,479). The population groups with the greatest number of honours degrees were Whites (127,207), followed by Africans/Blacks (123,607). Whites have also obtained the highest number of higher degrees such as masters or doctorates (105,559), followed by Africans/Blacks (71,331).231 It is interesting to note that Africans/Blacks with bachelor degrees now number more than Whites. As far as honours and masters degrees are concerned, the gap is also closing – quickly. The statistics are obviously not even close to the South African population breakdown in terms of race; however, the trend is in the right direction. (See Table 4.2 and Figure 4.2.)

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Table 4.2: Distribution of the population with tertiary education by qualification and population group (000s) (2011)

Highest educational level

African/

Coloured

Black Bachelors degree  Bachelors degree and Postgraduate diploma  Honours degree  Higher degree masters/PhD  Post-higher diploma masters; doctoral diploma 

Indian/

White

Other

Total

Asian

279

30

47

235

7

599

98

11

17

95

3

224

124

13

20

127

3

287

71

8

16

106

4

205

61

7

8

42

2

118

Source: Statistics South Africa, 2013.232

Percentage of total population

45

No formal

40

education

35

Primary education – foundation phase

30

Primary education – intermediate phase Primary/Secondary education – senior phase

25 20

Secondary education – further education and training

15 10

Tertiary education – higher education and training

5 0

Education level

Other

Source: Statistics South Africa, 2013.233

Figure 4.2: Highest level of education obtained (2011)

4.1.2. Literacy Rates Literacy rates are defined by the World Bank as the percentage of the population who can both read and write, with understanding, a short simple statement on their everyday life. Generally, ‘literacy’ also encompasses ‘numeracy’ (the ability to make simple mathematical calculations).234 The literacy rate among the adult population is slightly lower than among the youth population: in 1996 it was 82.4% and in 2011 it was 92.98%, an increase of 12.8% from 1996. Literacy rates among males are slightly higher than among females: in 2011 they were 93.86% for males and 92.18% for females respectively.235 (See Figure 4.3.)

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95

Percentage of age group

90

Literacy rate,

adult female (% of females ages 15 and above)

85

Literacy rate,

adult male (% of males ages 15 and above)

80

Literacy rate,

adult total (% of people ages 15 and above)

75

70 1996

2007 Year

2011

Source: World Bank, 2013. 236

Figure 4.3: Literacy rates, adults over 15 (1996, 2007, 2011)

Literacy rates among the youth population in 1996 were 93.91% and 98.78% in 2011, an increase of 5% from 1996. Literacy rates among females are slightly higher than among males: in 2011 it was 99.16% for females and 98.41% for males. 237 (See Figure 4.4 below.) 100 99 98

Literacy rate,

Percentage of age group

97

youth female (% of females ages 15–24)

96

Literacy rate,

95

youth male (% of males ages 15–24)

94

Literacy rate,

93

youth total (% of people ages 15–24)

92 91 90 1996

2007 Year

2011

Source: World Bank, 2013.238

Figure 4.4: Literacy rates 15–24 year age population (1996–2011)

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In 2011 literacy rates among the youth population in South Africa with 98.78% was higher than Nigeria with 66.38% (2008), Kenya with 82.39% (2007), and sub-Saharan Africa with 70.44% (2010). It is equal to that of Brazil (97.51%), Turkey (98.71%) and Vietnam (97.07%), but it was higher than the world average in 2011 (89.44%).239 (See Table 4.3 below.) Table 4.3: Regional comparison: Literacy rate, youth total (% of people ages 15–24)

Country/Region

Literacy rate

Notes

South Africa

98.78

**

Nigeria

66.38

^

Kenya

82.39

$

Brazil

97.51

*

Turkey

98.71

*

Vietnam

97.07

*

Sub–Saharan Africa

70.44

*

World

89.44

*

Source: World Bank, 2013.240 Notes:

$: 2007

^: 2008

*: 2010

**: 2011

4.2. Levels of Education Levels of education in South Africa entail pre-primary, primary, secondary and tertiary education. (See Table 4.4 below.) Table 4.4: Education levels in South Africa by phase & level

Broad education level

Phase

Highest educational level

Pre-primary

Foundation phase

Grade 0 & Grade R

Primary

Foundation phase

Grade 1–3/ABET 1 Kha Ri Gude*; SANLI**

Intermediate phase

Grade 4–6/ABET 2

Senior phase

Grade 7/ABET 3 

Senior phase

Grade 8–9/ABET 4

Further education and training

Grade 10–12

Secondary

NTC I/N1/NIC/V Level 2 

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Broad education level

Phase

Highest educational level NTC II/N2/NIC/V Level 3  NTC III/N3/NIC/V Level 4  N4–N6 Certificate/Diploma with less than Grade 12 Certificate/Diploma with Grade 12 Higher diploma 

Tertiary

Higher education and training

Post higher diploma masters; Doctoral diploma  Bachelors degree  Bachelors degree and Postgraduate diploma  Honours degree  Masters/PhD.

Sources: Statistics South Africa, 2013;241 South African Department of Basic Education, 2013;242 South African Department of Higher Education and Training, 2013.243 Note: * Kha Ri Gude (Let Us Learn) Adult Literacy Programme (KGALP) ** South African National Literacy Initiative (SANLI)

Table 4.5 below indicates the number of enrolments to basic education from 2010 to 2013, i.e. pupils enrolled for pre-primary, primary and secondary education. Enrolments to tertiary education will be discussed in depth in Section 4.3 below. Table 4.5: Distribution of the population attending pre–primary, primary or secondary education (000s) (2010–2013)

Level of education

2010

2011

2012

2013

757

785

816

823

Primary

7,024

6,957

7,004

7,064

Secondary

4,471

4,534

4,597

4,593

12,253

12,277

12,418

12,480

Pre-primary (Pre-grade R & Grade R)

Total Basic Education

Sources: South African Department of Basic Education, 2011,244 2012,245 2013.246

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4.2.1. Pre-primary Education Gross enrolment rates (GER) for pre-primary education, as indicated by the World Bank, is the total enrolment for pre-primary education, regardless of

GER for pre-primary

age, expressed as a percentage of the total population

education in South Africa

of official pre-primary education age. The GER may exceed 100% due to the inclusion of over-aged and

(65.03%) is far higher

under-aged pupils because of late school entrance or

than Nigeria’s 13.91%, and

grade repetition.247

the sub-Saharan Africa

The GER for pre-primary education in South Africa

average of 18.08%, and the

has fluctuated over the period 1994 to 2009. The GER

world average since 2004.

in 1994 was 31.82% and in 2009 it was 64.97%, an increase of 104% since 1994. Since 2002, the GER has increased consistently.248 (See Figure 4.5 below.)

70

60

Percentage of enrolments

50

School enrolment, pre-primary, female (% gross)

40

School enrolment,

30

pre-primary, male (% gross)

20

10

0 1998

1999

2000

2001

2002

2003 2004 Year

2005

2006

2007

2008

2009

Source: World Bank, 2013.249

Figure 4.5: School enrolment, pre–primary (Percentage gross) (1998–2009)

GER for pre-primary education in South Africa (65.03%) is far higher than Nigeria’s 13.91%, and the subSaharan Africa average of 18.08%, and the world average since 2004 (46.63% in 2009).250 (See Figure 4.6.)

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African Human Capital and Labour Report: SOUTH AFRICA

70

60

Percentage of enrolments

50

South Africa 40

Nigeria Sub-Saharan Africa

30

World 20

10

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year

Source: World Bank, 2013.251

Figure 4.6: Regional comparison: School enrolment, pre–primary (percentage gross) (1998-2011)

4.2.2. Primary Education The GER for primary education fluctuated from 106.7% in 1990 to 99% in 2012 for both genders. GER for males has been slightly higher than for females, and the trend continues–in 2012 the GER was 101% for males and 96% for females (see Table 4.6 and Figure 4.7 below). Table 4.6: Primary education: Gross enrolment rates (%) & pupils (000s) (1990–2013)

Indicator School enrolment, primary (% gross) School enrolment, primary, female (% gross) School enrolment, primary, male (% gross) Primary education, pupils

1990

2000

2010

2011

2012

2013

106.70

105.92

94.00

93.00

99.00

*

106.12

103.31

92.00

91.00

96.00

*

107.28

108.52

96.00

95.00

101.00

*

6,952

7,445

7,024

6,957

7,004

7,064

Sources: 1990–2000 data: World Bank, 2013.252 2010–2013 data: South African Department of Basic Education, 2012,253 2013,254 2014.255 Note: *No data available at present.

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African Human Capital and Labour Report: SOUTH AFRICA

140

Percentage of all enrolments

120

100

School enrolment, primary, female (% gross)

80

School enrolment,

60

primary, male (% gross)

40

20

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

0 Year

Sources: 1997–2000 data: World Bank, 2013.256 2010–2013 data: South African Department of Basic Education, 2012,257 2013,258 2014.259

Figure 4.7: School enrolment, primary (percentage gross)(1997-2012)

The number of pupils enrolled for primary education stayed more or less constant around 7 million from

Millions

1999 to 2013. In 2013, 7.064 million pupils were enrolled (see Table 4.6 above and Figure 4.8).260 9 8 7

Actual numbers

6 5

Primary

education, pupils

4 3 2 1 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year

Sources: 1999–2000 data: World Bank, 2013.261 2010–2013 data: South African Department of Basic Education, 2012,262 2013,263 2014.264

Figure 4.8: Primary education, pupils (1999-2013)

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African Human Capital and Labour Report: SOUTH AFRICA

The number of pupils enrolled for primary education in South Africa in 2010 was 7 million,265 which was lower than in Kenya (9.38 million),266 and was substantially lower than in Nigeria (20.6 million).267 (See

Millions

Figure 4.9.) 25

Actual numbers

20

South Africa*

15

Kenya** Nigeria*** 10

5

0

2010

Sources: Kenya National Bureau of Statistic, 2012;268 South African Department of Basic Education, 2012;269 & World Bank, 2013.270

Figure 4.9: Regional comparison: Primary education, pupils (2010)

In South Africa, public schools are the main driver of basic education as opposed to private schools. Enrolments to private schools have, however, increased over the period 1990 to 2013 (56,000 to 271,000), an increase of 383% since 1990.271 The sharp increase is a result of the concern parents have about the quality of the education system, as well as more affordable options of private education. Overall, private school enrolment is still a small percentage of the total. (See Table 4.7.) Table 4.7: Enrolments, primary: Private (% & 000s)

Indicator Name

1990

2000

2010

2011

2012

2013

Primary education, pupils

6,952

7,445

7,024

6,957

7,004

7,064

56

127

232

244

260

271

0.81

1.70

3.30

3.51

3.71

3.83

School enrolment, primary, private (000s) School enrolment, primary, private (% of total primary)

Sources: 1990–2000 data: World Bank, 2013.272 2010–2013 data: South African Department of Basic Education, 2012,273 2013,274 2014.275

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African Human Capital and Labour Report: SOUTH AFRICA

The number of teachers in primary education has fluctuated over the period 2000 to 2013 (see Table 4.8 below). In 2000 there were 222,487 teachers, but in 2012 the number decreased to 186,285.276 The decrease is mainly a result of restructuring and rationalisation in the education sector, as well as teachers leaving the profession voluntarily. (See Figure 4.10 below). Table 4.8: Primary education, teachers & Pupil–teacher ratio (2000–2012)

Indicator Name

2000

2009

2010

2011

2012

Primary education, teachers

222,487

232,160

187,520

187,065

186,285

Pupil–teacher ratio, primary

33.46

30.71

37.45

37.19

37.60

Thousands

Sources: 2000 data: World Bank, 2013.277 2009–2013 data: South African Department of Basic Education, 2012,278 2013,279 2014.280

300

250

Actual numbers

200

Primary education,

150

teachers

100

50

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year

Sources: 1999–2000 data: World Bank, 2013.281 2010–2013 data: South African Department of Basic Education, 2012,282 2013,283 2014.284

Figure 4.10: Primary education, teachers (1999 – 2012)

In 2000 there were 33 pupils to a teacher in a class (Table 4.8 above), but in 2012 this ratio weakened to 38 pupils to a teacher.285 (See Figure 4.11).

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African Human Capital and Labour Report: SOUTH AFRICA

40

35

Pupil–teacher ratio

30

25

Pupil-teacher

20

ratio, primary

15

10

5

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year

Sources: 1999–2000 data: World Bank, 2013.286 2010–2013 data: South African Department of Basic Education, 2012,287 2013,288 2014.289

Figure 4.11: Pupil–teacher ratio, primary education (1999-2012)

4.2.2.1. Quality of Primary Education The quality of primary education in South Africa is a major cause for concern. In terms of the quality of primary education, The African Competitiveness Report 2013 ranks South Africa towards the bottom at 132 of 144 countries. That is substantially lower than Nigeria (102nd) and Kenya (38th). 290 (See Table 4.9.)

The quality of primary

Table 4.9: Quality of primary education (2013)

education in South

Country

Value

Rank/144

South Africa

2.3

132

Nigeria

3.2

102

Kenya

3.6

78

Source: World Economic Forum, 2013.291 Note: Values are on a 1-to-7 scale, with 7 being the most desirable.

Africa is a major cause for concern.

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African Human Capital and Labour Report: SOUTH AFRICA

4.2.3. Secondary Education The percentage of pupils who progressed from primary education to secondary education has shown an increase over the period 1991 to 2003. Progression to secondary education in 1991 was 86.82%, at its peak in 2002 it was 95.24%, and in 2003 it was 89.72%, an increase of 3% from 1991.292 (No further data is available for this indicator). The number of pupils enrolled for secondary education has shown a consistent increase over the period 1990 to 2013 (see Table 4.10). In 1990 there were 2.7 million pupils293 in secondary education, and in 2013 there were 4.6 million,294 which represents an increase of 67.5% since 1990 and a 10.9% increase since 2000 (see Figure 4.12). Table 4.10: Secondary education: Gross enrolment rates (%) & pupils (000s) (1990–2013) Indicator

1990

2000

2010

2011

2012

2013

School enrolment, secondary (% gross)

66.07

85.26

86.00

87.00

89.00

–

School enrolment, secondary, female (% gross)

70.99

89.50

89.00

90.00

92.00

–

School enrolment, secondary, male (% gross)

61.14

81.02

83.00

84.00

86.00

–

Secondary education, pupils (000s)

2,742

4,142

4,471

4,534

4,597

4,593

Millions

Sources: 1990–2009 data: World Bank, 2013.295 2010–2013 data: South African Department of Basic Education.296 6

5

Actual numbers

4

Secondary

3

education, pupils

2

1

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year

Sources: 1999–2009 data: World Bank, 2013.297 2010–2013 data: South African Department of Basic Education.298

Figure 4.12: Secondary education, pupils (1999-2013)

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African Human Capital and Labour Report: SOUTH AFRICA

The GER for both genders entering secondary education was 66.07% in 1990,299 increasing substantially to 89% in 2012300 (see Table 4.10). GER was at its highest in 2007 at 95.7%301 (see Figure 4.13). Gross enrolment rates have historically been higher for females compared to males, and the trend continues with 92% for females and 86% for males in 2012.302 100

95

Percentage of allenrolments

90

School enrolment,

85

secondary, female (% gross)

80

School enrolment,

secondary, male (% gross)

75

70

65

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

60 Year

Sources: 1998–2009 data: World Bank, 2013.303 2010–2013 data: South African Department of Basic Education.304

Figure 4.13: School enrolment, secondary (Percentage gross) (1998–2012)

Enrolments to private secondary schools have shown a steady increase over the period 2000 to 2013: private school enrolments increased from 95,000 (2000)305 to 191,000 in 2013,306 an increase of 101%. At 4.15% it is, however, still a small portion of the total enrolment figure (see Table 4.11). Table 4.11: Enrolments, secondary: Private (% of total) (2000–2013)

Indicator

2000

2010

2011

2012

2013

Secondary education, pupils (000s)

4,142

4,471

4,534

4,597

4,593

95

173

185

191

191

2.30

3.86

4.09

4.16

4.15

School enrolment, secondary, private (000s) School enrolment, secondary, private (% of total secondary) Sources: 2000 data: World Bank, 2013.307 2010–2013 data: South African Department of Basic Education.308

80

Millions

African Human Capital and Labour Report: SOUTH AFRICA

6

5

Secondary

Actual numbers

4

education, pupils

Secondary

education, general pupils

3

Secondary

education, vocational pupils

2

1

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year

Sources: 1999–2009 data: World Bank, 2013.309 2010–2013 data: South African Department of Basic Education.310

Figure 4.14: Secondary education pupils by type (1999-2013)

In 1999 there were 41,081 pupils enrolled for vocational courses, and 2.7 million for general courses;311 in 2011 these numbers increased to 221,671 vocational students and 4.3 million general students.312 In 2000 there were 147,612 teachers in secondary education;313 about the same as in 2012 with 147,945314 (see Table 4.12). The highest number of teachers in secondary education was recorded in 2008 (168,556).315 The percentage of teachers who were female in 1991 was 63%, decreasing to 53% in 2009 (see Figure 4.15).316 Table 4.12: Secondary education: Teachers & Pupil–teacher ratio (2000–2012)

Indicator

2000

2010

2011

2012

Secondary education, teachers

147,612

142,181

146,434

147,945

Pupil–teacher ratio, secondary

28.06

31.44

30.96

31.07

Sources: 2000 data: World Bank, 2013.317 2010–2012 data: South African Department of Basic Education.318

81

Thousands

African Human Capital and Labour Report: SOUTH AFRICA

180 160 140

Actual numbers

120 100

Secondary

80

Secondary

education, teachers education, teachers, female

60 40 20 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year

Sources: 1999–2008 data: World Bank, 2013.319 2009–2012 data: South African Department of Basic Education.320

Figure 4.15: Secondary education: Distribution of teacher population by gender (1999-2012)

In 2000, the pupil–teacher ratio was 28:1,321 weakening to 31:1 in 2012322 (see Table 4.12 above). The ratio was at its poorest at 33:1 in 2005323 (see Figure 4.16 below). Even so, this ratio is a substantial achievement when viewed against the increase in secondary school pupils over the same period. 35

30

Pupil–Teacher ratio

25

20

Pupil-teacher ratio, secondary

15

10

5

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year

Sources: 1998–2009 data: World Bank, 2013.324 2010–2012 data: South African Department of Basic Education.325

Figure 4.16: Pupil–teacher ratio, secondary education (1998 – 2012)

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African Human Capital and Labour Report: SOUTH AFRICA

The Matric pass rate has now improved consistently since 2010 with an increase of 15% over the threeyear period. Table 4.13 shows the National Senior Certificate results for 2010 to 2013. Table 4.13: National Senior Certificate (Matric) results – Summary (2010–2013) Indicator

2010

2011

2012

2013

Candidates who wrote

537,543

496,090

511,152

562,112

Candidates who passed

364,513

348,117

377,847

439,779

67.8%

70.2%

73.9%

78.2%

173,030

147,973

132,881

122,333

32.2%

29.8%

26.0%

21.8%

Candidates who passed (% of total) Candidates who failed Candidates who failed (% of total)

Source: South African Department of Basic Education, 2012,326 2013327 & 2014.328

It is the throughput (i.e. the distribution of pupils that enrolled for Grade 10 and wrote the NSC exam two years later) that is a major concern. Of all the students who enrolled for Grade 10 in 2011, only 40.2% passed Matric in 2013. Only 15.7% qualified for machelors programmes and only 13% passed maths. Put differently, of the 1.1 million students who enrolled for Grade 10 in 2011, only 172,000 qualified to study at university, which represents a “loss” of 922,000 learners. There is, however, a general improvement in this trend when the classes of 2009 and 2011 are compared (see Table 4.14). Table 4.14: Throughput, secondary education: 2009–2011 and 2011–2013 2009–2011

2011–2013

The grade 10 class of 2009 (number) 

The grade 10 class of 2011 (number)

Grade 10 enrolment 2009

987,680

Grade 10 enrolment 2011

Matric candidates 2011

496,090

Matric candidates 2013

562,112

Matric passes 2011

348,117

Matric passes 2013

439,779

Qualified for bachelors’ programmes 2011 Maths passes 2011

120,767 104,033

The grade 10 class of 2009 (% of total) Grade 10 enrolment 2009

  100.0%

Qualified for bachelors programmes 2013 Maths passes 2013 The grade 10 class of 2011 (% of total) Grade 10 enrolment 2011

1,094,189

171,755 142,666   100.0%

Matric candidates 2011

50.2%

Matric candidates 2013

51.4%

Matric passes 2011

35.2%

Matric passes 2013

40.2%

Qualified for bachelors’ programmes 2011 Maths passes 2011

12.2% 10.5%

Qualified for bachelors programmes 2013 Maths passes 2013

Sources: 2009 & 2011 data: South African Institute of Race Relations, 2012.329 2011 & 2013 data: South African Department of Basic Education, 2013.330

15.7% 13.0%

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4.3. Tertiary Education In 2012 there were 23 public Higher Education Institutions (HEIs) (i.e. universities and universities of technology); 21 Sector Education and Training Authorities (SETAs); and various public and private Further Education and Training (FET) colleges; private and public Adult Education and Training (AET) centres; and other institutions of higher education and training throughout South Africa.331 (See Table 4.15 and Figure 4.17.) Table 4.15: Distribution of the population attending post–secondary education (2010–2012)  

2010

Type of institution

2012

Total number

Student

Total number

Student

of institutions

enrolment

of institutions

enrolment

Public HEIs

23

892,936

23

953,373

Private HEIs

109

90,767

119

97,487

Public FET colleges

50

358,393

50

657,690

Private FET colleges

344

46,882

536

115,586

Public and private AET centres

3,083

297,491

330

315,068

Total

3,609

1,686,469

4,028

2,139,304

Sources: South African Department of Higher Education & Training, 2013,332 2014.333

Tertiary Education Distribution of Enrolments 22%

Public HEIs Private HEIs 2% 50%

Public FET colleges Private FET colleges

16%

Public and private AET centres Total

3% 0.4%

Sources: South African Department of Higher Education & Training, 2013,334 2014.335

Figure 4.17: Percentage distribution of enrolments for tertiary education by type of institution (2012)

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4.3.1. Higher Education – Universities Seven South African universities have been ranked on the Quacquarelli Symonds (QS) World University Rankings 2013,336 and four of these have been ranked on the Times Higher Education World University Rankings 2012–2013.337 See Table 4.16 below for the list of universities, their individual rankings and their overall score (where available). Table 4.16: South African universities ranked on the QS & Times Higher Education World University Rankings 2013

  University

Quacquarelli Symonds

Times Higher Education

Overall

Overall

Africa

Overall

Ranking

score

Ranking

score

University of Cape Town

145

60.50%

113

55.80%

University of the Witwatersrand

313

39.20%

226–250

–

Stellenbosch University

387

33.70%

251–275

–

University of Pretoria

471–480

–

–

–

University of KwaZulu-Natal

501–550

–

–

–

Rhodes University

551–600

–

–

–

University of Johannesburg

601–650

–

–

–

Sources: Quacquarelli Symonds, 2013338 & Times Higher Education, 2013.339

Quacquarelli Symonds’ website is accessible at: http:// www.topuniversities.com/qs–world–university– rankings. Times Higher Education’s website is accessible at: http://www.timeshighereducation.co.uk/world–

Ten of South Africa’s universities were

university–rankings/2012–13/world–ranking/region/

ranked under the top

africa.

20 African universities

Furthermore, ten of South Africa’s universities were

on the Ranking Web of

ranked under the top 20 African universities on the Ranking Web of Universities’ website, and these are indicated by rank in Table 4.17 below.340

Universities’ website.

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African Human Capital and Labour Report: SOUTH AFRICA

Table 4.17: South African universities ranked on the Ranking Web of Universities (2013)

Ranking –

Ranking –

Ranking –

South Africa

Africa

World

University

1

2

391

University of Cape Town

2

3

504

Stellenbosch University

3

4

549

University of Pretoria

4

5

632

University of KwaZulu-Natal

5

6

690

University of the Witwatersrand

6

7

885

University of the Western Cape

7

8

1060

Rhodes University

8

12

1306

University of South Africa

9

17

1594

University of Johannesburg

10

18

1689

North-West University

Source: The Ranking Web of Universities, 2013.341

4.3.2. Enrolments by Faculty of Study The total number of enrolments to all public HEIs has increased steadily over the period 2008 to 2012: from 799,400 in 2008 to 953,373 in 2012, an increase of 19.2%.342 In comparing the 2012 enrolment figures to the 2000 enrolment figures (556,700 in total) the growth rate was 71.25%.343 This was a substantial increase, which stretched the resources at most of the universities. (See Table 4.18 and Figure 4.18.) Table 4.18: Enrolments to public HEIs by attendance mode (2008 - 2012)

Mode

2008

2010

2012

Distance

310,270

347,177

387,134

Contact

489,220

545,759

566,239

Total

799,490

892,936

953,373

Source: South African Department of Higher Education and Training, 2014.344

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1,200,000

1,000,000

Actual numbers

800,000

Distance Contact Total

600,000

400,000

200,000

0 2008

2010 Year

2012

Source: South African Department of Higher Education and Training, 2014.345

Figure 4.18: Number of students enrolled to public HEIs by attendance mode (2008, 2010, 2012)

Enrolments to public HEIs by qualification level for 2007 to 2011 are reflected in Table 4.19. Although the number of students at tertiary level increased by 23.3% since 2007, and the postgraduate students (below masters) increased substantially by 61.8%, the masters and doctoral degree students increased by only 1.4% (see Table 4.20). Table 4.19: Enrolments to public HEIs by Qualification Type (2007–2011)

  Qualification type

2007 Enrolments

2011 % of total

Enrolments

% of total

Occasional students

*

*

23,536

2.5%

Undergraduate Certificates and diplomas

*

*

289,931

30.9%

646,765

85.0%

476,840

50.8%

Postgraduate (below masters level)

53,263

7.0%

86,188

9.2%

Masters and Doctors

60,872

8.0%

61,705

6.6%

760,900

100.0%

938,200

100.0%

Undergraduate degrees

Total

Sources: 2007 data: Centre for Higher Education and Transformation, 2013.346 2011 data: South African Department of Higher Education & Training, 2013.347 Note: *No distinction made in source document between undergraduates in certificate & diploma programmes and undergraduates in degree programmes.

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Public HEIs with a high percentage of postgraduate enrolments (up to masters level) are indicated in Table 4.20. Stellenbosch University, the University of Cape Town and University of the Witwatersrand have masters and doctorate enrolments in excess of 20% of the total enrolments. Table 4.20: Public HEIs where Masters and Doctorate level enrolments exceed 10% of all enrolments (2000–2011)

Institution

Qualification type

2000

2005

2011

University of the Witwatersrand

Masters and doctors

23%

23%

23%

Stellenbosh University

Masters and doctors

19%

22%

23%

University of Cape Town

Masters and doctors

20%

19%

20%

University of the Free State

Masters and doctors

17%

13%

9%

University of KwaZulu-Natal

Masters and doctors

12%

13%

13%

University of Limpopo

Masters and doctors

9%

11%

10%

University of Pretoria

Masters and doctors

14%

16%

14%

University of the Western Cape

Masters and doctors

12%

10%

11%

Rhodes University

Masters and doctors

10%

13%

16%

Sources: 2000–2005 data: Centre for Higher Education and Transformation, 2013.348 2011 data: South African Department of Higher Education & Training, 2013.349

Enrolments to public HEIs by faculty of study are indicated for 2000 and 2012 in Table 4.21. In analysing the data the following trends emerge: •

The percentage of students enrolled for Science and Technology decreased from 35% to 29% of the total between 2000 and 2012.

•

The students for Business and Management subjects more than doubled and the proportional percentage increased from 22% to 30%.

•

Students in the Humanities faculties decreased from 43% to 41% over the same period.

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Table 4.21: Enrolments to public HEIs by Faculty of Study (2000–2012)



2000

Field of Study

(000s)

2005 % of

(000s)

total

2010 % of

(000s)

2012 % of

total

(000s)

total

% of total

Science & technology

194,845

35%

249,900

34%

251,334

28.1%

273,282

29%

Business & management

122,474

22%

183,750

25%

278,843

31.2%

282,299

30%

Humanities

239,381

43%

301,350

41%

362,749

41%

397,792

41%

Head count

556,700

100%

735,000

100%

892,926

100%

953,373

100%

Sources: Centre for Higher Education and Transformation, 2013350 & South African Department of Higher Education and Training, 2014.351

The total number of graduates increased from 2000 (88,200 graduates)352 to 2011 (160,626 graduates).353 The number of graduates in undergraduate courses increased from 64,500 in 2000354 to 117,559 in 2011,355

There has been a steady

an increase of 82% since 2000. Likewise, there has

increase in the number

been a steady increase in the number of students graduating in postgraduate courses: from 23,700 in

of students graduating

2000356 to 43,067 in 2011,357 which also represents an

in postgraduate courses.

increase of 82% since 2000 (see Table 22 and Figure 4.19).

Table 4.22: Distribution of graduates by type of qualification (000s) (2000–2011)

Institution

Type of Qualification

2000

2005

2010

2011

All institutions

Actual graduates

88

120

154

161

All institutions

Undergraduates

65

88

113

118

All institutions

Postgraduates

24

32

40

43

Sources: 2000–2010 data: Centre for Higher Education and Transformation, 2013.358 2011 data: South African Department of Higher Education & Training, 2013.359

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African Human Capital and Labour Report: SOUTH AFRICA

180,000 160,000 140,000

Actual numbers

120,000

Undergraduates at

100,000

all public HEIs

Postgraduates Graduates at public

80,000

HEIs

60,000 40,000 20,000 0 2000

2001

2002

2003

2004

2005 2006 Year

2007

2008

2009

2010

2011

Sources: 2000–2010 data: Centre for Higher Education and Transformation, 2013.360 2011 data: South African Department of Higher Education & Training, 2013.361

Figure 4.19: Graduates at public HEIs (2000–2011)

Table 4.23 indicates the number of graduates by faculty of study at the 23 public HEIs for 2010 and 2011. The faculty of Science, Engineering and Technology had the highest number of graduates (46,100), followed by the faculty of Business and Management (44,155). Table 4.23: Graduates at public HEIs by Faculty of Study (2010–2011)

  Faculty of study

2010 Graduates

2011 % of total

Graduates

% of total

Science, Engineering & Tech

42,760

27.9%

46,100

28.7%

Business & Management

41,657

27.2%

44,155

27.5%

Education

37,892

24.7%

37,879

23.6%

All other Humanities & Social Sciences

31,016

20.2%

32,484

20.2%

153,325

100%

160,618

100%

Total

Sources: 2010 data: Centre for Higher Education Transformation, 2013.362 2011 data: South African Department of Higher Education & Training, 2013.363

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African Human Capital and Labour Report: SOUTH AFRICA

The average graduation rate in 2012 for doctoral students was 13%, for masters students it was 21% and for undergraduate degree and diploma students it was 15%. As can be expected, the success rates vary widely among the universities. The undergraduate success rate* of students in public HEIs was on average 80% for contact students and 68% for distance education. *The success rates definition as per the Department of Higher Education and Training is as follows: A calculation is made of Full-Time Equivalent (FTE) enrolled student totals for each category of courses. A further FTE calculation, using the same credit values, is made for each category of courses for those students who passed the courses. The success rates are then determined as FTE passes divided by FTE enrolments.364

4.3.3. Further Post-School Education Table 4.24 indicates the enrolments to public and private Further Education Training (FET) colleges for 2010 and 2012. The number of enrolments at private and public FET colleges increased significantly between 2010 and 2012. The Department of Higher Education and Training is working hard to offer a FET education as an alternative to a university qualification. The following investments have been made by the government to improve the FET sector:365 •

The FET funding increased from ZAR 3.9 billion in 2010 to ZAR 5.6 billion in 2013.

•

National Student Financial Aid Scheme (NSFAS) student bursary funding for TVET colleges increased from ZAR 318 million in 2010, benefitting 61,703 students.

•

Twelve TVET campuses have been selected for refurbishment or building of new structures.

•

ZAR 2.5 billion has been allocated by the National Skills Fund to TVET colleges to expand access and programmes offerings. This includes skills programmes and learnerships.

•

ZAR 2.8 billion has been allocated to TVET colleges aimed at increasing the student intake towards occupation-directed programmes within the TVET college sector.

•

The Minister of Higher Education and Training declared 2013 the “Year of the Artisan” to encourage students to enrol at FET colleges and acquire artisan skills to meet the South African economy’s skills requirements.

The government efforts are paying off: enrolments to public FET colleges increased by 83.5% and private FET colleges by 207.5%.

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African Human Capital and Labour Report: SOUTH AFRICA

Table 4.24: Enrolments to public and private FET colleges (2010 & 2012)

 

Public FET Colleges

Private FET Colleges

Indicator

2010

2012

2010*

2012**

Students

358,393

657,690

37,582

115,586

8,126

9,877

5,470

6,846

Lecturing Staff

Sources: 2010 data: South African Department of Higher Education & Training, 2013.366 2012 data: South African Department of Higher Education and Training, 2014.367 Notes: * There were 403 private FET colleges in South Africa, only 277 responded to the DHET survey. ** There were 536 private FET colleges in South Africa, only 220 responded to the DHET survey.

From Table 4.25 it is evident that the major discipline of study is Business, Commerce and Management Studies – contributing to 29% of all the enrolments. (More recent figures from Public FETs are not available.) Enrolments for the areas where there are critical shortages in the labour market are substantially lower, namely Manufacturing, Engineering and Technology (14.5%), as well as Physical, Mathematical, Computer and Life Sciences (3.7%). Table 4.25: Total enrolments to private FET colleges per occupational programme (2010 & 2012) Occupational Qualifications

2010

2012

Agriculture and Nature conservation

2,807

962

16,786

13,699

62

0

633

352

Education, Training and Development

2,683

4,714

Health Sciences and Social Services

2,432

9,232

Human and Social Studies

288

36

Law, Military Science and Security

324

532

3,265

6,836

243

961

Physical, Mathematical, Computer and Life Sciences

4,415

1,732

Services

3,644

8,100

37,582

47,156

Business, Commerce and Management Studies Communication Studies and Language Culture and Arts

Manufacturing, Engineering and Technology Physical Planning and Construction

Total

Sources: 2010 data: South African Department of Higher Education & Training, 2013.368 2012 data: South African Department of Higher Education and Training, 2014.369

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African Human Capital and Labour Report: SOUTH AFRICA

The overall pass rates at FET colleges are very low and dropping. In 2011 it was 50.4% decreasing to 36.7% in 2012.370 Table 4.26 shows the number of public and private FET college students, who entered, wrote and passed examinations in 2012. The number of students who passed is below 30% for all the qualifications. The success rate is extremely low and urgent attention should be devoted to improving students’ success rate. Table 4.26: Number of public and private FET college students who entered, wrote and passed examinations (2012)

Qualification/ Course

Number

Number

Number

Number passed

Success rate

entered

wrote

passed

as % of number

(number passed

wrote

as % of number entered)

NC(V) Levels 2-4 Report 191 (N1 – N3) Engineering studies Report 191 (N4 – N6) Engineering studies Report 191 (N4 – N6) Business studies

119,668

72,431

30,198

41.7%

25.2%

36,103

22,512

8,818

39.2%

24.4%

19,601

14,142

5,537

39.2%

28.3%

55,533

41,817

9,609

23%

17.3%

Source: South African Department of Higher Education and Training, 2014.371

Sector Education and Training Authorities (SETAs), which form an integral part of further education and training within the world of work, will be covered in Chapter 5, section 5.7.6

4.4. Quality of Higher Education and Training The low quality of the South African education system is a cause for concern. According to The African Competitiveness Report 2013, South Africa ranks 140th regarding the “quality of the education system”, and 143rd regarding the “quality of maths and science education” – and this is from a total of 144 countries.372 The Centre for Development & Enterprise (CDE) launched an investigation into the reasons for the poor quality of maths and science education in South African schools: one reason has to do with the level of teacher competency. They found that many of the Grade 9 teachers responsible for mathematics education in schools are inadequately trained to teach maths; however, when surveyed, 89% of them stated they felt highly confident in teaching maths. In other countries teachers stated much lower confidence in teaching maths than South African teachers, for instance in Finland (69%) and Japan (36%). In 2011 the Trends in International Mathematics and Science Study (TIMSS) showed that the majority of pupils in these countries, such as Finland and Japan, show adequate mastery of the calculations involved, compared to only 32% of South African pupils. Teacher competency (or lack thereof) combined with teacher complacency, has to be addressed.373

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African Human Capital and Labour Report: SOUTH AFRICA

Another reason for the poor performance in mathematics education is that there is a strong focus on the National Senior Certificate (NSC) exam results; therefore, pupils that are unlikely to pass in the NSC exam, are forced out of the education system in lower grades, and educators then focus on pupils that are likely to pass the NSC exam. CDE states that educators should, instead, focus their efforts on correcting learning deficiencies in lower grades, because these become far more difficult to correct in the higher grades.374 The country is highly ranked with regard to the “quality of management schools” (15th) and the “excellence of staff” (26th). It is of concern that South Africa ranks lower than Kenya and Nigeria with regard to “internet access in schools” (see Table 4.27).375 It should be noted that the surveys are related to a specific country and should be treated with caution. For instance, according to the survey results, South Africa scores far lower on the “availability of scientists and engineers” indicator than Nigeria and Kenya. In fact, South Africa has far more engineers than Nigeria and Kenya per capita. This discrepancy in the results could be explained by the fact that South Africa is experiencing a real shortage of engineers. Table 4.27: Quality of Higher Education and Training of South Africa compared to Nigeria and Kenya (2013)

  Indicator

South Africa

Nigeria

Kenya

Value

Rank/144

Value

Rank/144

Value

Rank/144

Secondary education enrolment, gross %*

93.8

53

44.0

120

60.2

108

Tertiary education enrolment, gross %*

15.4

101

10.3

111

4.0

130

Quality of the educational system

2.2

140

3.5

83

4.3

37

Quality of math and science education

2.0

143

3.6

92

3.9

76

Quality of management schools

5.3

15

3.9

86

4.3

56

Internet access in schools

3.1

111

3.5

99

3.8

85

4.4

51

4.2

68

4.3

64

4.6

26

4.1

57

3.9

70

Availability of research and training services Extent of staff training Source: World Economic Forum, 2013.376

Note: Values are on a 1-to-7 scale, unless otherwise indicated with an asterisk (*), with 7 being the most desirable.

4.5. Human Capital Development and Income Inequality In their article, Human Capital and Income Inequality: Some Facts and Some Puzzles, Castelló-Climent and Doménech posed the question why income inequality persists and even grows in the light of greater human capital equality.377 In other words, why has a reduction in human capital inequality, as measured in literacy rates, not been accompanied by declines in the income Gini coefficient?378

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African Human Capital and Labour Report: SOUTH AFRICA

The research findings from a sample of 144 countries for the period 1950–2010 are profound for policy makers: 1. The returns on education are convex: “The impact of the distribution of education on income inequality will depend not only on the size of the investments in education, but also on the rate of return of these investments”.

Contrary to previous commentators that returns decrease with the level of schooling, recent research evidence “shows that in many countries, the returns to education in the 1990s and 2000s are greater for higher education than for primary schooling”. The researchers further found that one year increment in university produces higher returns than on a one-year increase in primary school. They conclude that “increasing returns to education could be a general phenomenon across countries and further explaining the lack of correlation between human capital and income inequality worldwide”.379

2. Furthermore, globalisation and the arrival of skill-biased technological progress “have also increased wages at the top”. 380 On the whole their findings revealed that “the returns to tertiary education are higher than those of a secondary and primary schooling”. These findings are also consistent with a low quality education system at the lower levels of schooling, which may lead to higher literacy, but does not necessarily constitute to

The returns to tertiary

significant skill accumulation”. 381

education are higher

Eradicating illiteracy is very necessary to reduce

than those of a secondary

and eliminate human capital inequality; however, in order to address income inequality, investment

and primary schooling.

should focus on the quality of the education system in order to ensure a higher process through the system and ensure they qualify and are ready for tertiary education.382

4.6. Innovation in South Africa Innovation and the extent to which a country as a whole is regarded as being innovative is, to a great extent, a function of a country’s access to and availability of high quality human capital, especially in the scientific fields; and, in addition, the willingness of government and other institutions and organisations to invest in research and development (R&D).383 Apart from two indicators, namely “government procurement of advanced technical products” and “availability of scientists and engineers”, South Africa scores overall in the top 25% of the surveyed countries. Excluding the two indicators mentioned above, the country ranks much higher than both Kenya and Nigeria on all the other indicators (see Table 4.28).384

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African Human Capital and Labour Report: SOUTH AFRICA

Table 4.28: Innovation of South Africa compared to Nigeria and Kenya (2013)

 

South Africa

Innovation indicator

Value

Nigeria

Rank/144

Value

Kenya

Rank/144

Value

Rank/144

Capacity for innovation

3.5

41

3.2

63

3.5

46

Quality of scientific research institutions

4.6

34

3.2

97

4.0

50

Company spending on R&D

3.5

39

3.1

68

3.7

31

University–industry collaboration in R&D

4.5

30

3.5

72

4.2

41

3.1

105

3.6

64

3.5

76

Availability of scientists and engineers

3.4

122

4.1

68

4.1

66

PCT patents, applications/million pop.*

6.8

37

0.0

116

0.1

95

Gov’t procurement of advanced tech products

Source: World Economic Forum, 2013.385 Note: Values are on a 1-to-7 scale, unless otherwise indicated with an asterisk (*), with 7 being the most desirable.

4.7. Implications, Challenges and Recommendations South Africa has a general shortage of high level human capital, i.e. people with tertiary level qualifications. Only 3% or 1.4 million people are qualified as such. There is no short-term answer to this problem. It will take at least two decades to improve the ratio substantially, and then only if the education pipelines (throughput) are improved drastically. In the aftermath of 1994, the government faced tremendous backlogs and skewed allocations of resources. Addressing this challenge was a daunting task. Growth in enrolment rates increased substantially, thousands of classrooms were added and general access and throughput improved. The decrease in population growth now leads to a slower growth in primary and secondary enrolments. The emphasis can now shift to improving the quality of the education system, as well as improving the throughput of learners. Getting more students to qualify at tertiary level is of national priority— not only for future economic growth, but also to reduce income inequality. The reality is that South Africa faces a quantity as well as a quality challenge regarding education— especially where high level human capital development is concerned.

4.7.1. Quantity of Education Some of the strategies that could be considered to increase the quantity are: 1. Improve the throughput of learners in the school system in order for more learners to enter tertiary level. Strategies to improve the motivation of students and learners to continue and strive for higher quality should be developed and implemented.

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African Human Capital and Labour Report: SOUTH AFRICA

2. More opportunities should be created for learners who have dropped out of the system and who do not have a university exemption, to improve their existing qualifications in order to gain access to higher education.

Government can provide this for free or encourage the private sector to get involved. Providing vouchers to the students to pay for their education could be a strategy. Furthermore, an incentive scheme can be introduced for students to pass or improve existing standard levels. Critics will complain that it could be an expensive system. However, consider the adage of “the cost of acting is less than the cost of not acting”. Let us take the following example to explain this: A government under budgeting constraints in a high crime society/environment might decide not to spend further money on increasing the police force and/or to provide specialised on-going training. The outcome? Money is saved on the police force budget. However, society at large and government has to spend more on private security, short-term insurance, increased medical care and so on. A higher risk for the country could affect local and international investments and decreased tourism resulting in a lower economic growth rate (amongst others). The police force itself then experiences higher stress levels, more absenteeism and higher turnover. It is clear that in this example the cost of “not acting” far outweighs the “cost of acting”. This approach is valid in many societal choices and, definitely, also in the case of education.

3. The quantity of learners who pursue difficult subjects, such as mathematics and science, should be increased drastically. Part of the solution is improving the quality of maths and science teachers. 4. Another possibility is to increase the capacity of existing universities, especially for health sciences. It is more cost-effective to double the capacity than to start new medical schools and engineering faculties, for example. Public-private partnerships in order to expand the offering of higher education at university level could be pursued to alleviate the pressure from the government. Specialised universities or “Centres of Excellence” specialising in areas such as finance and banking, agriculture and/or mining could, for example, be created in partnership with the private sector. 5. The number of students enrolled at FET colleges have increased substantially to reach 773,276 in 2012. This represents a 91% growth since 2010. The 2012 figure represents about 81% of the total university enrolment figure. Although the Department of Higher Education and Training is implementing strategies to offer FET colleges as alternative educational institutions to universities, more will have to be done to improve the quality and image of the FETs. FETs should have more students than universities, especially in a country where there is a critical shortage of technical skills. 6. The overconcentration of enrolments in Business, Commerce and Management Studies (29% of total) is a concern. That proportion is more than Manufacturing, Engineering, Technology of Physics, Mathematical and Computer Sciences combined. The emphasis has to be on the difficult technical subjects and qualifications.

4.7.2. Quality of education The quality of education is a more important priority, as it determines a country’s overall competitiveness on the international stage. The quality of the South African education system is constantly being questioned in various circles, and the WEF ranks the quality of primary education towards the bottom when compared to 144 countries.

African Human Capital and Labour Report: SOUTH AFRICA

Also, South Africa ranks 140th regarding the “quality of the education system” and 143rd regarding the “quality of maths and science education”. When it comes to the “quality of management schools” and many other high level education and training of practices, such as medical doctors, accountants, and engineers for example, the quality is among the best in the world. Below are some strategies that could be considered to improve the quality: 1. The quality and motivation of teachers have to be improved. Similarly, the management and operational skills in the education system should be upgraded and must be managed in terms of sound performance management skills. 2. In the primary schools, the teacher-pupil ratio has to be improved to between 25 and 30 learners per teacher. Most of the school children do not have resources, such as internet, at home. Therefore teachers have to be the “resource”. Lower ratios then become important. 3. Schools should provide better learning resources, such as internet connections and libraries, to the learners. The resources must be available for extended hours for learners to access. 4. Improve maths and science education, not only by upgrading the skills and knowledge of teachers, but also by utilising technologies, such as video and internet, and by bringing subject experts to rural areas — especially where quality is lacking. 5. Similar to many countries in the world, the government can create and build science parks which learners can visit. This could have a tremendous educational and motivational impact. Private sector involvement and sponsorships are important for this type of project. 6. At tertiary level only four South African universities are among the top 500 in the world, with UCT at 145th having the highest ranking. It is clear that South Africa’s university education sector is by far the most advanced in Africa: ten of the top 20 universities in Africa are located in South Africa. Having said this, more can still be done to improve the quality of South African universities, especially the bottom ten. Firstly, a government-sponsored programme should be considered to upgrade academic staff so that all lecturers and researchers obtain a PhD or equivalent qualification before a certain date. This can perhaps be achieved by providing an incentive to obtain the qualifications within a certain period, and offering the best candidates opportunities to further their research at some of the best universities in the world. Secondly, the upgrading programme should take place within the reality that South Africa has vast developmental priorities and problems, similar to the remainder of Africa. Thirdly, there should be more collaboration with the leading universities in the world, as well as within the continent. This could also be extended to companies in Africa, as well as multinationals that are searching for new opportunities. 7. More students need to advance their studies to masters and doctoral degree levels. In this regard the top ten universities will have to increase their capacity to accommodate more postgraduate students, as these universities are the first option for most students planning to further their studies. 8. The number of students at universities increased by almost 70% in just over a decade. At the same time many universities went through tremendous restructuring processes when merging with the former technicons. Against this background and challenges, the higher education sector performed

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remarkably well. It is, however, a reality that with such an increase in quantity it is difficult to maintain or improve quality. Innovative solutions need to be pursued to improve quality further in the light of growing numbers: for example, online and e-learning options should be considered and implemented more vigorously. Also, students could be offered on-line qualifications at selected international universities on the same financial model which applies to local university students. 9. A major concern is the drop in the proportion of students who are studying towards Science, Maths, Technology and Engineering degrees, which has decreased from 35% to 29% since 2000. This trend is obviously also an outcome of the present schooling system. The private sector and government enterprises should play a bigger role in this instance. More can be done by employers to “market” careers in this field and make it more attractive for prospective students, take initiatives to provide bridging/extra programmes to prepare prospective students, (winter and summer schools during school holidays) and provide more financial resources through bursaries. The “acting/not-acting” principle is again very relevant here. Organisations will pay a substantial premium for talent in these disciplines if they do not take a more strategic medium to long-term approach in the near future. 10. The quality of pass rates has to be addressed at FET colleges: pass rates at private FETs range from 23% to 42%. That is based on the number of students who wrote as opposed to those who enrolled. The success rate of those who enrolled fluctuates between 17% and 28%. Similarly, the standard of the lecturers has to be addressed. The Department of Education has an extensive programme to upgrade the facilities, increase bursaries and attract additional students; likewise the quality and performance of the academic staff in general should be upgraded as a matter of urgency.

The private sector can also contribute more extensively in enhancing collaboration with FETs in their vicinities.

African Human Capital and Labour Report: SOUTH AFRICA

5

The Labour Market In South Africa the working age population (15–64 year age population) increased from 32 million in 2008 to 35.2 million in 2014, an increase of 10% from 2008.

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5.

The Labour Market

5.1. Economically Active Population The economically active population (EAP) of a country is defined by the International Labour Organization as people aged 15 and older who provide labour in the production of goods and services during a specified time period. It includes the employed and the unemployed, but excludes homemakers, unpaid caregivers or workers in the informal sector. The definition also mostly includes the armed forces and seasonal or part time workers.386 In South Africa the working age population (15–64 year age population) increased from 32 million in 2008 to 35.2 million in 2014, an increase of 10% from 2008. Females outnumber males in this age group: 17.9 million females and 17.3 million males in 2014.387 (See Table 5.1 and Figure 5.1 below.) Table 5.1: Working age population (15–64 years) (000s) (2008–2014)

Gender

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Both genders

31,987

32,584

33,184

33,792

34,405

35,022

35,177

Females

16,433

16,703

16,974

17,248

17,527

17,808

17,879

Males

15,554

15,881

16,210

16,544

16,878

17,214

17,298

Thousands

Source: Statistics South Africa, 2014.388 19 18 18

(000s)

17 17

Females

Males

16 16 15 15 14 Q4 2008

Q4 2013 Quarter

Source: Statistics South Africa, 2014.389

Figure 5.1: Working age population (15-64) by gender (000s) (2008-2014)

The distribution of the working age population by race is as follows: in 2008 it was 77.62% for Africans/ Blacks, and in 2014 it was 79% of this group. In 2008 Whites were 10%, and in 2014 they were 8.9% of the total; Coloureds were 9.3% of the total, and Indians/ Asians were 2.7%.390 (See Table 5.2 and Figure 5.2 below.)

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Table 5.2: Working age population by race (15–64 years) (000s) (2008–2014)

Population group

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

All population groups

31,987

32,584

33,184

33,792

34,405

35,022

35,177

Black/African

24,830

25,382

25,941

26,512

27,092

27,679

27,827

3,007

3,060

3,112

3,163

3,212

3,259

3,270

888

903

917

930

943

956

959

3,262

3,239

3,214

3,187

3,158

3,128

3,120

Coloured Indian/Asian White

Thousands

Source: Statistics South Africa, 2014.391

30

25

20

(000s)

Black/African Coloured

15

White Indian/Asian

10

5

0 Q4 2008

Q4 2009

Q4 2010

Q4 2011 Quarter

Q4 2012

Q4 2013

Q1 2014

Source: Statistics South Africa, 2014.392

Figure 5.2: Working age population (15-64) by race (000s) (2008-2014)

The majority of the working age group live in Gauteng (9.25 million); followed by KwaZulu-Natal (6.6 million) and the Western Cape (4.15 million). The Eastern Cape had 4 million; Limpopo 3.5 million and Mpumalanga 2.7 million. Gauteng had the highest percentage increase of all provinces from 2008 to 2014, i.e. a 12.7% increase, and the Free State had the lowest, i.e. 3.5%.393 (See Table 5.3.)

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Table 5.3: Working age population by province (15–64 years) (000s) (2008–2014)

Province

Q4 2008

Q4 2010

Q4 2012

Q1 2014

Gauteng

8,206

8,581

8,981

9,249

KwaZulu-Natal

6,065

6,262

6,456

6,572

Western Cape

3,701

3,865

4,040

4,153

Eastern Cape

3,836

3,935

4,021

4,065

Limpopo

3,118

3,266

3,402

3,482

Mpumalanga

2,411

2,512

2,616

2,683

North West

2,156

2,231

2,313

2,367

Free State

1,790

1,811

1,835

1,852

704

722

741

754

31,987

33,184

34,405

35,177

Northern Cape South Africa

Source: Statistics South Africa, 2014.394

Statistics South Africa differentiates between a person’s employment status as employee/employer/own account worker or unpaid household member.395 Employees are the majority group in the labour force, i.e. 86.16% (13.04 million), up from 84.3% in 2008. A real concern is that employers and own account workers, who form the backbone of entrepreneurs, decreased from 2.19 million in 2008 to 1.94 million in 2014, representing a decrease of 250,000. 396 (See Table 5.4 below.) Table 5.4: Employment status of the employed (000s) (2008–2014)

Employment status

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Employee

12,456

11,836

11,693

12,187

12,313

13,036

13,035

Employer

850

728

791

741

745

780

740

1,344

1,287

1,310

1,302

1,381

1,256

1,199

119

122

104

107

86

104

80

14,769

13,973

13,898

14,336

14,524

15,177

15,055

Own–account worker Unpaid household member Total

Source: Statistics South Africa, 2014.397

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The number of economically inactive people has increased from 13.1 million in 2008 to 15 million in 2014, an increase of 14% since 2008. The group is made up of students (41.2%); home-makers (18.8%); those who cannot work due to illness or disability (11.11%); those who view themselves as too young or too old to work (8%); discouraged work seekers (15.6%); and those with other reasons not listed in the survey (5%).398 (See Table 5.5 below.) Table 5.5: Characteristics of the economically inactive (000s) (2008–2014)

Characteristic

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Student

5,716

5,868

6,100

6,112

6,186

6,249

6,201

Home–maker

2,641

2,788

2,969

2,886

2,895

2,863

2,830

Illness/Disability

1,844

1,842

1,837

1,673

1,759

1,734

1,673

Too old/young to work

1,004

1,100

1,135

1,210

1,211

1,204

1,210

1,189

1,726

2,176

2,339

2,301

2,200

2,355

776

858

701

769

820

765

786

13,170

14,182

14,918

14,988

15,172

15,015

15,055

Discouraged work seekers Other Total

Source: Statistics South Africa, 2014. 399

5.2. Employment by Industry Sectors The distribution of the labour force by broad sector of the economy is as follows: In 2008, 69.25% of the labour force was employed in the formal sector, and in 2014 this percentage increased to 71.6%, i.e. 10.8 million. Formal sector employment is high in comparison to other sub–Saharan African countries, which shows the level of economic sophistication South Africa has already achieved. In Ghana, the formal sector only employed 14.5% of the total labour force (2010)400 and in Tanzania 6.7% (2012).401 Another 15.56% works in the informal sector (2.4 million). In 2008, 9.3% was employed in private households, and in 2014 this decreased to 8.8% (1.2 million). Only 5.46% of the labour force was employed in agriculture in 2008, and this had further decreased to 4.71% in 2013 (see Table 5.6). 402 The labour force involved in agriculture is low in comparison to other sub-Saharan African countries, such as Ghana (52% in 2013); Nigeria (30.57% in 2010); and Tanzania (79% in 2013).403 (See the Africa Human Capital and Labour Report: Ghana, Africa Human Capital and Labour Report: Nigeria or Africa Human Capital and Labour Report: Tanzania for more specific details.) There has also been a marked decrease in the number of agriculture labourers in South Africa: from 807,000 (2008) to 709,000 (2014), which represents a decrease of 12.14% since 2008. 404

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Table 5.6: Employment by sector (000s) (2008–2014)

Sector

Q4

Q4

Q4

Q4

Q4

Q4

Q1

2008

2009

2010

2011

2012

2013

2014

Formal sector (Non–agricultural) Informal sector (Non–agricultural) Agriculture Private households

10,221

9,844

9,720

10,210

10,266

10,773

10,780

2,365

2,249

2,317

2,232

2,351

2,446

2,336

807

647

649

671

718

713

709

1,376

1,232

1,212

1,224

1,189

1,244

1,231

Source: Statistics South Africa, 2014.405

Community and social services is the biggest employer with 3.4 million employees or 22.8% of the total formal employment sector. In 2008 Trade was the biggest employment sector with 22.6%, decreasing to 21.2% in 2014.

Utilities showed

Since 2008 Community and social services increased

the largest growth

by 21.1%. This rate of employment is faster than

percentage which is

the rate of overall employment, i.e. 1.9%. The following industries have shed jobs since 2008: Trade,

probably a function of

Manufacturing, Private households, Construction

the expansion of Eskom

and Agriculture. Finance (15.6%), Transport (7.8%), Mining (21.5%) and Utilities (38%) increased job

and other utilities.

growth-rates. Utilities showed the largest growth percentage which is probably a function of the expansion of Eskom and other utilities. The growth in Finance and related jobs is mainly due to private security employment, as well as employment agencies and labour broking over this period. The biggest concern is the Manufacturing industry that lost 293,000 (14%) jobs over the period, mainly as a result of the South African manufacturing sector being less competitive internationally and a slowdown in the world economy. (See Table 5.7 and Figure 5.3). Table 5.7: Distribution of the labour force by industry (000s) (2008–2014)

Industry Community and social

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

2,831

2,807

2,985

3,100

3,251

3,470

3,428

Trade

3,335

3,079

3,126

3,198

3,108

3,224

3,186

Finance

1,769

1,909

1,700

1,846

1,950

2,037

2,045

services

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Industry

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Manufacturing

2,097

1,886

1,889

1,909

1,814

1,766

1,804

Private households

1,376

1,232

1,212

1,224

1,189

1,244

1,231

Construction

1,276

1,177

1,115

1,105

1,132

1,204

1,199

Transport

830

801

805

839

877

961

895

Agriculture

807

647

649

671

718

713

709

Mining

349

322

321

352

380

426

424

Utilities

94

109

96

86

102

127

130

5

4

1

6

2

3

3

14,769

13,973

13,898

14,336

14,524

15,177

15,055

Other Total

Source: Statistics South Africa, 2014.406 100%

90%

80%

1% 2%

1% 3%

5%

5%

6%

6%

9%

8%

9%

8%

70% 12% 60%

14%

Utilities Mining Agriculture Transport Construction

14%

50% 12%

Manufacturing Finance

40% 21% 30%

Private households

23%

Trade Community and social services

20%

10%

19%

23%

0% Q4 2008

Q1 2014

Source: Statistics South Africa, 2014. 407

Figure 5.3: Distribution of the labour force by industry (%) (2008,2014)

Gender representation varies considerably by industry. Females are overrepresented as employees in Community and social services (60% females to 40% males), and Private households (currently 79% females and 21% males). They are underrepresented in the Mining industry (17% females and 83% males) and the Construction industry (12% females and 88% males).408 (See Table 5.8.)

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Table 5.8: Comparative data: Distribution of the labour force by gender and industry (000s) (2008–2014)

Q4 2008

  Industry

Males

Q4 2013

Females

Males

Q1 2014

Females

Males

Females

Trade

1,679

1,656

1,643

1,582

1,629

1,558

Community and social services

1,202

1,630

1,405

2,065

1,381

2,047

Manufacturing

1,483

615

1,197

569

1,225

579

970

799

1,199

839

1,184

861

1,161

115

1,061

143

1,058

141

Transport

685

146

796

165

719

176

Agriculture

563

244

503

210

496

212

Mining

306

44

369

57

354

70

Private households

292

1,084

241

1,004

254

977

67

28

92

35

101

28

3

2

1

2

1

2

8,408

6,361

8,507

6,670

8,402

6,653

Finance Construction

Utilities Other Total Source: Statistics South Africa, 2014. 409

5.2.1. Sectoral Changes in Employment A different perspective is to view and analyse the changes in terms of the primary, secondary and tertiary sectors and the contribution of each to employment. The South African employment sector has undergone structural changes over the last decade. It is clear from Table 5.9 below that the primary sector (Agriculture and Mining) shed 719,232 jobs in the 11-year period from 2001 to 2012. The employment share of the total employed in Agriculture dropped from 10.5% to 4.8%, and in Mining from 5.0% to 2.6%.410 The secondary sector created 537,376 jobs, with Construction growing by 414,453 and increasing its share of total employed from 5.7% to 7.7%. Manufacturing and Utilities showed little growth with 112,149 and 10,774 respectively. The tertiary sector is the only sector which showed substantial growth. The Community services (90% public sector) grew by 1.04 million, increasing its share of total employment from 17.8% to 22.2%. The Financial services sector grew by 782,108 employees, increasing the employment share from 9.3% to 13.3%. Bhorat, Goga, Stanwix & Labour Market Intelligence Partnership (LMIP) indicate, however, that the increase is mainly due to an increase in security services, labour broking and employment agency activities.411

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Table 5.9: Growth in employment by, sector (2001–2012)

  Industry

Growth (2001–2012) Absolute

Notes

Employment shares 2001

2012

Primary

–719,232

*

15.50%

7.40%

Agriculture

–514,468

*

10.50%

4.80%

Mining

–204,764

*

5.00%

2.60%

Secondary

537,376

*

21.00%

21.10%

Manufacturing

112,149

14.50%

12.70%

10,774

0.80%

0.80%

Utilities Construction

414,453

*

5.70%

7.70%

2,720,821

*

63.10%

71.50%

Trade

513,572

*

21.90%

21.70%

Transport

288,364

*

4.90%

6.10%

Financial services

782,108

*

9.30%

13.30%

Business activities NEC

502,841

3.60%

6.60%

Other

279,267

5.70%

6.70%

17.80%

22.20%

9.20%

8.30%

100.00%

100.00%

Tertiary

Community services Private households Total

1,041,524

*

95,253 2,497,763

*

Source: Bhorat, H.; Goga, S.; Stanwix, B. & Labour Market Intelligence Partnership (LMIP), 2013.412 Notes: 1. Relative growth is calculated by dividing the average annual growth rate for the sector by the total average annual growth rate. 2. *denotes a significant change at the 5% level; we were unable to ascertain whether the changes in employment of sub-sectors within financial services were significant. 3. The share of change is calculated by dividing change in employment in the sector by the overall change in employment.413

5.2.2. Employment by Occupation The largest section of the labour force is employed in elementary occupations: in 2008 it was 22% (3.2 million) and in 2014 it was 21.9% (3.3 million). Managers formed 7.89% of the labour force in 2008 (1.16 million), and in 2014 formed 8.9% (1.34 million people). In 2008 those with Professional occupations constituted 5% of the labour force, and in 2014, 5.82%.414 It is a concern that both the Technician and

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Plant and machine operator categories declined since 2008. This is an indication that the manufacturing sector is shrinking in terms of employment creation (see Table 5.10 and Figure 5.4). Table 5.10: Employment by occupation (000s) (2008–2014) Occupation

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

1,166

1,065

1,184

1,189

1,152

1,230

1,343

807

701

802

792

861

893

877

Technician

1,615

1,629

1,559

1,598

1,609

1,637

1,581

Clerk

1,523

1,566

1,502

1,599

1,546

1,624

1,610

Sales and service

1,828

1,978

2,000

2,064

2,123

2,298

2,282

115

89

74

73

63

75

65

2,034

1,688

1,659

1,742

1,773

1,847

1,736

1,313

1,203

1,205

1,200

1,222

1,251

1,264

Elementary

3,269

3,086

2,964

3,116

3,216

3,310

3,298

Domestic worker

1,097

969

947

964

958

1,012

999

14,769

13,973

13,898

14,336

14,524

15,177

15,055

Manager Professional

Skilled agriculture Craft and related trades Plant and machine operator

Both genders

Source: Statistics South Africa, 2014. 415 100%

1% 5%

0.4% 6%

90%

7%

7%

9%

8%

8%

9%

10%

11%

11%

11%

80%

60%

14%

12%

12%

15%

Manager Technician Craft and related trades Sales and service Elementary

20%

10%

Plant and machine operator Clerk

50%

30%

Professional Domestic worker

70%

40%

Skilled agriculture

22%

22%

Q4 2008

Q1 2014

0%

Source: Statistics South Africa, 2014.416

Figure 5.4: Distribution of the employed by occupation (%) (2008, 2014)

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African Human Capital and Labour Report: SOUTH AFRICA

Many adults in the EAP are also actively involved in non-market activities aimed at ensuring continuity of life for the person and their dependants. These activities include the fetching of water for home use; the collection of wood or dung for cooking fuel; hunting or fishing for household use; subsistence farming; construction or repairs to one’s house; or the production of other goods for household use. These activities are mainly concentrated in the rural areas. Subsistence farming forms a substantial group with 1.4 million people involved in 2008. The involvement in subsistence farming increased to 1.88 million (a 30% growth) in 2010, but decreased by 100,000 in 2014. Table 5.11 below provides an overview of the 15–64 population’s involvement in non-market activities. Table 5.11: Involvement in non–market activities and labour market status (000s) (2008–2014)

Activity

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

1,443

1,483

1,878

1,767

1,800

1,579

1,789

3,094

2,793

4,187

4,058

3,877

4,335

4,059

49

53

176

167

86

100

112

258

130

328

324

213

301

287

24

23

53

44

38

14

44

3,848

3,639

5,239

5,070

5,033

5,291

5,194

–

–

1,093

1,187

1,171

1,381

1,339

661

599

621

597

650

592

608

3,188

3,040

3,525

3,286

3,211

3,318

3,247

Non–market activity Subsistence farming Fetching water or collecting wood/dung Produce other goods for household use Construction or major repairs to own or household Hunting or fishing for household use Involvement in at least one activity Employed Unemployed Not economically active Source: Statistics South Africa, 2014.417

5.3. Employment and Unemployment Trends Table 5.12 below indicates the distribution of people in the 15–64 year age population according to whether they are employed, unemployed or economically inactive. The number of employed people has decreased from 14.7 million (2008) to 13.9 million (2010). The sharp decrease was mainly due to the impact of the “Great Recession”. It has increased to 15.05 million in 2014, which represents a 1.9% increase from 2008. The number of unemployed people has increased from 4.04 million in 2008 to 5.1 million in 2014, an increase of 25.2%. In 2008 the number of economically inactive people was 13.17 million, and in

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African Human Capital and Labour Report: SOUTH AFRICA

2014, it was 15.06 million, an increase of 14.3%. 418 The number of discouraged work seekers has virtually doubled from 2008 to 2014: from 1.19 million to 2.36 million.419 (See Figures 5.5.) Table 5.12: Distribution of the working age population: Economically active/Economically inactive (000s) (2008– 2014)

Indicator

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Population 15–64 yrs.

31,987

32,584

33,184

33,792

34,405

35,022

35,177

Labour Force/EAP

18,817

18,402

18,266

18,804

19,233

20,007

20,122

Employed

14,769

13,973

13,898

14,336

14,524

15,177

15,055

4,048

4,429

4,368

4,467

4,709

4,830

5,067

13,170

14,182

14,918

14,988

15,172

15,015

15,055

1,189

1,726

2,176

2,339

2,301

2,200

2,355

11,982

12,456

12,742

12,650

12,870

12,815

12,700

Unemployed Economically inactive Discouraged work–seekers Other (economically inactive) Source: Statistics South Africa, 2014.420

Economically Active Working Population Economically active – Employed 36% 43%

Economically active – Unemployed Economically inactive – Discouraged work–seekers Economically inactive – Other(economically inactive)

7% 14%

Source: Statistics South Africa, 2014. 421

Figure 5.5: Distribution of the working age population (15-64): Economically active/inactive (Q1 2014)

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5.3.1. Absorption and Participation Rates The employed to population absorption ratio shows a decline over the period 2008 to 2014, from 46.2% to 42.8% in 2013, a decline of 6.27% from 2008. Likewise, the labour force participation rates have also declined in the period 2008—2014: from 58.8 % to 57.2% in 2013. 422 (See Table 5.13 and Figure 5.6 below.) Table 5.13: Absorption & Participation rates (%) (2008–2014) Rates %

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

46.2

42.9

41.9

42.4

42.2

43.3

42.8

58.8

56.5

55.0

55.6

55.9

57.1

57.2

Employed/population ratio (Absorption) Labour force participation rate

Source: Statistics South Africa, 2014. 423

70

Percentage of total labour force

60

50

Employed/

40

population ratio (Absorption)

30

Labour force participation rate

20

10

0 Q4 2008

Q4 2009

Q4 2010

Q4 2011 Quarter

Q4 2012

Q4 2013

Q1 2014

Source: Statistics South Africa, 2014. 424

Figure 5.6: Absorption & participation rates (%) (2008–2014)

5.3.2. Hours Worked Table 5.14 shows the distribution of work hours for the employed part of the labour force over the period 2008—2014. A regular workweek in South Africa equals 40–45 hours per week, as regulated by the Basic Conditions of Employment Act (BCEA). The majority of the labour force worked regular hours, i.e. 8.51 million in 2014. A further 29.1% (4.3million) worked 45 hours or more per week. The remaining 15.25% of the work force worked less than 40 hours per week. It is evident that there is a trend of fewer people working more than 45 hours per week: 32.3% in 2008 decreasing to 28.8% in 2014.425 The reason for this could be the slowing down of the economy since 2008 with less overtime pressures and opportunities; greater appreciation for work-life balance and/or less demand in the economy for longer hours.

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Table 5.14: Employed persons’ hours of work per week (000s) (2008–2014) Total hours per week

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Works 15 hours or < per week

302

265

255

250

270

326

294

Works 15–29 hours per week

801

866

817

814

870

944

863

Works 30–39 hours per week

1,101

992

1,030

994

1,008

1,101

1,077

Works 40–45 hours per week

7,797

7,364

7,519

7,916

7,928

8,386

8,514

Works 45 hours or > per week

4,768

4,485

4,278

4,361

4,448

4,418

4,305

Source: Statistics South Africa, 2014.426

5.3.3. Unemployment From Table 5.15 below it is evident that the unemployment rate increased from 21.5% in 2008 (Q4) to 25.2% in 2014 (Q1). The actual number increased by just over 1 million. If the expanded

The unemployment

definition of unemployment is used, the situation is

rate increased from

even worse: increasing from 28.7% in 2008 (Q4) to

21.5% in 2008 (Q4) to

35.1% 2014 (Q1) – an increase of 1.66 million, bringing the total to 7.06 million.427 The expanded definition

25.2% in 2014 (Q1).

of employment includes people who had stopped looking for work, according to Trading Economics.428 (Also see Figure 5.7.)

Table 5.15: Unemployment figures (000s) and unemployment rate (2008–2014) Both genders

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Labour force

18,817

18,402

18,266

18,804

19,233

20,007

20,122

Unemployed

4,048

4,429

4,368

4,467

4,709

4,830

5,067

21.5

24.1

23.9

23.8

24.5

24.1

25.2

28.7

33.6

35.2

34.8

35.1

34.0

35.1

Official unemployment rate % Unemployment rate (Expanded definition) Source: Statistics South Africa, 2014.429

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40

35

Percentage of labour force

30

Official

25

Unemployment rate %

20

Unemployment, rate (Expanded definition

15

10

5

0 Q4 2008

Q4 2009

Q4 2010

Q4 2011 Quarter

Q4 2012

Q4 2013

Q1 2014

Source: Statistics South Africa, 2014. 430

Figure 5.7: Unemployment rate: Official & expanded definition (%) (2008–2014)

Table 5.16 indicates the distribution of the unemployed by population group. Eighty six percent of the total unemployed are African/Black. This is slightly down since 2008 when the percentage was 87.2%. Table 5.16: Distribution of the unemployed by population group (000s) (Q1 2008 & Q1 2014)

Population group

Q1 2008

African/Black Coloured Indian/Asian White Total

Q1 2014

3,812

4,358

375

499

62

70

122

139

4,371

5,067

Source: Statistics South Africa, 2014. 431

More than 3.3 million people fall into the long-term unemployment (1 year or more) category (2014 Q1), which is 66% of the total unemployed (see Table 5.17 and Figure 5.8). 432 This increased from 61.8% in 2008 by 840,000.

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Table 5.17: Duration of unemployment: Long/Short term (000s) & percentage of labour force and the unemployed (2008–2014).

Indicator

Unemployed

Q4

Q4

Q4

Q4

Q4

Q4

Q1

2008

2009

2010

2011

2012

2013

2014

4,048

4,429

4,368

4,467

4,709

4,830

5,067

2,502

2,655

2,989

3,036

3,212

3,207

3,342

1,546

1,774

1,379

1,432

1,498

1,623

1,725

Proportion of the labour force (%)

13.3

14.4

16.4

16.1

16.7

16.0

16.6

Proportion of the unemployed (%)

61.8

59.9

68.4

68.0

68.2

66.4

66.0

Long–term unemployment (1 year and more) Short–term unemployment (less than 1 year) Long–term unemployment (%)

Source: Statistics South Africa, 2014.433 4,000

3,500

3,000

Long-term

(000s)

2,500

unemployment (1 year and more)

2,000

Short-term unemployment (less than 1 year)

1,500

1,000

500

Q4 2008

Q4 2009

Q4 2010

Q4 2011 Year

Q4 2012

Q4 2013

Q1 2014

Source: Statistics South Africa, 2014.434

Figure 5.8: Duration of unemployment (000s) (2008–2014)

What is concerning, is the fact that the youth (15–24 years) is particularly hard hit by the lack of job opportunities. This age group now has an unemployment rate of 53.2%, an absorption rate of only 12% with a labour force participation rate of only 25.6%. Contrast this with the 25–64 years group, where unemployment is 21%, the absorption rate is 55.4%, and the labour force participation rate is 70.2%.435 (See Table 5.18 and Figure 5.9.) Furthermore, 89.1% of the unemployed without work experience is made up by the youth, of which 26.6% live in households where no one is employed, and a further 39.7% live in households where one person is employed (see Table 5.19). 436

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Table 5.18: EAP split according to age groups: (15–64); (15–24) & (25–64)

Age group

Q1 2013

Q4 2013

Q1 2014

15–64 years Population 15–64 yrs.

34,558

35,022

35,177

Labour Force

19,420

20,007

20,122

Employed

14,558

15,177

15,055

4,862

4,830

5,067

15,138

15,015

15,055

Unemployment rate

25.0

24.1

25.2

Employed/population ratio (Absorption)

42.1

43.3

42.8

Labour force participation rate

56.2

57.1

57.2

10,176

10,225

10,239

Labour Force

2,618

2,604

2,617

Employed

1,224

1,330

1,226

Unemployed

1,395

1,274

1,391

Economically inactive

7,558

7,620

7,622

Unemployment rate

53.3

48.9

53.2

Employed/population ratio (Absorption)

12.0

13.0

12.0

Labour force participation rate

25.7

25.5

25.6

Population 25–64 yrs

24,382

24,797

24,938

Labour Force

16,802

17,403

17,505

Employed

13,335

13,846

13,829

Unemployed

3,467

3,556

3,676

Economically inactive

7,580

7,394

7,433

Unemployment rate

20.6

20.4

21.0

Employed/population ratio (Absorption)

54.7

55.8

55.4

Labour force participation rate

68.9

70.0

70.2

Unemployed Economically inactive Rates (%)

15–24 years Population 15–24 yrs

Rates (%)

25–64 years

Rates (%)

Source: Statistics South Africa, 2014. 437

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100 90 80

Percentage of total

70 60 50

Q1 2014

40 30 20 10 0 15–24 years

25–64 years

Absorption rate

15–24 years

25–64 years

Participation rate Indicators and age groups

15–24 years

25–64 years

Unemployment rate

Source: Statistics South Africa, 2014. 438

Figure 5.9: Comparison of 15-24 and 25-64 age group: Various indicators (Q1 2013 & Q1 2014) Table 5.19: Distribution of youth (15–34 years) by employment status of household members (2008–2014)

Employment status

2008

2011

2014

No one employed

4,271

5,299

5,188

1 person employed

7,043

7,505

7,743

2 people employed

4,522

4,444

4,618

3 people employed

1,560

1,140

1,381

4 people employed

590

313

438

5 people employed

139

80

104

6 people employed

67

38

26

7 people employed

11

6

0

8 people employed

6

0

7

Youth aged 15–34 yrs

18,209

18,825

19,505

% no one employed

23.5%

28.1%

26.6%

Source: Statistics South Africa, 2014.439

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5.3.4. Economic Growth and Job Creation The South African labour market has undergone structural changes since the 1970s in the sense that the economy moved up the value chain – from a primary economy to a secondary and a tertiary economy. The result is an increased demand for more skilled and highly skilled labour. At the same time, the economy became more skills based due to technological advances and innovations. Consequently, the primary sector shrank and shed jobs rapidly.440 Bhorat et al. state that “while the tertiary sector has been growing and absorbing greater employment, its ratio of skilled workers relative to unskilled workers continues to increase.”441 Table 5.20 shows that employment elasticity for the 2001–2007 period was 0.64, meaning that for every 1% growth in GDP, total employment increased by 0.64%. Since 2009 (the post-crisis period) the situation has changed radically. Now a 1% increase in GDP leads to a 0.16% decline in employment.442 Whereas GDP growth bounced back quickly after the crisis, the demand for labour did not. Table 5.20: Simple GDP elasticity of total employment (2001–2012)

  Indicator

 

Average annual growth Employment

GDP

Simple elasticity

Pre-crisis (2001–2007)

2.90%

4.60%

0.64

Post-crisis (2008–2012)

–0.30%

1.90%

–0.16

Source: Bhorat, H.; Goga, S.; Stanwix, B. & LMIP. 2013.443 Notes: 1. The growth rates are average annual growth rates. 2. The simple elasticity is the employment growth rate divided by the GDP growth rate. 3. The September round of the LFS is used for the 2001 and 2007 data, while Q3 data from the QLFS is used for 2008 and 2012 data.444

It is clear that the economy will have to grow well in excess of 4% to generate a decent growth in employment (see Table 5.21).

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Table 5.21: Gross Value-Added Growth and Employment Growth

Industry

Average annual gross

Average annual

value-added growth

employment growth

Mining

–0.30%

–4.10%

Agriculture

2.20%

–5.10%

Construction

7.20%

4.70%

Financial Services

5.40%

5.30%

Trade

2.40%

0.60%

Community Services

3.10%

3.00%

Manufacturing

3.60%

1.70%

Source: Bhorat, H.; Goga, S.; Stanwix, B. & LMIP. 2013.445

5.3.5. Unemployment and Education Levels From Table 5.22 and Figure 5.10 it is evident that as the economy modernises and productivity improves, the demand for unskilled and semi-skilled employees decreases substantially. The number of employees with no formal education declined over the period 2008 to 2013: from 468,000 to 379,000 employees, a decline of 19%.446 The number of employees who attained some primary education also declined over the period 2008—2014:

As the economy

from 1.49 million to 1.1 million, a decline of 26.4%

modernises and pro-

from 2008.447 Employees who completed primary education decreased over the period 2008—2014: from 721,000

ductivity improves, the demand for unskilled and

to 632,000 in 2014, a decrease of 16.9% from 2008. 448

semi-skilled employees

The result is that the total number of employees with

decreases substantially.

primary school education or less decreased by 624,000 or 35.7%.449 At the same time, there is significant job growth for those with tertiary education and secondary qualifications. The number of employees who attained some secondary education increased from 2008 to 2013: from 4.5 million to 5 million in 2014, an increase of 11.8%.450 Furthermore, employees who completed their secondary education increased from 4.2 million in 2008 to 4.7 million in 2014, an increase of 12.55% from 2008.451

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Table 5.22: Highest level of education of the employed (2008–2014).

Highest level of education

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

588

468

400

377

369

368

379

1,486

1,272

1,120

1,175

1,112

1,186

1,093

754

721

659

640

633

634

632

Secondary not completed

4,972

4,553

4,588

4,798

4,942

5,091

5,014

Secondary completed

4,152

4,207

4,239

4,232

4,500

4,735

4,723

Tertiary

2,634

2,590

2,707

2,919

2,827

3,008

3,059

184

161

185

195

142

155

155

14,769

13,973

13,898

14,336

14,524

15,177

15,055

No formal education Less than primary completed Primary completed

Other Total Source: Statistics South Africa, 2014. 452

6,000

5,000

(000s)

4,000

3,000

Q4 2008 Q1 2014

2,000

1,000

0 No formal education

Less than primary completed

Primary Secondary not Secondary completed completed completed

Tertiary

Other

Highest level of education

Source: Statistics South Africa, 2014.453

Figure 5.10: Highest level of education of the employed (000s) (2008 & 2014)

Despite the fact that those with degrees in the labour market increased from 463,000 in 1995 to 1.1 million in 2011 (137% increase), the unemployment rate in 2011 among people with degrees was lower than 5%. Unemployment at this rate can be considered as full employment.454

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According to the CDE, unemployment decreases progressively as one goes up the educational scale:455 •

for those without 12 years of schooling, the unemployment rate is 42%;

•

for matriculants the rate is 29%, and

•

for non-degree tertiary education it is 16%. .

Another phenomenon is that black graduates are 6.7% unemployed as apposed to whites at 2%. Younger graduates are also more likely to be unemployed than older graduates (11% of 20—29 year olds compared to 2% of 40—65 year olds).456 The reasons why black graduates have a higher unemployment rate are not entirely clear. It can be speculated that employers discriminate against “traditional black universities” due to perceived inadequacies in quality.457 Students who qualify from these universities are far removed from the major job markets and find it difficult and expensive to enter the markets; and students are perhaps studying in disciplines where the demand is low and supply high. The overall lower level of employment among graduates can also be attributed to employers who prefer graduates for entry level jobs, due to the perceived low quality of a school/matric qualification. The implication of this is clearly that tertiary education institutions should expand their capacity without lowering standards. The government should also consider allowing more private providers in this regard.458

5.3.6. Reasons for Unemployment The reasons for the high youth unemployment are numerous and complex. Below are some of the reasons listed: 1. The Socio-economic circumstances of young people who live in poor neighbourhoods with poor schools. According to CDE, these young people “struggle to access appropriate training opportunities to either improve their employability or set up their own businesses”. They have no clear idea how to look for jobs that are available. Many have little or no access to social networks that could link them to job opportunities, partly because many have parents who have themselves been unemployed for substantial periods of time. A growing number of young people are living in environments of multi-generational unemployment. Young people who find themselves in these situations, become increasingly resigned to never finding a job.459 2. Expectations are too high. CDE reports that “there is evidence from Cape Town and rural KwaZuluNatal that suggests that some young people – men, in particular – will not accept jobs that either pay too little or offer too little employment security”. Research from rural KwaZulu-Natal suggests that some of the unemployed will not take jobs which are perceived to provide insufficient income to provide for a family and a household. 460 3. Low economic growth, especially in the formal sector. Economic growth is also not necessarily creating jobs at the same rate owing to the modernisation of industries and the move away from labour intensive practices.

African Human Capital and Labour Report: SOUTH AFRICA

4. Much of the high unemployment is a result of the weak education system. Too many students fall out during their school journey. The unemployment rate of people who do not complete secondary school is more than three times higher than those who completed matric, while young people with some tertiary education have a 100% better chance of finding employment than those with only a matric. The throughput is abysmal: for example, in 2000 there were 1.06 million children in grade one. Twelve years later, in 2011, only 348,000 passed the National Senior Certificate (NSC), which is a 33% success rate. Of those, only 29% make it into further education, which represents a throughput of 9.6% making it to tertiary education. The situation is further skewed as only 13% of Africans who pass matric participate in higher education, compared to 50% of white matriculants.461 5. Various youth policies, implemented since 1994 by the government and youth agencies, have had limited effect. The CDE contests that very little monitoring and evaluation occur, which make it difficult to learn from successes and mistakes”. 462 6. A large percentage of the unemployed have been trapped in this situation for too long. Many have become discouraged to look for work. In cases like these, the education and skills that they might have acquired are lost, because such skills are hardly utilised, which further diminishes their employability.

5.4. Job Creation Strategies and Programmes The South African government has launched various initiatives to create jobs. This was reported by Minister Pravin Gordhan, who indicated in the recent budget address that:

The establishment of special economic zones, industrial incentives and support for agriculture and labour-intensive sectors should help alleviate the pressure. The ramping up of skills development and further education and training programmes, support for small and medium enterprises and partnerships with private and public sector development agencies are part of the strategy. Billions of rand have been allocated to these programmes.463

Below are a few of the approaches and programmes.

5.4.1. The Jobs Fund The Jobs Fund is administered by the Development Bank of South Africa. The Jobs Fund creates jobs by supporting initiatives that generate employment in innovative ways. The Fund offers once-off grants in the areas of enterprise development, infrastructure, support for work seekers and institutional capacitybuilding.464 The Jobs Fund awards grants to organisations through a competitive project application process where only the best ideas are funded. Funding allocations are transparent, open and competitive, and are made by an independent investment committee.

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The Jobs Fund accepts applications from the private, public and non-governmental sector during calls for proposals. Project partners are required to share both risk and costs by matching the grant fund allocation on a 1:1 ratio for private sector partners or 1:0.2 for non-private sector partners.465 Preliminary results from the first three calls for proposals were: 466 •

93 projects approved

•

R4.96 billion government funding committed to those 93 projects

•

These 93 projects target the creation of 143,914 new permanent jobs over the next five years

•

An additional 55,989 individuals will be placed in existing jobs

•

As at the end of December 2013, 51 projects were in full implementation.

•

The Jobs Fund has disbursed R802 million in grant funding to the 51 implementing projects, which has leveraged a further R697 million from project partners

•

These 51 implemented projects have created 12,184 permanent, new jobs of which 50% are jobs for young people.

One of the successful projects is the Harambee Youth Employment Accelerator (see box below):467 Harambee was established as a public benefit organisation (PBO) in 2011 by a group of businesses to simultaneously address entry level labour challenges experienced by business (such as high attrition) and high levels of youth unemployment. The importance of enabling such youth to get and keep their first job cannot be underestimated – the DBSA explains that if a young person gets and keeps his/her first job, he/she is significantly more likely to remain employed for the rest of his/her life. Expected Project Impact The high level objective of Harambee is to transition 10,000 unemployed young people into their first job opportunity by June 2014, and to significantly increase their likelihood of success and retention in sustained employment. Through executing its operating model, Harambee aims to make a difference in three areas: •

The individual:



The individual will be empowered through personal development, skills enhancement and, most importantly, through having a formal job. In addition, those potential candidates that have interaction with Harambee will have benefited through that association, even if not selected for bridging.

•

The community:



Each Harambee graduate comes from an impoverished background and once employed will, on average, be able to support five other people within the family/community.

African Human Capital and Labour Report: SOUTH AFRICA

•

The business:



South Africa is experiencing both an unemployment crisis and a severe skills shortage problem. Harambee seeks to provide each employer with the ability to access previously inaccessible pools of talent; who enter the organisation with the skills and behaviours to meet the demands of the entry level roles. Harambee also seeks to positively influence employer attitudes.

5.4.2. Expanded Public Works Programme (EPWP) This programme is a government initiative, contributing to government’s policy priorities in terms of decent work and sustainable livelihoods, health, education, rural development, food security and land reform, and the fight against crime and corruption.468 The EPWP was launched in 2004 and is currently still being implemented.  The programme is nationwide and covers all areas of government and state-owned enterprises. The EPWP offers an important avenue for labour absorption and income transfers to poor households in the short to medium-term. It is also an endeavour by the public sector bodies to use expenditure on goods and services to create work opportunities for the unemployed. EPWP projects employ workers on an on-going or temporary basis, either by contractors, government or non-governmental organisations under the Ministerial Conditions of Employment for the EPWP or learnership employment conditions. 469 The EPWP creates work opportunities in four sectors, namely, Infrastructure, Non-State, Environment and Culture and Social, by: 470 •

increasing the labour intensity of government-funded infrastructure projects under the Infrastructure sector,

•

creating work opportunities through the Non-Profit Organisation Programme (NPO) and Community Work Programme (CWP) under the Non-State sector, and

•

creating work opportunities in public environment and culture programmes under the Environment and Culture sector,

•

creating work opportunities in public social programmes under the Social sector.

The EPWP Phase II, started in April 2009, has an objective to create 4.5 million work opportunities by 2014. The EPWP Social sector achieved over 800,000 work opportunities by December 2013 against the set target of 750,000 through programmes such as Early Childhood Development, Home Community-Based Care, School Nutrition Programme, Community Crime Prevention, School Mass Participation and Kha Ri Gude (a mass literacy campaign).471

5.4.3. Youth Employment Tax Incentive Although it is too early to evaluate the success of this initiative, the uptake of the youth employment tax incentive is encouraging: in its first month it recorded 56,000 beneficiaries. 472

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5.5. Employment Equity The Employment Equity Act was introduced to ensure that employers made sure that disadvantaged groups (black people, women and people with disabilities) have equal opportunity to get a job. The emphasis is to reach an employment dispensation which is representative of the South African demographic makeup in all job categories. The Employment Equity Act applies to all employers, workers and job applicants, except for members of the National Defence Force, National Intelligence Agency and South African Secret Service.473 The Act aims to protect workers and job seekers from unfair discrimination. The Act also provides a framework for implementing affirmative action. The provisions for affirmative action apply to: 474 •

employers with 50 or more workers, or whose annual income is more than the amount specified in Schedule 4 of the Act,

•

municipalities,

•

organs of State,

•

employers ordered to comply by bargaining council agreement,

•

any employers who volunteer to comply.

According to legislation in Section 16 of the Employment Equity Act, employers have the responsibility to: 475 •

find and remove things that badly affect designated groups,

•

support diversity through equal dignity and respect to all people,

•

make changes to ensure designated groups have equal chances,

•

ensure equal representation of designated groups in all job categories and levels in the workplace, and

•

retain and develop designated groups.

In order to comply with the Employment Equity Act, employers have to submit an annual Employment Equity report. The latest annual report published by the Employment Equity Commission indicates that although progress is being made, substantial improvement in the top and professional levels is still required. For the purpose of this report, only the following categories will be analysed: Top Management, Senior Management and the Professionally qualified.

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5.5.1. Top Management In 2013 19.8% of these positions were filled by Africans/Blacks. When compared to 2003, it represents a 32.88% increase, although that is from a low base of 14.9%. What is a concern, though, is the fact that this was only a slight increase since 2007 when Africans/Blacks represented 18.8% of the Top Management Jobs. The White category decreased from 76.3% to 62.7% over the 10-year period. Foreign Nationals held 4.1% of the jobs in this category in 2014.476 On the positive side, African/Black representation increased by 2,155 (93.3%) at this level: from 2,309 employees in 2003 to 4,464 employees in 2013. Stating it differently, 30.5% of the increase in these jobs was filled by Africans/Blacks. Although it is not close to the EAP racial breakdown, the trend is positive and is substantially higher than the existing 19.8% being employed in this category (see Figure 5.11).477 100%

3.1%

3.9%

68.2%

65.4%

4.1%

90%

80%

70%

60%

76.3%

62.7%

White Indian/Asian

50%

Coloured

40%

African/Black

30% 6.1% 20%

Foreign national

4.9%

7.5%

8.4% 5.1%

3.9%

4.8%

18.8%

18.5%

19.8%

2007

2011

2013

4.0% 10% 14.9% 0% 2003

Source: South African Department of Labour (DoL), 2014.478

Figure 5.11: Distribution of top management by population group (%) (2003 – 2013)

5.5.2. Senior Management The racial breakdown looks better with regard to senior management: in 2013 23% of these positions were filled by Africans/Blacks, and compared to 2003, it represents a 62% improvement (again, however, from a low base of 14.2%). The White component decreased from 72.7% in 2003 to 57% in 2013. Foreign Nationals are now around 3%.479 If the actual numbers are analysed, the situation again looks more positive. African/Black representation increased by 12,764 (190%) at this level: from 6,728 employees in 2003 to 19,492 employees in 2013, which means that Africans/Blacks filled 34.4% of the increase in jobs in this category. This is again substantially higher than the existing African/Black portion of 23% (see Figure 5.12). 480

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100%

2.3%

2.0%

3.0%

90%

80%

70% 72.7%

65.0%

61.9%

57.0%

60%

Foreign national White Indian/Asian

50%

Coloured

40% 10.1%

African/Black

9.1%

30%

8.2% 6.8% 6.1%

20%

7.0% 6.4%

6.3% 10% 14.2%

18.1%

20.0%

2007

2009

23.0%

0% 2003

2013

Source: South African Department of Labour (DoL), 2014.481

Figure 5.12: Distribution of senior management by population group (%) (2003-2013)

5.5.3. The Professionally Qualified The African/Black representation at the Professionally Qualified-level fluctuated over the 10-year period. In actual fact, the 2013 proportion (38.4%) is lower than 2003 (39.0%). Whites decreased from 49.2% in 2003 to 40.6% in 2013. All the other race groups increased substantially over the period. (See Figure 5.13.)482 100%

1.4%

2.1%

2.4%

42.3%

40.6%

90%

80% 49.2% 70%

57.2%

Foreign national 60%

50%

40%

White 9.1%

9.4%

5.5% 6.1%

10.2%

9.6%

20%

8.5%

39.0%

36.3%

38.4%

2011

2013

24.1%

10%

0% 2003

2007

Coloured African/Black

8.7% 30%

Indian/Asian

Source: South African Department of Labour (DoL), 2014.483

Figure 5.13: Distribution of professionally qualified by population group (%) (2003-2013)

African Human Capital and Labour Report: SOUTH AFRICA

5.6. Supply and Demand of Different Skill Levels and Different Job Categories 5.6.1. Labour Market Information It is difficult to determine what and where the major skills shortages are in the country, the major problem being a lack of an integrated labour market information system. Existing information is fragmented, out of date, and various different survey models are applied which makes integration and comparisons over time difficult. To address this issue, the Higher Education and Training Minister, Dr Blade Nzimande, launched the Labour Market Intelligence Partnership (LMIP) project in 2013, which is being led by the Human Sciences Research Council (HSRC). Speaking at the launch, Minister Nzimande said: “Put simply, this project aims to set up systems for reliable data indicating skills needs, supply and demand in our labour market in a manner that will enable our country, including government and business, to plan better for human resources development needs of our country.”484 The LMIP will provide information that has been organised in terms of the following six themes: 485 1. Labour market analysis, framework, data, and information systems. 2. Skills forecasting: the supply and demand model . 3. Selected sectoral analyses. 4. Reconfiguring the Post-School Sector. 5. Pathways through education and training and into the labour market. 6. Understanding changing artisan and occupational identities and milieus. The core research consortium consists of the HSRC, the Development Policy Research Unit at the University of Cape Town, and the Education Policy Unit at the University of the Witwatersrand. Other partners include research institutes, universities and independent consultants.486 The LMIP proposes to: 487 •

Advance information and knowledge of the post-school education and training system in relation to economic development and growth.

•

Build labour market intelligence to inform strategic planning and interventions.

•

Develop future research capacity in the area of education and training, skills development and labour market analysis.

•

Enhance the institutional capacity of DHET and its stakeholders to gather and interpret labour market information.

•

Create a community of practice through dissemination activities with policy-makers and researchers.

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The outcomes will contribute to the following: 488 •

A labour market intelligence system that will empower students and work-seekers to make the correct education and skills decisions, making them more attractive to employers.

•

Government and companies that will be able to make better strategic decisions in matching skills demand and supply. This will lead to increased productivity and profits.

•

Education and training institutions (adult education and training, workplace training, the FET college system, artisan and technical training, and higher education) that will be able to respond to shifting labour market demand signals more effectively.

5.6.2. Skills Shortages In May 2014 the Department of Higher Education and Training published the National Scarce Skills Set: Top 100 Occupations in Demand. When analysing the list, it is evident that the main scarce occupational groups are in Engineering, Health and Medical, Telecommunications, Finance and Accounting, and Technical fields. The top 25 identified are listed in Table 5.23 below. Table 5.23: National scarce skills list (2014)

No

Occupational Title

No

Occupational Title

1

Electrical Engineer

14

Energy Engineer

2

Civil Engineer

15

Materials Engineer

3

Mechanical Engineer

16

Electronics Engineer

4

Quantity Surveyor

17

Metallurgical Engineer

5

Programme or Project Manager

18

Medical Superintendent/Public Health Manager

6

Finance Manager

19

Telecommunications Engineers

7

Physical and Engineering Science Technicians

20

Energy Engineering Technologist

8

Industrial and Production Engineers

21

Millwright

9

Electrician

22

Public Health Physician

10

Chemical Engineer

23

Nursing Professionals

11

Construction Project Manager

24

Registered Nurse (child and family health)

12

Mining Engineer

25

General Medical Practitioner

13

Accountant (General)

Source: Government Gazette, 2014.489

African Human Capital and Labour Report: SOUTH AFRICA

An analysis of the scarce skills list reveals that it is mostly in line with international trends. The shortage of skills will be intensified as the government’s infrastructure development plan is rolled out. This is confirmed by Ebrahim Patel, Minister for Economic Development, who said that in executing the government’s ZAR 300 billion infrastructure programme, the country will need its entire skills base. He further stated that the government will be making an active attempt to bring back South Africans with skills to take part in the programme.490 It is specifically in the engineering field were the crisis is acute; for example, in SA there is one engineer per 3,000 people, compared to 227 in Brazil and 543 in Malaysia.491 Healthcare is also suffering, especially in losing doctors who are leaving the country. The Department of Health indicated that there was a shortfall of more than 4,000 doctors in 2011. About 1,200 doctors complete their training every year and many of these doctors leave the country. About 23% of community service doctors leave the country annually. What is concerning, is that the number of doctors qualifying each year has stayed the same for the last 17 years.492

5.7. Technical and Vocational Education and Training (TVET) in South Africa 5.7.1. TVET mission, legislation and national policy or strategy TVET, known in South Africa as Further Education and Training (FET), seeks to function as a high quality, transformed and responsive system. According to the United Nations Educational, Scientific and Cultural Organization (UNESCO), the government of South Africa uses this system to promote the integration of education and training, as well as the enhancement of learner mobility and progression, to ultimately meet human resource needs. TVET systems are built to address these needs and to further promote personal, social, civic and economic development in the country. The mission is to provide people with intermediate to high-level skills that would lay a foundation for higher education, facilitate the transition from school to work and develop autonomous life-long learners. The government steers TVET in several ways – all of these actions are centralised in the Department of Higher Education and Training (DHET). The government’s primary responsibility is to develop policy, norms and standards. Other responsibilities include the development of a national curriculum, staff development, student and programme targeting, funding and updating policy implementation. The National Skills Fund is also established to support priority skills and innovative research in high-level occupationally directed programmes from universities to the workplace. This fund is known as a ‘catalytic’ fund because it promotes strategic partnerships, an innovation in project delivery. The Professional, Vocational, Technical and Academic Learning (PIVOTAL) grant functions similarly, but with a focus on providing access to work-integrated learning, apprenticeships, learnerships, internships, skills programs and work-experience placements.

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5.7.2. National Strategy The government plays a key role in building skills for national development. After Democracy in 1994, educational sectors rallied behind a set of national imperatives found in the Medium-Term Strategic Framework (MTSF), the National Industrial Policy Framework (NIPF) and the Industrial Policy Action Plans (IPAP). Additionally, the government erected frameworks, passed acts, and consolidated the Departments of Education and Labour under the Department of Higher Education and Training (DHET) in order to meet South Africa’s present and future skill needs. Today, the most updated skill needs are developed and assessed by the Ministry of Higher Education and Training and published in the National Skills Development Strategy (NSDS III) for 2011–2016. Currently, South Africa responds to changes through the collective action of stakeholders: government, business organisations, trade unions, constituency bodies and delivery agents (for example, SETA, public bodies, employers, trade and professional bodies, public and private training providers, community-based organisations and NGOs). This partnership ensures a national and local approach to change. 5.7.2.1. Human Resource Development Strategy of South Africa Human resources development on a national scale is a government priority. However, in the Human Resource Development Strategy for South Africa (HRD–SA) 2010–2030 it is made clear that the scope and importance of implementing the HRD–SA extends beyond government. As the report puts it: 493

Thus, human resources development (HRD) is critically important in South Africa’s development agenda. The importance of HRD demands a response that has a sense of urgency. It demands a comprehensive and determined response from government. However, the scope and importance of the HRD project extends beyond government: It demands collective will and purposeful action from all stakeholders in society. It demands the determination, commitment and accountability of individuals to invest time and effort in their own development. It demands the commitment of all enterprises and organisations to invest time and resource in HRD toward public good.

The 20-year strategic framework identified 15 priority areas which need to be addressed (see box below).494 1. To ensure universal access to quality early childhood development, commencing from birth up to age four. 2. To eradicate adult illiteracy in the population. 3. To ensure that all people remain in education and training until the age of 18 years. 4. To ensure that all new entrants into the labour market have access to employment-focused education and training opportunities.

African Human Capital and Labour Report: SOUTH AFRICA

5. To ensure that levels of investment are above the global average for all sectors of the education and training system. 6. To ensure that inequality in education and training outcomes is significantly less than the prevailing income inequality at that time. 7. To ensure that education and training outcomes are equitable in terms of race, gender, disability and geographic location. 8. To ensure that the balance of immigration and emigration reflects a net positive inflow of people with priority skills required for economic growth and development. 9. To ensure that all adults in the labour market (unemployed and employed) have access to education and training opportunities that will enable them to acquire a minimum qualification at Level 4 of the NQF. 10. To ensure progressive improvement in the external efficiency and effectiveness of HE, FET and the occupational learning system. 11. To ensure that South Africa is ranked in the top 10% of comparable countries in terms of its economic competitiveness. 12. To ensure that South Africa is ranked in the top 10% of comparable countries in terms of its Human Development Index. 13. To ensure that South Africa is ranked in the top 10% of comparable countries in terms of its knowledge and education dimension of the Human Development Index, as measured by the adult literacy rate (with two-thirds weighting) and the combined primary, secondary and tertiary gross enrolment ratio (with one-third weighting). 14. To ensure that South Africa is ranked in the top 10% of comparable countries in terms of its Technology and Innovation Index. 15. To ensure that South Africa is ranked in the top 10% of comparable countries in terms of levels of human capital stock.

5.7.3. Legislative Framework The South African Constitution (1996) Section 29 states that: “Everyone has a right to a basic education, including adult basic education, and to further education, which the state, through reasonable measures, must make progressively available and accessible.” The following legislation plays a critical role in establishing, governing, assessing and funding TVET in South Africa: •

South African Qualifications Authority (SAQA) Act No. 58 (1995): provides for the development and implementation of NQF; establishment of SAQA

•

National Education Policy Act (1996): articulates the policy, legislative and monitoring responsibilities of the Minister and formalises the relations between national and provincial education authorities

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•

Higher Education Act No. 101 (1997): provides a unified system of higher education; established the Council of Higher Education

•

Further Education and Training Act No. 98 (1998): provides for the governance and funding of FET colleges

•

Skills Development Act No. 97 (1998) – amended in 2008: creates the National Skills Agency, established Quality Council for Trades and Occupations, regulates skills development apprenticeships and learnerships

•

General and Further Education and Training Quality Assurance Act No. 58 (2001): establishes UMALUSI as the quality council for FET colleges

•

Further Education and Training (FET) colleges Act No. 16 (2006): provides regulation of FET, establishment, governance, funding and employment of staff for public FET and registration of private FET colleges

•

National Qualifications Framework (NQF) Act No. 67: manages the NQF, its qualifications and quality assurance.

Full excerpts of these acts are available on the South African Legal Information Institute (SAFLII) website at: http://www.saflii.org/za/legis/num_act/sda1998217.pdf and http://www.saflii.org/za/legis/num_act/ sdla1999283.pdf.

5.7.4. National Qualification Framework (NQF) In 2008 the National Qualifications Framework (NQF) Act No. 67 instituted the NQF as a single integrated system with three coordinated qualifications frameworks: general and further education and training, higher education, and trades and occupations. This overarching framework contains learning achievements; facilitates access to, and mobility and progression within, education, training and career paths; enhances the quality of education and training; and accelerates the redress of past unfair discrimination in education, training and employment opportunities. There are ten NQF levels that are assessed according to ten categories every five years. These categories used in the level descriptors are: 1. Scope of knowledge 2. Knowledge literacy 3. Method and procedure 4. Problem solving 5. Ethics and professional practice 6. Accessing, processing and managing information 7. Producing and communicating of information 8. Context and systems 9. Management of learning 10. Accountability

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The NQF has a juristic identity, possessing the force of law for its enactment by statutory institutions and regulations. The NQF is comprehensive and affects all its respective providers. Finally, the NQF is prescriptive and lists its compliance requirements in detail. The South African qualifications structure including the TVET is indicated in Table 5.24 below. Table 5.24 South African Qualifications Structure

BAND

SCHOOL GRADES

NQF LEVEL

QUALIFICATIONS

8

Doctor’s degree Master’s degree

7

Honours degree Postgraduate diploma

HIGHER

General first degree 6

Professional first degree postgraduate Bachelor’s degree First diploma

5

Higher certificate

FURTHER

Certificate 12

4

Diplomas

11

3

Certificates

10

2

9

1

8 7

GENERAL

6 5 4 3 2 1 R Source: South African Institute for Race Relations, 2012.495

Grade 9/Adult Basic Education and Training level 4

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5.7.5. Quality Assurance There are three major TVET quality authorities: the South African Qualifications Authority (SAQA), the Council for Quality Assurance in General and Further Education and Training (UMALUSI), and the Quality Council for Trades and Occupations (QCTO). 1. SAQA is composed by stakeholders in education and training who oversee the development and implementation of the NQF. Under them, the national Standard Bodies generate and recommend qualifications and standards. The Education and Training Quality Assurance Regulations (ETQA) are responsible for the accreditation of education and training providers. 2. UMALUSI ensures that the education providers have the capacity to deliver and assess qualifications and learning programs. They are responsible for certifying NCV, NSC, vocational senior certificates, etc. 3. The QCTO is responsible for education and training in the workplace. The QCTO was established in terms of the Skills Development Act to be a Quality Council. The role of the QCTO is to oversee the design, implementation, assessment and certification of occupational qualifications on the Occupational Qualifications Sub-Framework (OQSF).496

The quality assurance function of the QCTO ensures that people who have completed their occupational qualification and who have successfully passed the external integrated summative assessment, meet the required standards. Those who do meet the criteria, are then awarded with an occupational certificate. Prospective employers and customers can be assured that the people holding occupational certificates are fully qualified to do the work stated on the certificate.497

In addition to these three main quality authorities, the Council on Higher Education (CHE) advises the Minister for Higher Education and Training on higher education policy issues and ensures the quality of higher education in South Africa through the Higher Education Quality Committee (HEQC).

5.7.6. Sector Education and Training Authorities (SETAs) Sector Education and Training Authorities (SETAs) have been established with the view of increasing the levels of investment in training and development, and to improve the return on that investment to companies. There are currently 21 SETAs in South Africa who are mandated to ensure intermediate and high level skills are developed among the employed and unemployed. They further have a mandate to train 10,000 artisans per year, and assist in finding suitable employment for these artisans. SETAs facilitate a number of learning programmes: among these are internships, learnerships, bursaries and short course training programmes. Funds obtained from the Skills Development Levy enable SETAs to fulfil their mandate. Table 5.25 below lists all the SETAs and their acronyms in existence in South Africa in 2011:

African Human Capital and Labour Report: SOUTH AFRICA

Table 5.25: List of Sector Education and Training Authorities (SETAs) in South Africa

Abbreviation

Description

AGRISETA

Agriculture Sector Education and Training Authority

BANKSETA

Banking Sector Education and Training Authority

CATHSSETA

Culture, Arts, Tourism, Hospitality and Sport Sector Education and Training Authority

CETA

Construction Education and Training Authority

CHIETA

Chemical Industries Education and Training Authority

ETDPSETA

Education and Training Development Practices Sector Education and Training Authority

EWSETA

Energy and Water Sector Education and Training Authority

FASSET

Finance, Accounting, Management Consulting and other Financial Services Sector Education and Training Authority

FOODBEV

Food and Beverage Manufacturing Industry Sector Education and Training Authority

FP&MSETA

Fibre processing and Manufacturing Sector Education and Training Authority

HWSETA

Health and Welfare Sector Educational Training Authority

INSETA

Insurance Sector Education and Training Authority

LGSETA

Local Government Sector Education and Training Authority

MERSETA

Manufacturing, Engineering and Related Services Sector Education and Training Authority

MICTSETA

Media Information and Communication Technologies Sector Education and Training Authority

MQA

Mining Qualification Authority

PSETA

Public Service Sector Education and Training Authority

SASSETA

Safety and Security Sector Education and Training Authority

SERVICES SETA

Services Sector Education and Training Authority

TETA

Transport Education and Training Authority

W&RSETA

Wholesale and Retail Sector Education and Training Authority

Source: The South African Department of Higher Education and Training, 2012.498

The number of employees that successfully completed their SETA learning programme for the period 2011–2012 was 82,114. The majority of these were in MQA learning programmes: 31.91% (26,208); followed by TETA qualifications: 21.57% (17,715); and FASSET: 15.28% (12,555).499 (See Table 5.26 below.)

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Table 5.26: Number of employees that successfully completed their SETA learning programme for the period (2011–2012)

SETA

Learnerships

Bursaries

Internships

Skills

Total

Programmes

Actuals

AGRISETA

1,039

45

0

2,404

3,488

BANKSETA

294

0

0

631

925

CATHSETA

352

12

7

1,832

2,203

CETA

122

0

0

118

240

CHIETA

625

42

0

1,827

2,494

ETDPSETA

346

116

0

734

1,196

EWSETA

262

6

0

228

496

FASSET

321

0

0

12,234

12,555

FOODBEV

465

205

0

1,403

2,073

FP&MSETA

329

0

0

311

640

HWSETA

675

0

0

23

698

INSETA

168

279

116

3,081

3,644

LGSETA

851

1

0

160

1,012

1,650

52

0

2,208

3,910

MICT

0

0

0

383

383

MQA

1,244

0

0

24,964

26,208

0

0

0

0

0

SASSETA

256

0

0

707

963

SERVICES

132

116

0

134

382

61

50

4

17,600

17,715

454

0

0

435

889

9,646

924

127

71,417

82,114

MERSETA

PSETA

TETA W&RSETA Total

Source: The South African Department of Higher Education, 2013.500

The number of unemployed persons that successfully completed their SETA learning programme in 2011– 2012 was 38,044. The majority of these were in MQA learning programmes: 31.28% (11,901); followed by MERSETA qualifications: 8.62% (3,280); and FASSET: 8.12% (3,092).501 (See Table 5.27.)

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Table 5.27: Number of unemployed persons that successfully completed their SETA learning programme, per category (2011–2012)

SETA

Learnerships

Bursaries

Internships

Skills

Total

Programmes

Actuals

AGRISETA

913

42

345

993

2,293

BANKSETA

999

25

0

65

1,089

CATHSETA

334

49

0

705

1,088

CETA

356

50

0

278

684

CHIETA

962

97

0

434

1,493

ETDPSETA

913

300

185

218

1,616

EWSETA

537

0

24

0

561

2,771

321

0

0

3,092

FOODBEV

324

28

150

0

502

FP&MSETA

567

0

0

448

1,015

HWSETA

692

0

0

0

692

INSETA

463

397

21

143

1,024

LGSETA

224

0

0

288

512

MERSETA

2,544

43

142

551

3,280

MICT

1,912

0

0

0

1,912

MQA

1,243

81

7

10,570

11,901

0

0

0

0

0

SASSETA

1,050

0

0

0

1,050

SERVICES

686

34

0

316

1,036

TETA

502

65

4

748

1,319

1,532

0

0

353

1,885

19,524

1,532

878

16,110

38,044

FASSET

PSETA

W&RSETA Total

Source: The South African Department of Higher Education, 2013.502

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5.8. Expatriates, Immigrants and South African Diaspora 5.8.1. Expatriates Working in South Africa With the existing and forecasted skills shortages, South Africa will have to recruit more specialised skills and talent on the international market in order to implement the government’s infrastructure expansion programme, amongst others. The government has promulgated new regulations regarding immigration on 22 May 2014 to be effective from 26 May 2014.503 Below are the new regulations regarding Business, Work and Corporate Visas (see box). [Please note: for detailed requirements and fees to be paid, go to http://www.dha.gov.za/images/final_ Immigration_Regulations_2014_1.pdf. The immigration regulations change from time to time and the Department of Home Affairs’ website (http://www.home-affairs.gov.za/) should be consulted prior to travelling.] Business Visa 1.

An application for a business visa by a foreigner who intends to establish a business or invest in a business that is not yet established in the Republic, shall be accompanied by – a)

A certificate issued by a chartered accountant registered with the South African Institute of Chartered Accountants or a professional accountant registered with the South African Institute of Professional Accountants to the effect that – i.

At least an amount in cash to be invested in the Republic as determined from time to time by the Minister, after consultation with the Minister of Trade and Industry, by notice in the Gazette, is available; or

ii.

At least an amount in cash and a capital contribution as determined from time to time by the Minister, after consultation with the Minister of Trade and Industry, by notice in the Gazette, is available;

b)

An undertaking by the applicant that at least 60% of the total staff complement to be employed in the operations of the business shall be South African citizens or permanent residents employed permanently in various positions: Provided that proof of compliance with this undertaking shall be submitted within 12 months of issuance of the visa;

c)

An undertaking to register with the – i.

South African Revenue Services;

ii.

Unemployment Insurance Fund;

iii.

Compensation Fund for Occupational Injuries and Diseases;

iv.

Companies and Intellectual Properties Commission (CIPC), where legally required; and

v.

Relevant professional body, board or council recognised by SAQA in terms of section 13 (1) (i) of the National Qualifications Framework Act, where applicable,

Provided that upon registration, all certificates shall be submitted to the Director-General; d)

A police clearance certificate; and

African Human Capital and Labour Report: SOUTH AFRICA

e)

2.

A letter of recommendation from the Department of Trade and Industry regarding – The feasibility of the business; and

ii.

The contribution to the national interest of the Republic.

An application for a business visa by a foreigner who has established a business or invested in an existing business in the Republic, shall be accompanied by – a)

3.

i.

A certificate issued by a chartered accountant registered with the South African Institute of Chartered Accountants or a professional accountant registered with the South African Institute of Professional Accountants to the effect that i.

At least an amount in cash to be invested or to be invested in the Republic as determined from time to time by the Minister, after consultation with the Minister of Trade and Industry, by notice in the Gazette, is available or already invested; or

ii.

At least an amount in cash and a capital contribution as determined from time to time by the Minister, after consultation with the Minister of Trade and Industry, by notice in the Gazette, is available or already invested;

b)

Proof that at least 60% of the total staff complement employed in the operations of the business are South African citizens or permanent residents employed permanently in various positions;

c)

Proof of registration with the – i.

South African Revenue Service;

ii.

Unemployment Insurance Fund;

iii.

Compensation Fund for Occupational Injuries and Diseases;

iv.

Companies and Intellectual Properties Commission (CIPC), where legally required; and

v.

Relevant professional body, board or council recognised b SAQA in terms of section 13 (1) (i) of the National Qualifications Framework Act, where applicable;

d)

A police clearance certificate; and

e)

A letter of recommendation from the Department of Trade and Industry regarding – i.

The feasibility of the business; and

ii.

The contribution to the national interest of the Republic.

A foreigner who invests or has invested in an existing business shall, in addition to complying with subregulation (2), submit – a)

Financial statements in respect of the preceding financial year; and

b)

Proof of investment.

4.

The applicant must, within 12 months of the visa being issued, submit to the Director-General a letter of confirmation from the Department of Labour that 60% of the staff complement employed in the operations of the business are South African citizens or permanent residents who are employed permanently in various positions.

5.

A business visa may be issued for a period not exceeding three years at a time.

Work Visa 1.

An applicant for a general work visa, critical skills work visa or intra-company transfer work visa shall submit – a)

A written undertaking by the employer accepting responsibility for the costs related to the deportation of the applicant and his or her dependent family members, should it become necessary; and

b)

A police clearance certificate.

2.

The employer shall ensure that the passport of his or her employee is valid at all times for the duration of his or her employment.

3.

An application for a general work visa shall be accompanied by – a)

A certificate from the Department of Labour confirming that –

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i.

Despite a diligent search, the prospective employer has been unable to find a suitable citizen or permanent resident with qualifications or skills and experience equivalent to those of the applicant;

ii.

The applicant has qualifications or proven skills and experience in line with the job offer;

iii.

The salary and benefits of the applicant are not inferior to the average salary and benefits of citizens or permanent residents occupying similar positions in the Republic; and

iv.

The contract of employment stipulating the conditions of employment and signed by both the employer and the applicant is in line with the labour standards in the Republic and is made conditional upon the general work visa being approved;

b)

Proof of qualifications evaluated by SAQA and translated by a sworn translator into one of the official languages of the Republic;

c)

Full particulars of the employer, including, where applicable, proof of registration of the business with the commission on Intellectual Property and Companies (CIPC);

d)

An undertaking by the employer to inform the Director-General should the applicant not comply with the provisions of the Act or conditions of the visa; and

e)

An undertaking by the employer to inform the Director-General upon the employee no longer being in the employ of such employer or when he or she is employed in a different capacity or role.

4.

A general work visa shall be issued for a period not exceeding five years.

5.

An application for a critical skills work visa shall be accompanied by proof that the applicant falls within the critical skills category in the form of – a)

A confirmation, in writing, from the professional body, council or board recognised by SAQA in terms of section 13 (1) (i) of the National Qualifications Framework Act, or any relevant government Department confirming the skills or qualifications of the applicant and appropriate post qualification experience;

b)

If required by law, proof of application for a certificate of registration with the professional body, council or board recognised b SAQA in terms of section 13 (1) (i) of the National Qualifications Framework Act; and

c)

Proof of evaluation of the foreign qualification by SAQA and translated by a sworn translator into one of the official languages of the Republic.

6.

A critical skills work visa shall be issued for a period not exceeding five years.

7.

A spouse and dependent children of a holder of a critical skills work visa shall be issued with an appropriate visa valid for a period not exceeding the period of validity of the applicant’s critical skills work visa.

8.

An applicant for an intra-company transfer work visa shall be accompanied by –

9.

a)

The foreigner’s contract of employment with the company abroad valid for a period of not less than six months; and

b)

A letter from – i.

The company abroad confirming that the foreigner shall be transferred to a branch, subsidiary or an affiliate of that company in the Republic; and

ii.

The branch, subsidiary or an affiliate in the Republic confirming the transfer of the foreigner and specifying the occupation and capacity in which that foreigner shall be employed.

In terms of section 19 (5) of the Act, the relevant employer shall ensure that – a)

A foreigner is only employed in the specific position for which the visa has been issued;

b)

The foreign employee will at all times comply with the provisions of the Act and conditions of his or her visa and undertakes to immediately notify the Director-General if the employee refuses to comply with the provisions of the Act or conditions of the visa; and

c)

A plan is developed for the transfer of skills to a South African citizen or permanent resident.

10. An intra-company transfer work visa shall be issued for a period not exceeding four years and is not renewable.

African Human Capital and Labour Report: SOUTH AFRICA

11. The company referred to in sub regulation (8) (b) (ii) shall undertake to reimburse the Department any costs incurred in relation to the deportation of the holder of an intra-company transfer work visa and any of his or her dependent family members. Corporate Visa 1.

An application for a corporate visa shall be made on Form 13 illustrated in Annexure A and accompanied by – a)

Proof of the need to employ the requested number of foreigners;

b)

A certificate by the Department of Labour confirming –

c)

i.

That despite diligent search, the corporate applicant was unable to find suitable citizens or permanent residents to occupy the position available in the corporate entity;

ii.

The job description and proposed remuneration in respect of each foreigner;

iii.

That the salary and benefits of any foreigner employed by the corporate applicant shall not be inferior to the average salary and benefits of citizens or permanent residents occupying similar positions in the Republic;

Proof of registration of the corporation with the – i.

South African Revenue Service;

ii.

Unemployment Insurance Fund;

iii.

Compensation fund for Occupational Injuries and Diseases; and

iv.

Companies and Intellectual Properties Commission (CIPC), where legally required;

d)

An undertaking by the employer to inform the Director-General should any foreign employee not comply with the provision of the Act or visa conditions or is no longer in the employ of such employer or is employed in a different capacity or role; and

e)

A written undertaking by the corporate applicant to pay the deportation costs of any foreign employee accepting responsibility for the return costs related to the deportation of the foreign employee, should it be necessary.

2.

The applicant for a corporate visa must provide proof that at least 60% of the total staff complement that are employed in the operations of the business are citizens or permanent residents employed permanently in various positions.

3.

At any time during the duration of the visa, the holder of a corporate visa must provide proof that at least 60% of the total staff complement that are employed in the operations of the business are citizens or permanent residents employed permanently in various positions.

4.

The departments contemplated in section 21 (2) of the Act are –

5.

a)

The Department of Trade and Industry; and

b)

The Department of Labour

The relevant corporate applicant shall, as contemplated in section 21 (2) (a) (i) of the Act, ensure that – a)

The passport of the foreigner is valid at all times;

b)

The foreigner is employed by the corporate applicant to contact work for the corporate applicant only in the specific position for which the visa has been issued;

c)

Such foreigner departs from the Republic upon completion of his or her contract of employment;

d)

Any foreigner employed in terms of the corporate visa at all times complies with the– i.

Provisions of the Act, and

ii.

Terms and conditions of the corporate visa and of the corporate work certificate;

e)

The Director-General is immediately notified if there is reason to believe that the foreigner is no longer in compliance with the provisions of the Act; and

f)

The financial guarantees by the corporate applicant to defray deportation and other costs should the corporate visa be withdrawn or certain foreigners fail to leave the Republic when no longer subject to the corporate visa, and complied with.

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6.

In order to comply with sub-regulation (5) (c), the corporate applicant shall return the completed certificate contemplated in sub regulation (5) (d) to the Director-General, within a period of 30 days after the termination date of the corporate worker’s employment contract.

7.

The financial guarantees contemplated in section 21 (2) (b) of the Act shall be as determined from time to time by the Minister by notice in the Gazette.

8.

The Director-General may issue to the corporate applicant –

9.

a)

A corporate visa for a period not exceeding three years from Form 14 illustrated in Annexure A; and

b)

Authorisation certificates to employ corporate workers, in terms of the corporate visa contemplated in paragraph (a), for a period not exceeding the validity period of the corporate visa.

An application for a corporate worker certificate shall be accompanied by – a)

A valid passport of the applicant;

b)

Biometrics of the applicant;

c)

The certificate contemplated in sub regulation (8) (b);

d)

A valid employment contract;

e)

A written undertaking by the corporate applicant to ensure that the foreigner departs from the Republic upon termination of his or her contract o employment or accepting responsibility for the return or costs related to the deportation of the foreigner should it become necessary;

f)

The documentation contemplated in regulation 9 (1) (b), (c) and (f);

g)

Proof of qualifications evaluated by SAQA, and translated by a sworn translator into one of the official languages of the Republic, or skills and experience in line with the job offer; and

h)

A certificate of registration with the professional body, council or board recognised by SAQA in terms of section 13 (1) (i) of the National Qualifications Framework Act.

10. The Director-General may issue to the corporate worker employed by the holder of a corporate visa contemplated in sub regulation (8) a corporate worker certificate for a period not exceeding the validity period of the corporate visa. 11. A corporate worker may not renew his or her corporate worker certificate or apply for a change of status in the Republic.

5.8.2. South African Diaspora and Emigrants The South African diaspora is a reality. According to Professor Jonathan Crush, South Africa’s diaspora is about 1.5% or 600,000 of its population, with 40% living in Europe, mostly in the UK.504 It is estimated that 3% of the worlds’ people are first-generation migrants. By applying that as a yardstick, the number of South Africans living outside the country’s borders is lower than the international norm. Höppli, however, indicates that there are close to 750,000 South African-born immigrants living abroad, and although the brain drain has slowed since 2010, it has still been growing at 0.6% annually between 2010 and 2013.505 About 75% emigrants from South Africa moved to the UK, Australia, New Zealand and the USA.506 The South African diaspora can be a significant source for high level skills. The South African Network of Skills Abroad (SANSA) is an institute formally endorsed by the Departments of Arts and Culture and Science and Technology.507 It has strong support from universities and science councils with the objective of tapping into the substantial resource base of the South African diaspora. SANSA has 1,800 workers on its database and the number is increasing daily.508 The network of workers is highly educated: the proportion with advanced degrees (masters and doctorates) is considerably higher than in the average graduate population (see Table 5.28).509

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Table 5.28: Highest level of education of South Africans in diaspora Highest level of education

% indicated

Post-doctorate

7.40%

Doctorate

34.30%

Masters

46.70%

Honours

32.20%

Postgraduate diploma

14.50%

Bachelors

83.40%

Diploma

14.70%

Source: South African Network of Skills Abroad (SANSA).510 Note: Percentages do not add up to 100%, as all those with postgraduate diplomas or higher qualifications obviously have the lower qualifications as well.

Furthermore, research has revealed that for UCT, for example, the percentage of doctorates known to be located abroad are Medicine (43%), Commerce (30%), Education (27%), Science (26%) and Engineering (25%).511 These are the skills in which South Africa has a particular shortage. (See Table 5.23). The SANSA website can be accessed at: http://uct.ac.za/org/sansa. For further news and information about the SA diaspora, www.thesouthafrican.com can also be accessed. The distribution of South Africans living abroad is shown in Table 5.29. Table 5.29: Distribution of South Africans living abroad by destination country (2010)

Country

No.

UK

225,856

Mozambique

154,579

Australia

132,756

USA

81,142

diaspora is a reality, it is

Canada

47,470

about 1.5% or 600,000

New-Zealand

45,587

Namibia

35,238

of its population, with

Zimbabwe

18,335

40% living in Europe,

Portugal

15,789

mostly in the UK.

The Netherlands

12,325

Other

74,727

Total

843,804

The South African

Source: International Organization for Migration (IOM). 2014.512

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5.8.3. Immigrants The largest number of foreigners living in South Africa (in 2010) originates from Zimbabwe (859,000), Mozambique (455,000) and Lesotho (351,000).513 (See Table 5.30.) Table 5.30: Distribution of persons from other nationalities living in South Africa (2010)

Country

Number

Zimbabwe

858,993

Mozambique

454,548

Lesotho

350,657

Swaziland

135,720

Botswana

41,846

Other

21,126

Total

1,862,890

Source: International Organization for Migration, 2014.514

5.9. Wage and Salary Trends The South African Reserve Bank provides an overview of the wage and salary trends in their Quarterly Bulletin, March 2014: The pace of increase in total nominal salaries and wages per worker moderated notably from a year-on-year rate of 8,8 per cent in the second quarter of 2013 to 6,6 per cent in the third quarter due to a marked deceleration in public-sector wage growth. Consequently, growth in the real take-home pay of those formally employed in the non-agricultural sector of the economy decelerated from 2,7 per cent in the year to the second quarter of 2013 to 0,6 per cent in the year to the third quarter. Public-sector wages per worker increased at a rate of 3,1 per cent in the year to the third quarter of 2013, notably slower than the rate of increase of 11,7 per cent recorded in the year to the second quarter. The deceleration resulted mainly from the high remuneration base created in the third quarter of 2012, when civil servants at national departments and provinces received a backdated salary increase. By contrast, the pace of increase in private-sector salaries and wages per worker accelerated continually during 2013, amounting to a year-on-year rate of 7,3 per cent in the second quarter and 8,1 per cent in the third quarter. Remuneration growth varied widely within the different private subsectors in the third quarter of 2013, with the gold-mining sector (14,6 per cent) and the trade, catering and accommodation services

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sector (12,4 per cent) recording double-digit year-on-year increases, while the lowest increases were recorded in the electricity sector (1,8 per cent) and the construction sector (5,2 per cent). Other subsectors where remuneration increases were higher than the 6 per cent upper limit of the inflation targeting band were the private community, social and personal services sector (6,6 per cent); the finance, insurance, real-estate and business services sector (6,8 per cent); the non-gold mining sector (6,8 per cent); the private transport, storage and communication services sector (7,1 per cent) and the manufacturing sector (8,3 per cent). According to Andrew Levy Employment Publications, the overall average wage settlement rate in collective bargaining agreements amounted to 7,9 per cent in 2013, marginally above the average settlement rate of 7,6 per cent recorded in 2012. The number of workdays lost due to industrial action rose from 3,5 million in 2012 to 5,2 million in 2013, largely due to the conclusion of a number of multi-year wage negotiations resulting in increased labour unrest in various economic sectors. Workdays lost peaked at 2,9 million in the third quarter of 2013. 515

A major concern for South Africa is the government’s wage bill, which is now in the region of ZAR 439 billion or roughly 39% of total non-interest government expenditure. This is about double the average for other emerging markets, which stood at 22% in 2013. It also

A concern for South

appears that too much is spent on administrative staff

Africa is the government’s

as opposed to service delivery staff.

wage bill, which is now

516

5.9.1. Salary/Wage Increases

in the region of ZAR 439

According to the 21st Century Pay Solutions Group,

billion or roughly 39%

salary increases across various categories were

of total non-interest

mostly in line or higher than the previous inflation rate. Below is an extract with the permission of the 21st Century Pay Solutions Group from The South African Increase Report, April 2014.517

government expenditure.

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Actual Increases The following table represents the actual increases awarded in the last year by participating organisations at each level, for the basic salary plus benefits approach as well as the total guaranteed package approach. Therefore, the results below are informed by different samples of data. Table 9: Actual Increases Awarded

Job Level

Remuneration

10th

25th

50th

75th

90th

Approach

Percentile

Percentile

Percentile

Percentile

Percentile

1.50%

5.25%

6.00%

6.96%

7.00%

4.10%

6.00%

7.00%

8.00%

9.00%

5.50%

6.00%

6.25%

7.00%

7.00%

5.00%

6.00%

7.00%

7.50%

9.00%

6.00%

6.00%

7.00%

7.50%

8.00%

5.55%

6.00%

7.00%

7.50%

8.85%

5.64%

6.76%

7.50%

8.00%

8.88%

5.95%

6.00%

6.65%

7.98%

8.20%

Basic Salary plus Benefits (23.0%) CEO Total Guaranteed Package (77.0%) Basic Salary plus Benefits (23.1%) Executives Total Guaranteed Package (76.9%) Basic Salary plus Benefits (26.9%) Management Total Guaranteed Package (73.1%) Basic Salary plus Benefits (41.0%) General Staff Total Guaranteed Package (59.0%)

Analysing the data collected for the total guaranteed package remuneration approach, [it is evident] that with the exception of general staff who at the median were awarded 6.65% increases, the other three (higher) job levels received increases of 7% at the median. However, for the basic salary plus benefits remuneration approach, [the] general staff were awarded 7.5% increases at the median, while the other three (higher) job levels received increases of between 6% and 7% at the median. The percentage of organisations who implemented a 0% increase in 2013 was 6.06% for CEOs, 2.67% for executives and 1.30% for management and general staff. 3.33% of companies plan to impose a wage freeze on their CEO in 2014, while 1.56% proposed a salary freeze for executives and 0.51% for management. None of the companies indicated a plan to implement a salary freeze on their general staff in 2014.

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Table 10: Wage Freeze Statistics

Job Level

Percentage who have already

Percentage who plan to implement a

implemented a wage freeze (2013/2014)

wage freeze (2014/2015)

CEO

6.06%

3.33%

Executives

2.67%

1.56%

Management

1.30%

0.51%

General Staff

1.30%

0.00%

Projected Increases Table 11: Projected Increases to be Awarded

Job Level

Remuneration

10th

25th

50th

75th

90th

Approach

Percentile

Percentile

Percentile

Percentile

Percentile

5.00%

6.00%

7.00%

7.00%

7.00%

5.00%

6.10%

7.00%

7.00%

8.27%

5.40%

6.00%

7.00%

7.00%

7.00%

5.10%

6.50%

7.00%

7.00%

8.00%

5.80%

6.75%

7.00%

7.25%

8.00%

5.45%

6.50%

6.93%

7.00%

7.53%

6.00%

7.00%

7.00%

8.00%

8.00%

6.00%

6.50%

7.00%

7.13%

8.00%

Basic Salary plus Benefits (23.0%) CEO Total Guaranteed Package (77.0%) Basic Salary plus Benefits (23.1%) Executives Total Guaranteed Package (76.9%) Basic Salary plus Benefits (26.9%) Management Total Guaranteed Package (73.1%) Basic Salary plus Benefits (41.0%) General Staff Total Guaranteed Package (59.0%)

The above table represents the projected increases companies are planning on awarding in the coming year by participating organisations at each level, for the basic salary plus benefits approach as well as the total guaranteed package approach. Therefore, the results above are informed by different samples of data. In comparison to the most recently awarded increases at CEO and executive levels, which saw the total guaranteed package approach

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receive a higher increase than the basic salary plus benefits approach, the median proposed increase at those levels for 2014/2015 is the same for both remuneration approaches. General staff also expect to receive the same increase percentage for both approaches in 2014/2015. Analysing the Median column for the actual and proposed increases tables we see that when the increases are viewed independent of the remuneration approach, the proposed increases are slightly higher than the most recently issued increases. We also note that the ranges are tight i.e. there is not a big range of increase percentages being offered. The table shows that in this survey the median proposed increases for 2014/2015 are generally the same at all levels, irrespective of the remuneration approach adopted. However when looking across the range of percentiles as opposed to only the median, the trend is that proposed increases for general staff are slightly higher than for the other levels. In theory this makes sense in order to close the wage gap between the CEO and employees. This should be monitored carefully as a slightly smaller increase on a large number yields far more in rand terms than a slightly larger increase on a small number. Example: 7% of R100 000 = R7000 whereas 6.25% of R1 000 000 = R62 500 and the income gap between these two individuals will have increased by R55 500 Increases by Industry (Actual and Projected) The table below describes the expected increases as described by the various industry samples in the survey. All of the percentages shown express the median increase of the companies in the sample. The sample is unique in each calculation across an industry as some companies change their remuneration approach across different levels in the organisation. Where no figure is shown, the sample was too small to report on. None of the organisations in the Producer Services industry indicated the use of the basic salary plus benefits approach at CEO and executive level, and only one for management and general staff. We therefore have not reported on this. Table 12: Actual and Proposed Increases by Industry and Remuneration Approach

Industry

Remuneration Approach

CEO Actual

Executives

Proposed

Increase Increase Basic Salary plus Benefits Extractive

Actual

Proposed

Increase Increase

Managers Actual

Proposed

Increase Increase

General Staff Actual

Proposed

Increase Increase

5.00%

6.00%

5.50%

5.50%

5.75%

6.00%

7.75%

7.50%

7.00%

6.50%

7.00%

7.00%

7.00%

6.75%

6.75%

6.75%

6.75%

7.00%

6.75%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.50%

7.00%

7.50%

7.00%

7.00%

7.95%

6.84%

7.00%

6.42%

7.00%

7.50%

7.00%

8.00%

7.50%

8.25%

9.00%

7.30%

8.00%

7.00%

7.00%

6.80%

7.00%

Total Guaranteed Package Basic Salary plus Benefits

Transformative Total Guaranteed Package Basic Salary Distributive Services

plus Benefits Total Guaranteed Package

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African Human Capital and Labour Report: SOUTH AFRICA

Industry

Remuneration Approach

CEO Actual

Executives

Proposed

Actual

Increase Increase Basic Salary Producer Services

Managers

Proposed

Actual

Increase Increase

General Staff

Proposed

Actual

Increase Increase

Proposed

Increase Increase

-

-

-

-

-

-

-

-

6.50%

7.00%

6.50%

6.50%

6.50%

6.50%

6.50%

6.50%

-

-

6.00%

6.25%

6.25%

6.25%

6.40%

6.25%

6.85%

7.00%

6.85%

7.00%

7.00%

7.00%

7.80%

7.00%

-

-

7.00%

7.00%

7.00%

7.00%

7.00%

6.75%

6.50%

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

5.50%

plus Benefits Total Guaranteed Package Basic Salary plus Benefits

Social Services

Total Guaranteed Package Basic Salary

Personal Services

plus Benefits Total Guaranteed Package

5.10. Industrial Relations Framework 5.10.1. Labour Legislation The Constitution of the Republic of South Africa, Section 23 (Act 5 of 2005), guarantees: 1. Every citizen the right to: •

fair labour practices

•

form and join a trade union

•

participate in the activities and programmes of a trade union

•

strike.

2. Every employer the right to: •

form and join an employers’ organisation

•

participate in the activities and programmes of an employers’ organisation.

3. Every trade union and employers’ organisation the right to: •

determine its own administration, programmes and activities,

•

organise, and

•

join a federation.

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Furthermore, under the Constitution (Section 23), every trade union, employers’ organisation and employer has the right to engage in collective bargaining.518 The Labour Relations Act (Act 66 of 1995) aims at advancing economic development, social justice, labour peace and democratisation of the work place, and governs the following aspects of employer-employee relations: 519 •

Freedom of association and general protections

•

Organisational rights

•

Collective agreements

•

Bargaining councils

•

Bargaining councils in the public service

•

Statutory councils

•

Strikes and lockouts

•

Workplace forums

•

Trade unions and employers’ organisations

•

Dispute resolution

•

The Labour Court

•

The Labour Appeal Court

•

Unfair dismissals and unfair labour practices

•

Code of good practice: Dismissals

The Commission for Conciliation, Mediation and Arbitration (CCMA) is a dispute resolution body established in terms of the Labour Relations Act mentioned above. Employees who are of the opinion that they have been ill-treated or unfairly dismissed by their employers, may approach the CCMA to investigate their case.520 CCMA deals with any disputes that arise from labour matters, such as unfair dismissals; strikes or lockouts not in compliance with the Labour Relations Act; deadlock situations arising from illegal strikes or unresolved salary negotiations. Employees may also approach the CCMA to report what they conceive to be unfair labour practices in an organisation; or with grievances they have against employers, on condition that they have exhausted all possible grievance resolution procedures at their employer’s organisation. A synopsis of these processes is given below: •

Conciliation: process where a commissioner meets with the parties in a dispute and investigates ways in which to resolve the dispute by agreement.

•

Mediation: the commissioner decides, in the conciliation process, whether to go ahead with mediation, facilitation or making recommendations in the form of an advisory arbitration award.

African Human Capital and Labour Report: SOUTH AFRICA

•

Arbitration: if the dispute is unresolved after conciliation or mediation, the parties may request the CCMA to resolve the dispute through arbitration. At an arbitration hearing, the commissioner gives both parties an opportunity to fully state their case. The commissioner then makes a decision on the issue in the dispute. The decision, i.e. the arbitration award, is legally binding on both parties.

The CCMA’s website can be visited for the forms for conciliation, mediation and arbitration; the exact procedure to be followed to refer a matter; case studies and more (http://www.ccma.org.za/). The Labour Court is a dispute resolution body with higher jurisdiction than the CCMA, established in terms of the Labour Relations Act. Employees who are of the opinion that their case has not been dealt with optimally or favourably by the CCMA, may approach the Labour Court to investigate their case. The Labour Court is on the same level as the High Court for civil or criminal matters. The Basic Conditions of Employment Act (Act 75 of 1997) aims at advancing economic development and social justice, and governs the following aspects of employment: •

Regulation of working time

•

Leave

•

Particulars of employment and remuneration

•

Termination of employment

•

Prohibition of child labour and forced labour

•

Variation of basic conditions of employment

•

Sectoral determinations

•

Employment conditions commission

•

Monitoring, enforcement and legal proceedings

•

General provisions of employment

The Southern African Legal Information Institute (SAFLII) makes the most recently published legal information available on its website, such as the Acts as amended by government; case history and legal materials from other countries in the region. Their website can be visited at: http://www.saflii.org/za/ legis/consol_act/. The labour legislation in South Africa is extensive. There are various acts, codes and regulations covering various aspects of employer-employee relations and entail the following: 1. General provisions a.

Constitutional law 

b. Labour codes, general labour and employment acts  c.

Civil, commercial and family law 

d. Criminal and penal law  e.

Human rights 

f.

Economic and social policy 

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2. Freedom of association, collective bargaining and industrial relations  3. Elimination of forced labour  4. Elimination of child labour, protection of children and young persons  5. Equality of opportunity and treatment  a.

Non-discrimination 

b. Workers with family responsibilities  6. Tripartite consultations  7. Labour administration  a.

Labour inspection 

b. Labour statistics  8. Employment policy, promotion of employment and employment services  a.

Disabled workers 

b. Older workers  9. Education, vocational guidance and training  10. Employment security, termination of employment  11. Cooperatives  12. Conditions of employment  a.

Labour contracts 

b. Wages  13. Conditions of work  a.

Hours of work, weekly rest and paid leave 

14. Occupational safety and health  a.

Protection against particular hazards 

b. Protection in certain sectors of economic activity  15. Social security (general standards)  a.

Medical care and sickness benefit

b. Old-age, invalidity and survivors benefit  c.

Employment accident and occupational disease benefit 

d. Unemployment benefit  e.

Social assistance and services 

f.

Administration and financing 

16. Maternity protection  17. Migrant workers 

African Human Capital and Labour Report: SOUTH AFRICA

18. Seafarers  a.

Seafarers - Vocational guidance and training 

b. Seafarers - Certification of qualifications and identity documents  c.

Seafarers - Occupational safety and health and welfare 

19. Fishers  20. Indigenous and tribal peoples  21. Specific categories of workers  a.

Agriculture workers 

b. Mining and quarrying workers  c.

Manufacturing workers 

d. Electricity, gas and water workers  e.

Construction workers 

f.

Hotel, restaurant and shop workers 

g.

Transport and communication workers 

h. Banking, finance, insurance workers  i.

Community, social and personal services workers 

j.

Public and civil servants 

k.

Nursing personnel 

l.

Teachers 

22. Domestic workers  23. International agreements  a.

International social security agreements 

b. Other international agreements  PDF versions of the labour legislation for South Africa can be obtained on the International Labour Organization’s database, NATLEX: http://www.ilo.org/dyn/natlex/natlex_browse.country?p_lang=en&p_ country=ZAF

5.11. Conditions of Employment Table 5.31 indicates the conditions of employment for the employed, i.e. whether they have a written contract or verbal agreement in place; and whether the contract/agreement is of permanent, limited or unspecified nature.521 The Basic Conditions of Employment Act (BCEA) governs that employers should have at least a verbal or written contract of employment in place for every employee in their service. The majority of employees (76% of the total in 2008 and 80% in 2013) had formal written contracts with their employers, according to the Quarterly Labour Force Survey, 1st Quarter 2014 results.522 The remainder of employees had verbal contracts with their employers (2.9 million employees in 2008 and 2.35 million in 2014) which represents a 20% decrease from 2008 (see Figure 5.14).

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Table 5.31: Conditions of employment, nature of contract and annual salary negotiations (000s) (2008–2014)

Indicator

Q4 2008

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Nature of contract/agreement (Both genders) Written contract

9,520

9,246

9,192

9,737

9,854

10,466

10,685

Verbal agreement

2,937

2,590

2,501

2,449

2,459

2,570

2,350

Limited duration

1,498

1,416

1,356

1,536

1,631

1,975

1944

Permanent nature

7,773

7,623

7,662

7,933

7,922

8,046

8,165

Unspecified duration

3,185

2,797

2,675

2,717

2,760

3,015

2,926

How annual salary increment is negotiated Employer only

–

–

5,351

6,139

6,273

7,019

7,169

Union and employer

–

–

2,740

2,767

2,837

2,884

2,761

Bargaining council

–

–

1,114

1,072

1,132

1,073

1,195

Individual and employer

–

–

1,706

1,516

1,420

1,294

1,185

No regular increment

–

–

705

624

591

705

672

Other

–

–

76

69

59

61

53

12,456

11,836

11,693

12,187

12,313

13,036

13,035

Both genders

Thousands

Source: Statistics South Africa, 2014.523 12

10

(000s)

8

Written contract

6

Verbal agreement 4

2

0 Q4 2008

Q1 2014 Quarter

Source: Statistics South Africa, 2014. 524

Figure 5.14: Nature of contract: Verbal agreement/Written contract (000s) (Q4 2008 & Q1 2014)

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The number of permanently employed persons in 2008 was 7.7 million and this number increased to 8.17 million in 2014, an increase of 5% from 2008. The number of employees with a limited duration contract was 1.49 million in 2008, and this number increased to 1.94 million in 2014, a 30% increase from 2008. The number of employees with contracts of unspecified duration was 3.1 million in 2008, and this number decreased to 2.9 million in 2014, a decrease of 8.1% over 2008 (see Figure 5.15 and Table 5.31).525

9,000 8,000 7,000

(000s)

6,000

Limited duration

5,000

Permanent nature

4,000

Unspecified duration

3,000 2,000 1,000 0 Q4 2008

Q1 2014 Quarter

Source: Statistics South Africa, 2014. 526

Figure 5.15: Nature of contract: Duration (000s) (Q4 2008 & Q1 2014)

From Table 5.31 above, it is clear that the majority of employers determine their employees’ annual salary increases, with no input from their employees: in 2010, 45.76% of employees faced this scenario, and in 2014 this percentage had increased to 55% (also see Figure 5.16).527

manently employed

In 2014 (Q1) about 4 million (30%) of the employee’s salary/wage

increments

The number of per-

were

negotiated

or

determined between the union and employer or through the Bargaining Council.

528

At the same time, the number of other employees

persons in 2008 was 7.7 million and this number increased to 8.17 million in 2014.

that were involved in pay-increase decisions or negotiations has decreased by 30% from 1.7 million in 2010 to 1.19 million in 2014 (see Table 5.31 above).529 The number of employees that do not receive a regular salary increase was 705,000 in 2010, but in 2014 this number had decreased to 672,000 (see Figure 5.16).530

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8,000

(000s)

7,000

6,000

Employer only

5,000

Union and employer Bargaining council

4,000

Individual and employer

3,000

No regular increment

2,000

Other 1,000

0 Q4 2008

Q4 2009

Q4 2010 Quarter

Q4 2011

Q4 2012

Source: Statistics South Africa, 2014.531

Figure 5.16: Annual salary increment negotiations (000s) (2008–2014).

5.12. Trade Unions, Industrial Action and Dispute Resolution 5.12.1. South African Industrial Relations The South African Industrial Relations system is built on a tripartite system consisting of employers, labour (unions) and government through its institutions such as the CCMA. New changes to the existing labour legislation are to be considered by the National Economic Development and Labour Council (Nedlac). Nedlac is the seat of national social dialogue in South Africa and was set up through an Act of Parliament. Nedlac functions, amongst others, through a number of Chambers. The Labour Market Chamber considers all proposed labour legislation relating to the labour market policy before it is introduced in Parliament. The Labour Market Chamber functions on a consensus model involving business, government and labour.532

5.12.2. Trade Unions In terms of the Labour Relations Act (Act 66 of 1995), any citizen has the right to form and join a trade union; participate in the activities and programmes of a trade union; and to strike. Whether or not an employee joins a trade union, remains the employee’s choice. The South African Labour Guide lists 198 registered trade unions currently in existence (January 2014). These range from trade unions for transport workers, metal workers, mine workers, hospitality industry workers, to trade unions for finance industry and insurance and banking workers. The full list of trade unions and their contact details are available on The South African Labour Guide’s website, at: http:// www.labourguide.co.za/general/561–registered–trade–unions–in–south–africa.

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The Congress of South African Trade Unions (COSATU), by far the largest Trade Union Confederation, was launched in December 1985 committing it to a non-racial, non-sexist and democratic South Africa. COSATU is in a strategic political alliance with the African National Congress (ANC) and the South African Communist Party (SACP). At the launch COSATU represented less than half a million workers organised in 33 unions. Currently the confederation has more than two million workers. COSATU’s main broad strategic objectives have always been:

The South African Labour

•

Guide lists 198 registered

To improve material conditions for their members and of the working people as a whole.

trade unions currently in

•

To organise the unorganised.

existence (January 2014).

•

To ensure worker participation in the struggle for peace and democracy principles.

•

From its inception, the federation is based on the following core principles: o

Non-racialism – COSATU rejects apartheid and racism in all its forms. They believe that all workers, regardless of race, should organise and unite.

o

Worker control – workers must control the structures and committees of the federation.

o

Paid-up membership – COSATU and its affiliated unions strive for self-sufficiency.

o

One industry, one union – one country, one federation.

o

International worker solidarity.

The proportion of the labour force that are members of trade unions has increased from 2010: 3.55 million to 3.72 million in 2013, a 5% increase from 2010 (see Table 5.32 and Figure 5.17).533 Table 5.32: Trade union membership – both genders (000s) (2010–2014)

Trade union membership

Q4 2010

Both genders

Q4 2011

Q4 2012

Q4 2013

Q1 2014

11,693

12,187

12,313

13,036

13,035

Yes

3,559

3,610

3,682

3,728

3,670

No

7,859

8,335

8,341

8,950

9,011

274

241

289

358

354

Don’t know Source: Statistics South Africa, 2014.534

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4,000

3,500

3,000

(000s)

2,500

Both genders 2,000

Males Females

1,500

1,000

500

Q4 2010

Q4 2011

Q4 2012 Quarter

Q4 2013

Q1 2014

Source: Statistics South Africa, 2014.535

Figure 5.17: Trade union membership by gender (000s) (2008–2014)

Trade union membership is higher among males than among females, as indicated in Table 5.33 below, outnumbering females 3:2. In 2010, 2.1 million males were trade union members, compared to 1.4 million females; and in 2013 2.2 million males and 1.5 million females were members of trade unions. The number of males has increased by 4.15%, and the number of females by 5.54% from 2010.536 Table 5.33: Trade union membership by gender (000s) (2010–2014)

Member of a trade union

Q4 2010

Q4 2011

Q4 2012

Q4 2013

Q1 2014

Both genders

3,559

3,610

3,682

3,728

3,670

Males

2,118

2,147

2,178

2,206

2,164

Females

1,442

1,464

1,505

1,522

1,505

3:2

3:2

3:2

3:2

3:2

Representation of males to females Source: Statistics South Africa, 2014.537

5.12.3. Industrial Action Employer-trade union relations in South Africa is taking strain. Strike activities have escalated considerably since 2010, not only in the number of strikes, but that large percentages of these strikes are unprotected wildcat strikes which, in many cases, are turning violent. Apart from recent and last year’s massive strikes in the mining industry, strikes in the motor and auto industry during 2013 inflicted huge losses. The Post Office also suffered due to a strike in February 2014, similar to the one in 2013.538 The Tongaat Hulett refinery in Durban was also hit by hundreds of workers who went on strike in June this year. 539

African Human Capital and Labour Report: SOUTH AFRICA

The main interest, though, is on the industrial action on the platinum belt. The Association of Mineworkers and Construction Union (AMCU) and the Platinum mines, i.e. Anglo Platinum, Impala Platinum and Lonmin, were involved in a wage dispute resulting in a five-month strike, the largest in the 130 year history of South African mines. The strike involved 70,000 AMCU members. According to the three mining companies, the strike has cost them ZAR 22 billion (USD 2.05 billion) in revenue, while workers have missed out on ZAR 10 billion in wages. 540 AMCU became prominent in 2012 when it established itself on the platinum belt. In August 2012, 34 of its members who were on a wildcat strike at Lonmin, a Marikana mine, were killed by the police. The strike also threatens to destabilise labour relations across South Africa as other groups, in particular NUMSA, the metal workers union, are also positioning themselves for strikes in pursuit of wage increases higher than inflation.541 In the aftermath of the Platinum Strike, the largest in South African history, various post-mortems will surely be held. At this stage, it is already clear that deep-rooted socio-economic conditions resulting in poverty and general distrust, might be at the heart of the demands for a radical increase in wages leading to this massive strike. Wilson is of the opinion that the migrant labour system, which has been embedded for so long in the mining industry, has to change. He argues that firstly, a country cannot build and maintain a peaceful modern industrial society in which thousands of men are separated from their families for months (if not for years) from time to time during their working lives. It is also unreasonable to expect workers to maintain two homes based on low wages. Secondly, the existing management labour system generates poverty in the region from where labour originates.542 Wilson argues that a new policy is needed. The migrant labour system, stemming from the colonial and apartheid era, should be ended. However, this process will have to be sensitive and flexible, involving those in the “sending” areas as well as those in the new areas of work. In order to address this, there are two requirements:543 The first is the need for imaginative and productive investment in the places from which migrants come. In the Transkei, this means investments in proper roads and the development of new models of agriculture. The second requirement is for collaboration between business and the government, at both local and national level, to support the proper urbanisation of migrant workers and their families through the building of affordable houses and adequate urban infrastructure, including schools and playing fields, in exactly the same way as happened for white miners moving to the Free State gold fields after the Second World War, or for black miners moving to the Copper Belt at the time of the Zambian independence. Molopyane agrees broadly with Wilson on the causes of a socio-economic nature.544 He maintains that the Mining Charter will have to be rewritten in order to address the socio-economic back logs and existing conditions. Proper monitoring and evaluation processes and systems must also be implemented. Another

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aspect that has to be addressed, is the unions’ social distance from the reality of the workers. “Labour in mining must face the unconformable truth that union leaders have developed values that are at odds with those of their workers. They have become less concerned about the ideas of workers and more obsessed with staying in power”.545 Molopyane concludes that labour relations in post-apartheid SA must be structured in the context of poverty, inequality and unemployment. 546 Hartford is of the opinion that the root cause is a lack of trust at all levels. He proposes the following remedies and steps to redress and improve the trust levels in the mining industry and, particularly, on the Platinum mines: 547 First, business and labour leaders should end their suboptimal threats to each other and the country: the talk of pending retrenchments versus strikes to defend jobs and end all retrenchments; the talk of mechanisation versus the defence of labour-supply numbers; the talk of investment versus disposal and disinvestment; the talk of royalties and windfall taxes and nationalisation and expropriation. All of this talk needs to stop. It is empty and drives everyone down to the discourse of the lowest common denominator, where threats and allegations rule over reason and economic and social logic. Second, and in the place of the suboptimal threats and counter threats, we need a sustained and deep stakeholder conversation at a number of levels: between management and its employees; between organised labour and management; between local management, labour and local communities; between the senior leaders and the government, business and labour. And this series of sustained conversations needs to be focused on a singular outcome: the development and implementation of a “platinum mining development plan”. Such a plan would embrace a number of core development areas: •

Building workplace trust and understanding with employees by developing frontline management’s capacity to visibly and effectively communicate and solve employee problems, every shift of every day of the week;

•

Building partnerships with organised labour around the strategic future through integrated mine development plans that embrace all aspects of mining life: jobs, skills, training, shifts, migrancy, accommodation, transport, credit, lifestyle, performance rewards and windfall profit-sharing;

•

Building partnerships with employees and communities and local government around environment, social and labour standards, empowerment and entrepreneurial opportunities, job creation and wealth-sharing in ways that align the future of the community with the economic wellbeing of mining today and beyond mining in the future; and

•

Building platinum-sector social accords among stakeholders from labour, business and the government by building on the work of the deputy president in a way that deepens it to the core drivers of social dislocation: the collapse of migrant labour nuclear families; the inequality and poverty in urban and rural areas; the optimum wealth-sharing formula – from the tax regime, to windfall royalties, to reliable dividends, to employee performance rewards and ownership certainty; to the regulatory regime, the supply chain and measures to bring down the cost of mining; to beneficiation, innovation and new markets at home and abroad.

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It is, therefore, clear that a fundamental new approach will have to be taken, an approach based on restoring trust and the social-economic fabric of the workers. At the same time the future profitability of companies should not be harmed. Based on the Annual Industrial Action Report 2012, compiled by the Department of Labour (DoL) (no later report is available) the number of strikes increased from 67 in 2011 to 99 in 2012 (see Figure 5.18), and the number of working days lost increased from 2.8 million to 3.3 million over the same period.548 In 2008 the number of days lost was under 500,000 (see Figure 5.19). The same trend was evident regarding working days lost per 1,000 employees: 208 in 2011, rising to 244 in 2012 (a 17.3% increase). In 2008 the corresponding figure was only 36 (see Figure 5.20). 549 Wages lost due to the strikes were substantial: in 2012

Of major concern in 2012 was the fact that 54% of strikes were unprotected and mainly concentrated in the mining industry.

it was ZAR 6.7 billion, which represents a substantial increase from 2011 and a drastic increase since 2008 (see Figure 5.21). Of major concern in 2012 was the fact that 54% of strikes were unprotected and mainly concentrated in the mining industry.550 120

100

Number of stoppages

80

60

Work stoppages

40

20

0 2008

2009

2010 Year

2011

Source: South African Department of Labour (DoL), 2012. 551

Figure 5.18: Work stoppages in South Africa (2008–2012)

2012

162

Millions

African Human Capital and Labour Report: SOUTH AFRICA

25

Working days lost

20

15

Working days lost 10

5

0 2008

2009

2010 Year

2011

2012

Source: South African Department of Labour (DoL), 2012. 552

Figure 5.19: Working days lost (2008–2012)

1,800 1,600 1,400

Time–loss ratio

1,200

Working days lost per 1,000 employees due to strikes

1,000 800 600 400 200 0 2008

2009

2010 Year

2011

Source: South African Department of Labour (DoL), 2012. 553

Figure 5.20: Working days lost per 1,000 employees (2008–2012)

2012

163

Billions

African Human Capital and Labour Report: SOUTH AFRICA

7

6

Amount in ZAR

5

4

Wages lost due to work stoppages (ZAR)

3

2

1

0 2008

2009

2010 Year

2011

2012

Source: South African Department of Labour (DoL), 2012. 554

Figure 5.21: Wages lost in ZAR value (2008–2012)

The largest number of lost workdays occurred in the mining industry with 2.7 million working days lost, which was 82.4% of the total and is also 636% higher than during 2011. The Agriculture Sector also suffered from strike actions, especially in the Western Cape, with 123,369 working days lost. Manufacturing saw a substantial decrease from 826,123 days in 2011 to 188,804 in 2012 (see Table 5.34 and Figure 5.22).555 Table 5.34: Industry comparison of number of work stoppages, working days lost & working days lost per 1,000 employees (2011 & 2012)

  Industry

Number of work

Working days lost

stoppages

Working days lost per 1,000 employees

2011

2012

2011

2012

2011

2012

Agriculture

3

5

16,037

123,369

25.5

180.1

Community

15

28

1,461,123

108,384

503.5

35.7

Construction

2

5

28,034

10,124

26.5

9.5

Electricity

2

3

70

1,484

0.8

15.1

Finance

3

1

976

964

0.6

0.5

Manufacturing

14

18

826,123

188,804

461.8

109.1

Mining

11

19

370,473

2,728,359

1,132.9

7,642.4

Transport

5

14

53,505

135,186

30.8

165.6

Wholesale

12

6

50,315

13,210

16.4

4.5

Source: South African Department of Labour (DoL), 2012. 556

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African Human Capital and Labour Report: SOUTH AFRICA

30

Number of stoppages

25

20

15

2011 2012

10

5

0

Industry

Source: South African Department of Labour (DoL), 2012. 557

Figure 5.22: Work stoppages per industry (2011 & 2012)

Most of the strikes lasted six to ten days (38.5% in 2012). A total of 35.2% strikes lasted for longer than ten days (see Figure 5.23).558 1

Percentage of stoppages

1

0

2011

0

2012 0

0

0 < 1 day

1–5 days

6–10 days

11–15 days 16–20 days 21–30 days 31–40 days Duration

> 40 days

Source: South African Department of Labour (DoL), 2012. 559

Figure 5.23: Percentage distribution of work stoppages by duration (2011 & 2012)

More than 80% of the working days lost, are due to disputes over wages, bonuses and other forms of compensation. During 2011 that was about 96%, but in 2012, 2.2% of working days lost were due to socio-economic and political conditions. However, during 2011 this scenario was almost non-existent (see Table 5.35).560

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Table 5.35: Distribution of working days lost by principal cause of dispute (2011 & 2012)

Principal cause

2011

% of total

2012

% of total

% difference

2,687,786

95.80%

2,699,411

81.60%

–14.20%

Working conditions

4,719

0.20%

74,684

2.30%

2.10%

Disciplinary matters

0

0.00%

0

0.00%

0.00%

20,258

0.70%

33,794

1.00%

0.30%

3,011

0.10%

71,314

2.20%

2.10%

Secondary action

612

0.00%

2,082

0.10%

0.10%

Retrenchments/redundancy

618

0.00%

0

0.00%

0.00%

Refusal to bargain

4,740

0.20%

13,979

0.40%

0.20%

Trade union recognition

3,048

0.10%

1,603

0.00%

–0.10%

56,178

2.00%

30,364

0.90%

–1.10%

25,687

0.90%

382,653

11.70%

10.80%

2,806,657

100.00%

3,309,884

100.00%

0.00%

Wages, bonus and other compensation

Grievances Socio-economic and political conditions

Other compensation combined with other factors Other reasons Total

Source: South African Department of Labour (DoL), 2012. 561

Strike activity in 2013 was more prevalent than in 2012 and one can expect the rate of working days lost in 2013 to be higher than 2012. Working days lost due to strikes in 2014 will be among the highest recorded in history— if not the highest. The strike on the platinum belt alone will result in about 10 million working days lost.

5.13. Labour Market Efficiency The Africa Competitiveness Report 2013 compiled eight indicators which measure labour market efficiency. Below is a short description of each:562 1. Co-operation in labour-employer relations How would you characterise labour–employer relations in your country? [1 = generally confrontational; 7 = generally co-operative] 2. Flexibility of wage determination How are wages generally set in your country? [1 = by a centralised bargaining process; 7 = up to each individual company]

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3. Hiring and firing practices How would you characterise the hiring and firing of workers in your country? [1 = impeded by regulations; 7 = flexibly determined by employers] 4. Redundancy costs Redundancy costs in weeks of salary (2011) This variable estimates the cost of advance notice requirements, severance payments, and penalties due when terminating a redundant worker, expressed in weekly wages. 5. Pay and productivity To what extent is pay in your country related to productivity? [1 = not related to worker productivity; 7 = strongly related to worker productivity] 6. Reliance on professional management In your country, who holds senior management positions? [1 = usually relatives or friends without regard to merit; 7 = mostly professional managers chosen for merit and qualifications] 7. Brain drain Does your country retain and attract talented people? [1 = no, the best and brightest normally leave to pursue opportunities in other countries; 7 = yes, there are many opportunities for talented people within the country] 8. Female participation in labour force Ratio of women to men in the labour force in 2010. This measure is the percentage of women aged 15–64 participating in the labour force divided by the percentage of men aged 15–64 participating in the labour force. With regard to four of the eight indicators, South Africa performs among the worst in the world (see Table 5.36). The worst indicators being “cooperation in labour-employer relations”, where the country ranks 144th out of 144 countries — the survey results were compiled before the present strike on the platinum mines! The country is being viewed similarly with regard to “flexibility of wage determination” and “hiring and firing practices”: on all these indicators, Kenya and Nigeria are ranked far higher than South Africa.

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Table 5.36: Regional comparison: Labour Market Efficiency of South Africa and selected countries (2013)

 

South Africa

Labour Market Efficiency Indicator Cooperation in labour-employer

Value

Kenya

Rank/ 144

Value

Nigeria

Rank/ 144

Value

Rank/ 144

2.9

144

4.2

77

3.9

115

Flexibility of wage determination

2.8

140

5.0

75

5.0

74

Hiring and firing practices

2.2

143

5.0

11

4.9

17

Redundancy costs, weeks of salary*

9.0

33

16.0

73

16.0

76

Pay and productivity

2.9

134

4.0

59

3.6

100

Reliance on professional management

5.6

13

4.3

63

4.4

58

Brain drain

3.8

47

3.4

67

3.8

48

Women in labour force, ratio to men

0.8

85

0.9

47

0.8

80

relations

Source: World Economic Forum, 2013.563 Note: Values are on a 1-to-7 scale, unless otherwise indicated with an asterisk (*), with 7 being the most desirable.

The rankings were confirmed by a point of view from CDE which raised the following concerns regarding the current labour market regime: 564 •

The Commission for Conciliation, Mediation and Arbitration: This tends to be used disproportionately by lower-skilled workers, and cases tend to be found in their favour, making this institution relatively burdensome for employers of low-skilled workers. The resolution for a case takes on average 1.4 days, imposing burdens on employers, particularly in smaller firms which lack specialised human resources staff.

•

Hiring and firing regulations: In 2011, South Africa was ranked third last out of 142 countries in terms of its hiring and firing processes by the Global Competitiveness Report, and employers indicate that time, trouble and hassle of both these processes are obstacles to hiring new staff.

•

Collective bargaining, wage setting and bargaining council extensions: Collective bargaining and unionisation are associated with higher wages and lower employment levels in South Africa. One study suggested that those employees, who are both members of a union and covered by a bargaining council, earn 16% more than those who belong to neither. Bargaining councils are typically dominated by large firms and unions, but their agreements are often extended to all businesses in a sector. This practice is particularly damaging to small firms and entrepreneurs, and one estimate of its impact suggests that it may account for one percentage point of unemployment.

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The result is that only about one young adult in eight is employed in South Africa, compared to two to five in other emerging economies. By driving up wages and making it difficult to dismiss unsuitable workers, South Africa’s current labour market regime has helped put the economy on an increasingly skill- and capital-intensive growth path. The country needs to find ways to make it easier for employers to hire unskilled and inexperienced workers. This requires making dismissal of unsuitable workers easier, ensuring that pay increases are in line with productivity growth, and freeing up the environment for business, especially labour-intensive small and medium-sized firms.565 Despite the general view about the rigidity imposed by the Labour Legislation Framework, a report by the global law firm DLA Piper, South Africa’s labour laws are among the best in the world. It is not as restrictive as is made out from time to time. According to the report, the South African labour laws offer a balance for both employers and employees.566 However, the Minister of Mineral Resources, Ngoako Ramatlhodi, in referring to the drawn-out platinum strike, was concerned that the law (LRA) does not make provisions for mechanisms to deal with long and drawn-out deadlocks in labour disputes.567 This was confirmed by President Zuma in his State of the Nation Address on 17 June 2014. The country is viewed more positively with regard to “redundancy costs in terms of weeks of salary” ranking 33rd in the world, well ahead of Kenya (73rd) and Nigeria (76th). With regard to “pay and productivity”, South Africa is again ranked among the lowest in the world with a ranking of 134th, well behind Kenya and Nigeria. According to Ferreira, South Africa’s labour productivity is at the lowest level in 46 years. From the peak in 1993 labour productivity has fallen by 41.2%. Since 1967, the output per worker per unit of capital has fallen from ZAR 7,297 to ZAR 4,924 a year which represents a decline of 32.5%.568 Ferreira concludes that “South Africa today, is less efficient than many of its emerging market competitors, its Labour Force is uncompetitive and labour productivity is much lower than that of the rest of the developing world”.569 This trend is continuing as indicated in section 5.9 pay increases are continuously higher than the inflation rate. “Reliance on professional management” is rated as among the best in the world. That is confirming South Africa’s high rating on “management and staff education and training”. The country ranks 13th in this regard, substantially higher than Kenya and Nigeria. The “brain drain” is still a concern and so is the number of “women in the labour force”. In this regard the country is ranked lower than Kenya and Nigeria. More women are, however, moving into the world of work as well as into management and other specialised positions.

5.14. Professional Human Resources Management in South Africa South Africa has a vibrant HR fraternity with the two main associations taking responsibility for professionalising this discipline being the South Africa Board for People Practices (SABPP) and the Institute for People Management (IPM). Both organisations register HR practitioners in different professional

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African Human Capital and Labour Report: SOUTH AFRICA

categories. The HR profession is served by various other associations, such as the South African Reward Association (SARA), Association for Talent Development (ATD), Society for Industrial and Organisational Psychology South Africa (SIOPSA), etc. The SABPP developed a South African HR Competency Model (see Figure 5.24).

Strategy 5 Capabilities

Talent Management HR Governance, Risk, Compliance Analytics and Measurement HR Service Delivery HR and Business Knowledge

ETHICS

Solution Creation and Implementation Interpersonal and Communication

4 Pillar

Citizenship for Future: Innovation, Technology, Sustainability

Core Competencies

Organisational Capability

PROFESSIONALISM

Leadership and Personal Credibility

Duty to Society

Source: SABPP, 2012.570

Figure 5.24: South African HR Competency Model

The five core competencies The five core competencies constitute the different layers of bricks or building blocks of the house. These competencies are the basic competencies all HR professionals need to be effective in the workplace: 1. Leadership and Personal Credibility: All HR professionals should possess leadership skills to drive the HR profession. Likewise, HR professionals should have personal credibility in organisations, irrespective of their level in the organisation, but this can only be achieved if they display a high level of competence in executing professional HR work. 2. Organisational Capability: Understanding the organisational context and needs of the business is critical in the process of planning and delivering HR practices. 3. Solution Creation and Implementation: HR professionals create, plan and implement HR solutions, including interventions and practices according to the needs of the organisation. 4. Interpersonal and Communication Skills: All HR work depends on successful relationships, and excellent interpersonal and communication skills are of utmost importance.

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5. Citizenship for the Future: Over and above the HR strategic partner role, the new business environment requires HR professionals who can drive innovation, optimise technology and contribute to sustainability. Thus, HR professionals become citizens for the future in ensuring sustainability of organisations and the environment. The core competencies form the foundation of the HR Capabilities, i.e. •

Strategy: HR professionals contribute to business strategy by drafting HR strategies aligned to the overall strategy of the organisation. However, this is more than just alignment—it requires the ability and influence to create people-driven business strategy in partnership with other executives.

•

Talent management: Once business and HR strategy are clear, HR professionals should work with line management in implementing a talent management plan for an organisation.

•

HR governance, risk and compliance: The capability of governing the HR function to make effective people decisions for the business, including managing HR risks and ensuring compliance to employment laws, rules, codes and HR standards, elevate HR from business partners to HR governors.

•

Analytics and measurement: Another core capability is to be able to generate a systematic and integrated approach to HR analytics and measures in demonstrating HR impact on the business.

•

HR service delivery: Ultimately HR professionals should be able to deliver high quality HR products and services for the organisation, by meeting or exceeding the needs of management, employees and other key stakeholders.

The competencies should be viewed against the SABPP code of ethics registered members are adhering to: SABPP Code of Ethics  As members of the profession of Human Resource Management in South Africa, we actively pursue the ideals of professionalism and are therefore ethically obliged to: • Bring meaning and quality of work life to the people we serve in our professional capacities • Ensure the sustainability of the organisations that we serve • Make a difference to the communities we touch. SABPP ethical values Responsibility Our first responsibility is to meaningfully transform the lives of those men and women that are employed by the organisations we serve. We have a further responsibility to contribute to the success and sustainability of the organisations that employ us or that we render a service to. It is our responsibility to comply with the expectations of our profession and fellow practitioners. We accept responsibility for the outcomes of our actions and interventions. In this we contribute to the greater goodness of society.

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Integrity As HR practitioners we are committed to exemplary ethical conduct that is characterised by honesty, objectivity, fairness of judgment, consistency of action and loyalty to our profession and the organisations and communities we engage with. We aim to grow the profession in a controlled and responsible manner. In that we strive to attract to the profession members with sound moral character and integrity. Respect We are unwaveringly committed to tolerance, respect for human dignity and upholding the human rights as prescribed by the constitution of the country. We treat all our stakeholders with respect and protect them from harm. We stand in service of our profession and its membership, those organisations that remunerate us for our professional contributions, and the communities we affect. We have an obligation to prevent breaches of principles of respect and to assertively object to such violations when they occur. We respect the confidentiality of information that is entrusted to us. Competence Professional registration of HR practitioners is a privilege afforded to individuals that have met the criteria for registration. We are committed to ensure professional credibility by actively evaluating and protecting the quality of professional education and training of those aspiring to enter the profession. We aspire to uphold the highest standards of continued professional development and improvement of competence of members of the profession. We enact this aspiration through role modelling and mentorship. It is our professional duty to integrate and apply sound human resource management principles, policies and practices in all aspects of people management and to assess the value that we add. We strive to formulate generally accepted HR practices that adhere to criteria of scientific and feasibility proportions. It is our quest to build the field of human resource management by promoting and supporting rigorous research. The SABPP is also in the process of developing a set of HR Standards which will guide HR Practitioners in delivering professional HR Practices in their respective organisations. For more information about the SABPP, access www.sabpp.co.za . The IPM offers various courses in labour relations, human resources management and managing training and development. The Institute is also busy developing an HR competency model. The IPM has various international affiliations, such as the World Federation of People Management Associations (WFPMA). For further information, visit the IPM website: http://www.ipm.co.za/

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5.15. Implications, Challenges and Recommendations 5.15.1. Labour Market Realities and Challenges South African has a substantial unemployment problem which stems from the following realities: 1. The country has a dual economy with a highly developed modern private sector and a vibrant informal sector, ranging from subsistence farming to a kombi taxi industry. The formal sector has become very capital intensive; it requires more highly skilled employees thereby reducing many opportunities for semi-skilled and unskilled people. With an economy that is stagnant, very few job opportunities are created in this sector. The health of the informal sector is to a certain extent a function of growth in the formal sector. For example, growth in taxi passengers is to a large extent dependent on the extra number of people employed in the formal sector. The informal sector is also struggling to create extra jobs; for instance, jobs in subsistence farming decreased by about 100 000 over the last four years.

The reality is that there is an oversupply of unskilled and semi-skilled workers or those with less than 12 years education, and a shortage of highly skilled people, especially in technical and health sectors.

2. Long-term unemployment (or longer than a year) make up 66% of the unemployed. The impact of this trend is severe: people lose the education and skills they acquired previously due to a lack of actually using it. Furthermore, the self-esteem and self-worth of these people decrease significantly. This phenomenon has other socio- and psychological fallouts, one being the point made in (3) below. 3. Discouraged work seekers more than doubled to 2.36 million over a six year period. 4. Youth unemployment (15 – 24 years) is now at 53.2%. 5. Lower education correlates strongly with education levels: 42% of those with less than 12 years’ education are unemployed. 6. Employment opportunities in rural areas are the lowest. At the same time, the costs of reaching the urban areas to search for jobs are high. Finding answers to the unemployment situation is complex; however, there are many opportunities that can be utilised and strategies that can be implemented, for instance: a.

Upgrading education facilities and resources at schools and FET colleges, building new classrooms and schools and adding sports fields, can create thousands of jobs. These projects are mostly labour intensive. The same applies to the on-going maintenance of the facilities.



Equally, the upgrading, fixing and expanding of healthcare (hospitals and clinics) can create and sustain thousands of jobs. Even more jobs can be created and sustained by sorting out the service delivery backlogs and bottlenecks.

b. Economic sectors, such as Tourism and Hospitality, Agriculture and Education should be targeted to be upscaled and expanded quickly. Over the medium-term these sectors can create a significant number of new job opportunities. It is important that these sectors should be targeted, because creating substantial additional employment in the Manufacturing and Mining

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sector will take much longer. The Mining and Manufacturing sectors have to regain confidence quickly from investors; however, there is a continuous drive towards cost-containment and improved productivity which also involve mechanisation and slow job-growth. c.

Focus on the unblocking of bottlenecks. Task teams appointed by Government, for instance, can quickly address the backlogs in passing building plans in various municipalities and metros. Hundreds (if not thousands) of new jobs can be created within a few weeks, not only in the building and construction areas, but also along the total value and supply chain.

d. Provide better labour market information to job searchers. The Department of Higher Education started with the LIMP project. This is highly commendable and should be supported. However, it will probably take a few more years to complete and implement successfully. Interim measures should be found to bring information about job opportunities and the job market to those in the poorer, more rural areas. e.

Upgrade and expand the youth subsidy programme, job fund, as well as the Expanded Works Programmes. While this is necessary, Government should also realise that sustained job creation is only possible through economic growth and growth in the private sector. Government economic policy needs to be addressed in this regard. (See 5.15.2 below.)

Bhorat, in the Development Policy Research Unit (DPRU) Working Paper 2012, makes six policy suggestions to create more employment in South Africa: 571 1. Re-direct investable state funds toward a greater focus and emphasis on those listed companies that directly or indirectly create jobs.

Bhorat recommends that the Public Investment Corporation (PIC), with more than ZAR  1 trillion assets under management, can take a more activist position in investing with companies that directly or indirectly create jobs. Furthermore, the state can create a Jobs Creation Index fund which trades on the JSE, like SATRIX40. This fund will invest in those firms and companies which have shown high employment levels in the South African economy.

2. The wage subsidy re-considered.

Bhorat supports the concept of a wage subsidy which the government recently introduced to encourage youth employment.572

3. A transport subsidy for unemployed youth.

After 20 years of democracy, spatial apartheid laws have meant that residential areas continue to be defined by race and, in effect, socio-economic status. In short, most of the unemployed live in areas where the least number of jobs are available. In addition, it is very expensive for budget-strapped people to travel to where jobs are available. A travel/transport subsidy could alleviate this situation.

4. Change state procurement rules to grow the informal sector.

Bhorat makes the following two specific proposals:

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Firstly, it is proposed that a system of indirect access to state procurement be instituted, wherein those recipients of large state contracts are required to include (where practically feasible) an informal sector partner with the tender submission. In addition, monitoring of the contract outcomes should ensure that these informal sector operators are remunerated for effort at a pre–set minimum. Secondly, that specific state procurement contracts are exclusively targeted at microenterprises, to encourage and grow these businesses as well as create employment. One can imagine that state tenders around catering, provision of school uniforms, and some low-technology or service-oriented contracts with government, could be retained in large part for micro-enterprises only.573 5. Public employment services and labour market asymmetries.

The Department of Labour administers 135 public employment service offices, known as Labour Centres that are spread throughout the country. There is, however, little relationship between the unemployment rate at district council level and the budget allocation for the relevant labour centre. This situation should be rectified. In addition, more should be invested in the Labour Centres and, in order to upscale and expand the services, public-private partnership arrangements could be entered into.

6. Considering labour regulating changes at the margin In analysing the World Bank’s Cost of Doing Business Survey (DBS), the values for South Africa indicate that, while firing and hiring costs, together with the hours rigidity index are below the global average, it is the hiring and firing rigidity measures which are above the world average. This puts the spotlight, amongst other things, on the CCMA and the Labour courts: The CCMA functions efficiently as a dispute resolution body but is severely underresourced. The Labour Courts on the other hand, are notoriously inefficient. That an institution as central to labour market efficiency in the country as the CCMA needs to worry about cash flow, is an example of a labour market rigidity which can be avoided. It is recommended that a financing model which smoothens out any shortfall arising out of large increases in the caseloads of the CCMA be instituted, to ensure a more efficiently functioning labour market. 574 Simply put, the Labour courts system is inefficient in terms of time and resources in resolving key labour market cases. Ultimately though, the suggestion here is that it is entirely possible that the notion of labour market rigidity within South Africa may in fact be a function, not of the labour legislative regime, but rather the sub-optimal performance of labour market institutions such as the Labour Court and Labour Appeals court, together within the unnecessary financial uncertainties placed on an institution such as the CCMA. 575

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5.15.2. Government Economic Policy in terms of Job Creation 1.

Initiatives such as Expanded Wellness programmes, job funds, and social grants are necessary; however in term of substantial job creation that is sustainable it is not the answer. It is as if you apply a band aid strip to a deep bloody wound. It might provide relief over the short term but nothing more.



A massive privatisation programme in order to provide the spark for economic growth could be considered. This may result in broadening the corporate tax basis and overall lower taxes, better and more productive service delivery and reducing government spending. Shares should be granted to the employees of these organisations. In doing so, the wealth and inequality gap can be reduced. Countries such as Nigeria and Kenya are now privatising with sound spinoffs for the economy.

2. Large infrastructure investments are necessary; however, it takes too long to get it off the ground. Involve the private sector and the wheels will turn much more quickly. 3. Rethink mega projects, such as nuclear power stations. The construction, operation and maintenance of these plants are highly capital intensive, involving very high level skills (read expats or international consultants), but in many cases cost too much for a country such as South Africa. Smaller projects, specifically in the energy sectors, are more affordable and come online more quickly with higher labour intensity; for example, solar energy in the Karoo, more wind farms and smaller shale and gasdriven electricity plants that can be erected in the Eastern Cape.

5.15.3. Shortage of Highly Skilled People This specific priority was largely addressed in the Education chapter. If and where this shortage creates bottlenecks to grow an organisation, the industry and therefore the economy, it should be easier to appoint international expatriates in the short to medium-term.

5.15.4. Research in Youth Unemployment Considerable research needs to be done about the youth employment phenomena, like how they approach the search for work, their attitudes and expectations. CDE highlighted the following areas that pose research questions:576 •

Are young women and young men responding differently to the challenge of finding a job? If so, what are the factors that explain these differences?

•

How do young people access local support networks and the government transfers that go to the elderly and single mothers? How does this affect family structure? Does this affect levels of participation in the labour force and the kinds of work that might be accepted?

•

Where are young people finding guidance and information about how the job market and the wider world works? What is the role of religious, sporting and political organisations in this? In what way does a dysfunctional school system affect young people and their attitudes to adults and work?

•

How do young people learn about the world of work, and what opportunities exist to provide them with more effective information via radio and televisions, or through schools or through other organisations?

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5.15.5. The Human Resources Profession The broader HR, Human Capital and Industrial Psychology professional fields are too fragmented. They all have more or less the same broad mission and objectives to professionalise the field. A way should be found to bring those organisations together under one umbrella. Too many resources are allocated merely to ensure that these organisations are functioning. If all the duplications of costs could be allocated to develop the profession at large, the country and society will benefit tremendously. One strong organisation can address issues of national importance, such as unemployment and can have an impact at government policy level.

5.15.6. Adversarial Industrial and Employee Relations The trend over the last few years of more strikes which are unprotected and being of a wild cat nature, of being prolonged and turning violent, should be addressed as a matter of urgency by all the stakeholders. Unrealistic wage and benefit demands, but at the same time the gap in income and poor socio economic conditions, should be put on the agenda. This is where a strong HR professional body could play a major role in taking the initiative to arrange such a “future search” to the benefit of society. The widening trust “gap” has to be addressed and rectified quickly. New governance structures has to be considered; for example, by including union officials or representatives at board level as non-executives (similar to the German model), and by introducing employee share schemes. Now is the time to consider various new options.

5.15.7. Artisan Training The NDP targets 20,000 artisans to be trained per year, reaching 30,000 by 2030. That is a substantial increase from the existing 13,000 per annum. The private sector and government enterprises can play a major role in this regard by actually training in excess of their existing needs. A mere 10% excess could address existing technical skills bottlenecks in the economy. Doing that could speed up economic growth— and these organisations would benefit directly. Here is the idea to consider: by training artisans to be entrepreneurs a substantial number of smaller businesses could be created, so the following proposals should be contemplated: 1. Create an artisan-entrepreneurship programme. 2. Pre-select through a psychometric evaluation programme prospective artisans who, if successful, could qualify for an entrepreneurship/small business programme. Everybody cannot be successful entrepreneurs because not everybody has what it takes. These candidates are assessed and evaluated (amongst others) whether they have a.

the right risk profile (can they live with risk daily)

b. tenacity and performance c.

can they cope with stress - Sound EQ

d. can they deal with customers e.

can they work independently with high work ethics

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If they qualify, they can enter an entrepreneurship programme; upon qualifying they enter an internship programme in a medium-size business. The whole programme should be sponsored with bursaries/allowances from government, and if candidates want to continue they should receive the start-up funding (in the form of a loan) for their own business. In doing so, hundreds (if not thousands) of smaller plumbing businesses, electricians, building and construction businesses can be created which in turn could create tens of thousands of other jobs. The specifics of how this programme could be implemented needs to be thoroughly worked out.

5.15.8. Better Talent Management Practices In the last Talent Management Survey conducted by Knowledge Resources and the SABPP in 2012, it became evident that talent management practices in most organisations can be improved drastically.577 Organisations in Africa, private and public, must adapt a professional approach to managing and developing the talent in their organisations. Professor Steve Bluen, in his ground-breaking book Talent Management in Emerging Markets (available at http://www.kr.co.za/books/talent-management-in-emerging-markets or http://www.amazon.com/ Talent-Management-Emerging-Markets-Steve-ebook/dp/B00H8RUEDQ), proposes the following talent management model which could be adopted by South African organisations (Figure 5.25): Business strategy

TALENT STRATEGY

Succession plan

Attract, select & onboard

Engage & retain

Develop

Manage performance

Reward & recognise

Talent value change Underpinning processes

Key role players

Diversity and localisation

Leaders

Organisational culture

Expatriates

Talent reviews and evaluation

Local employees

Talent system

Human Resources function

Business performance Source: Bluen, S. 2013.578

Figure 5.25: Talent Management Model

Below is an extract from the model. In some instances, it has been modified and adapted for organisations in Africa and South Africa specifically.

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A. Linking the Talent Strategy to the Business Strategy

The sole purpose of a talent strategy is to support the organisation in achieving its strategic objectives. Therefore, it needs to be derived from the corporate business plan and must be measured in terms of its contribution to the achievement of organisation goals. Several approaches to ensure businesstalent strategic alignment are proposed: 1. Link the talent strategy via delivering capability requirements

For a talent strategy to be relevant, it must be anchored in the capability requirements for delivering on the business strategy – currently and into the future. In addition, to be effective, the talent strategy must align to the culture and maturity of the business.

2. Link talent strategy via talent pools, especially for Multi-nationals

A useful way of linking the talent strategy to the business strategy is to identify a global talent pool (in the case of MNCs) comprising those jobs that are crucial. All incumbents occupying those jobs are included in the global talent pool, as are any other employees with rare and/ or critical skills. In this way, the talent team focuses on the health of the global talent pool and ensures that the business has the requisite talent to achieve its objectives.

3. Make talent management part of a total management system

Talent management can be enhanced by having a total management system that focuses on strengthening both the people and the work systems (technical, commercial and operating) to reflect an aligned and consistent working model.

4. Clarify talent management roles

Line management should “own” talent management. However, in many developing countries, management expertise in general is low. Human Resources should therefore ensure that line managers are suitably equipped to make serious talent decisions. It is also critical that HR should function at a professional level. Employees need to take ownership of their own career development and take the necessary steps, with the support of line management and HR, to realise their potential while delivering on performance.

5. Become a genuine employer of choice

There is no single “silver bullet” for success in talent management. Instead, if an organisation wants to be competitive in attracting, retaining and deploying high-calibre talent, it needs to create the right environment and adopt an aspirational total employment offering and employment value proposition that will be attractive to its target talent market.

6. Recruit for potential, not just to fill vacancies

To win the war for talent and cater for unpredictable talent demands, recruit for potential, rather than solely to fill vacancies. This is especially true for developing countries where education systems don’t necessarily deliver the quality of HR that is required.

7. Adopt a proactive diversity approach

An attraction criterion should be a quality of diverse talent, thereby casting the recruitment net as wide as possible rather than restricting it to particular groups. In emerging markets, women

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are a neglected supply of talent. To tap into this valuable source, ensure that there are no gender biases in talent practices. B. Employing and Managing Expatriates 8. Recruiting expatriates

Be specific about choosing the right people to undertake international assignments. Do not assume that a person who is successful in his or her home country will thrive in a host country, or vice versa. Emerging-market challenges are different from home-country challenges. Because each person is distinctive, one size does not fit all. Instead, customise talent decisions to cater for each person’s specific strengths, needs and family circumstances.

9. Select the family, not just the expatriate

When choosing an expatriate, the selection process should cover the expatriate candidate, his or her partner, and their accompanying children. The family will need to adapt to the host country and, therefore, they need to be screened.

10. Overcome resistance to accepting emerging-market assignments

Several measures have been used successfully to overcome employee resistance to accepting emerging-market assignments: •

Offer attractive and globally competitive expatriate packages.

•

Include successful completion of an emerging-market assignment as a promotion criterion.

•

Include global mobility as a criterion for membership of the global talent pool.

•

Ensure effective reintegration post assignment.

11. Agree in advance the terms and nature of the expatriate assignment

There are three main reasons for introducing an expatriate assignment: (a) to fill positions where suitable local talent is not available; (b) to develop leaders; and (c) to transfer knowledge. Decide which of these needs are being satisfied when creating an expatriate role. Thereafter, when sending expatriates on assignment, decide beforehand whether they are to be transferred to the host country permanently or if they will return to the home country post-assignment and take up another role.

12. Learn the host-country language

By learning the local language, expatriates enhance their ability to perform effectively and demonstrate goodwill. In South Africa the business language is English, and a sound working knowledge thereof is essential.

13. Introduce expatriate families to the country early

Before accepting the assignment, expatriates and their partners should be sent on a “look-see” visit to understand what the assignment entails. Then, before embarking on the assignment, expatriate families should attend an enculturation programme that covers several areas of acculturation needed for successful adjustment, including politics and government, work, economic matters, family relations, social relations, and ideology (ways of thinking, principles, values, customs and religious beliefs). This facilitates adjustment and allays the family’s fears.

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14. Implement two-way introductions to the MNC in host countries

Educate local employees about the ambitions, values, culture and ways of working of the global business. Where appropriate, send them on visits to the MNC headquarters so they can gain an appreciation of the larger group they have joined. Simultaneously, educate expatriates about local conditions, customs and practices.

Challenges in Employing Expatriates in Emerging Markets According to Prof Steve Bluen, in Talent Management in Emerging Markets, MNCs have addressed the talent gap by recruiting expatriates to fill senior roles in emerging countries (this scenario also applies in Africa). 579 This in turn, creates its own challenges. Factors such as political instability corruption, high crime rates, poor governmental or societal infrastructures, hostile commercial and labour laws, and “foreign” cultures, customs and practices reduce the attractiveness of emerging market (including Africa) countries as expatriate destinations. Also, expatriate cost to company is extremely high – estimated to be between three and four times a person’s home salary. Expatriate failure rates are also high (between 10 and 80%) and it is estimated that 27% of expatriates leave the company in the first year of returning home, and a further 25% leave the following year.

C. Managing Performance 15. Cultivate a good work ethic

South Africa has a relatively good work ethic according to The Africa Competiveness Report 2013.580 Companies can, therefore, harness the work ethic of their employees to improve performance.

16. Link performance management and talent management

A seamless approach to goal setting, goal reviews, identifying competence and performance gaps, individual development plans, and performance-related remuneration helps enhance career development and performance.

17. Link performance management and reward systems

Performance is the desired behaviour for which employees are compensated. Therefore, evaluation of employees’ job performance is vital for HR management and for the organisation. In an ever-changing business world, performance management serves as an effective tool for identifying, retaining and developing talent. In addition, reward and remuneration are closely allied to performance management and play a fundamental role in attracting and retaining talent.

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18. Keep performance management simple

A golden rule is to keep performance management (and the reward system) simple and easy to explain and understand. A performance management system must be realistic and measurable, and have attainable standards and objectives, as well as the necessary performance counselling and provision to allow employees to reach the desired level of performance.

19. Optimise performance appraisal information

The three comprehensive benefits of using performance appraisal information are the following: firstly, it assists in making HR decisions regarding matters such as salary increases, incentive payments, and promotion and demotion decisions; secondly, it helps to identify employee strengths and development areas; and, thirdly, it informs employee career planning, including further learning and development. No single performance appraisal method is suitable for all jobs and situations and, instead, a combination of methods is suggested.

20. Link performance management and development

By consistently focusing on the development of employees, performance management supports employees’ efforts to improve. Development is an extremely effective retention strategy – it can be more valuable than higher remuneration, because it keeps employees’ skills competitive. In addition, employees feel as though they are part of the team and believe that the organisation is investing in and caring for them, and this increases their commitment. Excellent resources in this regard are: •

Performance Management for Government, Universities, Schools and NGOs, by Dr. Mark Bussin (2013). This book is available from Knowledge Resources in e-book format at http://www.kr.co.za/books/performance-management-forgovernment-universities-schools-and-ngos

•

Performance Management Handbook for Emerging Markets, by Dr. Mark Bussin (2013). This book is available from Knowledge Resources in e-book format at http://www.kr.co.za/human-resources-personnel-management/ performance-management-handbook-for-emerging-markets

21. Eliminate prejudice

There is no place for prejudice in any organisation. Ensure that, in every host country, there are HR policies and employment equity strategies in line with local legislation that are followed in order to eradicate prejudice. To ensure sustainability, develop a compelling business case for employment equity in each host country.

22. Avoid stereotyping and exclusive behaviours

Leaders should be mindful of the detrimental effects of stereotypes and generalisations with regard to individual performance and motivation. They should also endeavour to control their expectancy communications and inculcate a positive learning culture. Be aware of exclusive behaviours, and implement mechanisms to overcome them. Be prepared to speak out, if appropriate, when observing exclusive behaviours and to suggest ways in which things can be done differently. Consult staff about their perceptions of inclusiveness and support, and encourage them to put forward practical solutions to overcome identified barriers.

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23. Maximise localisation

A major aim of staffing local operations is to reduce the number of expatriates and take a strategic decision to employ local people wherever possible. Adopt firm guidelines and targets around localisation and treat them with the same rigour as any other business deliverable. Employ expatriates sparingly – primarily to transfer skills and train local employees. A goal for expatriates should be to identify their successors and train them to take over their jobs within a clearly defined time period.

24. Grow local talent

To address the skills gap, leading MNCs embark on extensive learning and development initiatives to speed up time-to-competence of talented local employees who have the potential, but not necessarily the competencies, to occupy key positions.

Recommended Resources •

Talent Management in Emerging Markets, by Professor Steve Bluen (2012). Available from Knowledge Resources’ website in hard copy or e–book format at http://www.kr.co.za/books/talent– management–in–emerging–markets

•

Performance Management Handbook for Emerging Markets, by Dr Mark Bussin (2013). This book is available from Knowledge Resources in hard copy or e–book format at http://www.kr.co.za/human– resources–personnel–management/performance–management–handbook–for–emerging–markets

•

Performance Management for Government, Universities, Schools and NGOs, by Dr Mark Bussin (2013). This book is available from Knowledge Resources in hard copy or e–book format at http:// www.kr.co.za/books/performance–management–for–government–universities–schools–and–ngos

•

Workforce Planning Toolkit, by Lydia Cillie-Schmidt (2013). Available from Knowledge Resources in hard copy or e–book format at http://www.kr.co.za/books/workforce–planning–toolkit

•

Skills Planning for Improved Performance, by Suzanne Hattingh (2014). Available from Knowledge Resources in hard copy or e–book format at http://www.kr.co.za/knowres-publishing-1/skillsplanning-for-improved-performance

•

Integrated Assessment of Applied Competence, by Suzanne Hatting (2014). Available from Knowledge Resources in hard copy or e–book format at http://www.kr.co.za/knowres-publishing-1/integratedassessment-to-avoid-fragmented-assessment

•

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African Human Capital and Labour Report: SOUTH AFRICA

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Endnotes 1

Boston Consulting Group (BCG): Dupoux, P., Ermias, T., Heuzé, S., Niavas, S., Von Koschitzky Kimani, M. 2014. Winning in Africa: From Trading Posts to Ecosystems. [ONLINE]. Available at: https://www.bcgperspectives. com/content/articles/globalization_growth_winning_ africa_from_trading_posts_ecosystems/ [Accessed 22 May 2014] 2 O’Sullivan, J. 2013. Digging Deeper. The Economist. November 18. Page 77. Johannesburg: South Africa. Available at: http://www.economist.com/ news/21588896-some-worlds-fastest-growingeconomies-2014-will-be-africa-digging-deeper [Accessed 20 November 2013]. 3 BCG: Dupoux, P., Ermias, T., Heuzé, S., Niavas, S., Von Koschitzky Kimani, M. 2014. Winning in Africa: From Trading Posts to Ecosystems. 4 The Financial Times (FT): Blitz, R. & Blas, J.. 11 January 2014. ‘Hotel groups jostle for position in Africa: Economic growth is increasing demand for quality accommodation.’ P. 10. Print edition. Devarajan, S. & Fengler. W. 2013. ‘Africa’s Economic 5 Boom: Why the Pessimists and the Optimists Are Both Right’. Foreign Affairs. vol. 92, no. 3, pp 68–81. [ONLINE] Available at: http://www.foreignaffairs.com/ articles/139109/shantayanan-devarajan-and-wolfgangfengler/africas-economic-boom [Accessed 22 May 2014]. El–Erian, M. 2013. ‘Into Africa: Believe the Hype’, 6 africainvestor. vol. 11, no. 5, pp. 56–58. Soucat, M. & The African Development Bank (AfDB). 7 2013. Draft Approach Paper. AfDB’s Human Capital Development Strategy (2012–2016). One Billion Opportunities: Building Human Capital for Inclusive Growth in Africa. [ONLINE]. Available at: http://www. afdb.org/en/documents/ [Accessed 22 May 2014]. Devarajan, S. & Fengler. W. 2013. ‘Africa’s Economic 8 Boom: Why the Pessimists and the Optimists Are Both Right’. 9 Ibid. 10 Ibid. 11 Soucat, M. & AfDB. AfDB’s Human Capital Development Strategy (2012–2016). 12 El–Erian, M. 2013. ‘Into Africa: Believe the Hype’. 13 Keeley, B. 2007. Human Capital: How what you know shapes your life. Paris: OECD Publishing. [ONLINE]. Available at: http://images2.ehaus2.co.uk/oecd/pdfs/ free/0107101e.pdf [Accessed 19 November 2013]. Page 97. 14 Ibid. Page 34. 15 Ibid. 16 Pfeffermann, G. 2012. ‘Building management education capacity in Africa.’ This is Africa: A Global Perspective. October 18. [ONLINE]. Available at: http:// www.thisisafricaonline.com/Perspectives/Buildingmanagement-education-capacity-in-Africa [Accessed 22 May 2014]. 17 Ibid. 18 Devarajan, S. & Fengler. W. 2013. ‘Africa’s Economic Boom: Why the Pessimists and the Optimists Are Both Right’.

19

BCG: Dupoux, P., Ermias, T., Heuzé, S., Niavas, S., Von Koschitzky Kimani, M. 2014. Winning in Africa: From Trading Posts to Ecosystems. Page 6. 20 Ibid. Page 6. 21 Jerven, M. 2013. Poor Numbers: How We Are Misled by African Development Statistics and What To Do About It. New York: Cornell University Press. 22 Ibid. Page xi. 23 Ibid. Page 87. 24 Wikipedia. 2013. South Africa. [ONLINE]. Available at: https://en.wikipedia.org/wiki/South_africa [Accessed 03 March 2014]. 25 South Africa Info. 2014. [ONLINE]. Available at: http:// www.southafrica.info/about/history/521109.htm [Accessed 03 March 2014]. 26 South Africa Government. 2014. [ONLINE]. Available at: http://www.gov.za/ [Accessed 04 November 2013]. 27 World Bank. 2013. South Africa at a Glance. [ONLINE]. Available at: http://devdata.worldbank.org/AAG/zaf_ aag.pdf [Accessed 26 May 2014]. 28 UNESCO World Heritage Convention. 2014. South Africa. [ONLINE]. Accessed March 2014. Available at: http:// whc.unesco.org/en/statesparties/za/ 29 Ibid. 30 Culture Crossing, n.d. Africa and the Middle–East: South Africa. [ONLINE]. Available at: http://www. culturecrossing.net/basics_business_student. php?id=187 [Accessed 23 March 2014]. 31 Ibid. 32 Ibrahim Foundation. 2013. Ibrahim Index of African Governance. [ONLINE]. Available at: http://www. moibrahimfoundation.org/iiag/ [Accessed 20 March 2014]. 33 Ibid. 34 Ibid. 35 Ibid. 36 Ibid. 37 Transparency International. 2013. Corruption Perceptions Index. [ONLINE]. Available at: http://www. transparency.org/ [Accessed 20 March 2014]. 38 Ibid. 39 Ibid. 40 Transparency International. 2010. Corruption Perceptions Index 2010. [ONLINE]. Available at: http:// www.transparency.org/cpi2010/results [Accessed 20 March 2014]. 41 Transparency International. 2013. Corruption Perceptions Index 2013. [ONLINE]. Available at: http:// www.transparency.org/cpi2013/results [Accessed 20 March 2014]. 42 African Development Bank (AfDB). 2013. Republic of South Africa: Country Strategy Paper 2013–2017. [ONLINE]. Available at: http://www.afdb.org/ fileadmin/uploads/afdb/Documents/Project-andOperations/2013-2017_-_South_Africa_-_Country_ Strategy_Paper_01.pdf [Accessed 03 March 2014]. 43 Ibid. 44 PricewaterhouseCoopers (PwC). 2014. Corporate Governance – King III Report – Introduction and overview. [ONLINE]. Available at: http://www.pwc. co.za/en/king3/ [Accessed: 20 March 2014].

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45 Ibid. 46 Ibid. 47 International Monetary Fund (IMF). 2013. World Economic Outlook Databases 2013. [ONLINE]. Available at: http://www.imf.org/external/ns/cs.aspx?id=28 [Accessed 17 February 2014]. 48 Ibid. 49 World Bank. 2013. World Development Indicators, 2012. [ONLINE]. Available at: http://data.worldbank. org/ [Accessed 20 November 2014]. 50 IMF. 2013. World Economic Outlook Databases 2013. 51 World Bank. 2013. World Development Indicators, 2012. 52 IMF. 2013. World Economic Outlook Databases 2013. 53 World Bank. 2013. World Development Indicators, 2012. 54 IMF. 2013. World Economic Outlook Databases 2013. 55 South Africa.info. 2013. Economy – South Africa: Economy overview. [ONLINE]. Available at: http:// southafrica.info/business/economy/econoverview. htm#.UywNwfmSySo [Accessed 19 March 2014]. 56 Ibid. 57 World Bank. 2013. World Development Indicators, 2012. 58 IMF. 2013. World Economic Outlook Databases 2013. 59 IMF. 2013. World Economic Outlook Databases 2013. 60 World Bank. 2013. World Development Indicators, 2012. 61 IMF. 2013. World Economic Outlook Databases 2013. 62 World Bank. 2013. World Development Indicators, 2012. 63 IMF. 2013. World Economic Outlook Databases 2013. 64 Ibid. 65 Ibid. 66 World Bank. 2013. World Development Indicators, 2012. 67 IMF. 2013. World Economic Outlook Databases 2013. 68 World Bank. 2013. World Development Indicators, 2012. 69 IMF. 2013. World Economic Outlook Databases 2013. 70 Statistics South Africa. 2014. [ONLINE]. Available at: http://beta2.statssa.gov.za/ [Accessed 12 March 2014]. 71 IMF. 2013. World Economic Outlook Databases 2013. 72 World Bank. 2013. World Development Indicators, 2012. 73 Ibid. 74 IMF. 2013. World Economic Outlook Databases 2013. 75 World Bank. 2013. World Development Indicators, 2012. 76 IMF. 2013. World Economic Outlook Databases 2013. 77 AfDB. 2011. Republic of South Africa: Country Strategy Paper 2013–2017. 78 Ibid. 79 fxtop.com. 2014. Historical rates. [ONLINE]. Available at: http://fxtop.com/en/historical-exchange-rates. php?MA=1 [Accessed 04 June 2014]. 80 xe.com. 2014. [ONLINE]. Available at: http://www. xe.com/ [Accessed 14 May 2014]. 81 World Bank. 2014. Countries: South Africa Overview. [ONLINE]. Available at: http://www.worldbank.org/en/ country/southafrica/overview [Accessed 12 March 2014]. 82 National Planning Commission (NPC). 2011. National Development Plan: Vision for 2030. [ONLINE]. Available at: http://www.npconline.co.za/medialib/downloads/ home/NPC%20National%20Development%20Plan%20 Vision%202030%20-lo-res.pdf [Accessed 19 March 2014]. 83 Ibid. 84 World Economic Forum. 2013. The Global Competitiveness Report 2013–2014. [ONLINE]. Available at: http://www.weforum.org/ reports?filter[type]=Competitiveness [Accessed 19 March 2014].

85 Ibid. 86 Ibid. 87 Ibid. 88 World Economic Forum. 2013. The Global Competitiveness Report 2013–2014. 89 International Finance Corporation (IFC) & World Bank. 2013. Doing Business: Measuring Business Regulations. Economy Rankings: Sub-Saharan Africa. [ONLINE]. Available at: http://www.doingbusiness.org/rankings [Accessed 13 March 2014]. 90 Ibid. 91 World Economic Forum. 2013. The Africa Competitiveness Report 2013. 92 IFC & World Bank. 2013. Doing Business. 93 South African Department of Trade and Industry. 2014. B–BBEE: Economic Empowerment. [ONLINE]. Available at: http://www.dti.gov.za/economic_empowerment/ economic_empowerment.jsp [Accessed 06 March 2014]. 94 BEE.CO.ZA. 2014. [ONLINE]. Available at: http://bee. co.za/ [Accessed 06 March 2014]. 95 Ibid. 96 Ibid. 97 The Africa Report. February 2014. Top 500 Companies in Africa. P. 81–96. Paris. [ONLINE] Available at: http:// www.theafricareport.com/top-500-companies-inafrica-2013.html [Accessed 22 May 2014]. 98 The Organisation for Economic Co–Operation and Development (OECD): Better Policies for Better Lives. 2014. Aid at a Glance charts – Summary charts by aid (ODA) recipients: South Africa. 24 February 2014. [ONLINE]. Available at: http://www.oecd.org/dac/stats/ documentupload/ZAF.JPG [Accessed 12 March 2014]. 99 Sulaiman, T. 2014. ‘South Africa was continent’s top FDI recipient in 2013.’ REUTERS. January, 28. [ONLINE]. Available at: http://www.reuters.com/ article/2014/01/28/africa-fdi-idUSL5N0L23YF20140128 [Accessed 07 May 2014]. 100 Ibid. 101 IMF. 2013. IMF Country Report No 13/303. South Africa: 2013 Article IV Consultation. [ONLINE]. Available at: http://www.imf.org/external/pubs/ft/scr/2013/cr13303. pdf [Accessed 12 March 2014]. 102 Ibid. 103 NPC. 2011. National Development Plan: Vision for 2030. 104 IMF. 2013. IMF Country Report No 13/303. South Africa: 2013 Article IV Consultation. 105 Bisseker, C. 2014. ‘SA economy in a tight spot. Financial Mail. February, 27. P. 24-26. [ONLINE]. Available at: http://www.financialmail.co.za/coverstory/2014/02/27/ sa-economy-in-a-tight-spot [Accessed 05 March 2014]. 106 Ibid. 107 Airports Company of South Africa (ACSA). 2014. About ACSA: Company Profile. [ONLINE]. Available at: http:// www.acsa.co.za/home.asp?pid=53 [Accessed 12 March 2014]. 108 AfDB). 2013. Republic of South Africa: Country Strategy Paper 2013–2017. 109 World Bank. 2013. South Africa at a Glance. [ONLINE]. Available at: http://devdata.worldbank.org/AAG/zaf_ aag.pdf [Accessed 26 May 2014]. 110 World Bank. 2013. World Development Indicators, 2012. 111 South Africa Government. 2014. South Africa Government Online. [ONLINE]. Available at: http://www. gov.za/ [Accessed 17 March 2014].

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112 World Health Organization (WHO). 2013. Country health profile for South Africa, Nov 2013.[ONLINE]. Available at: http://www.who.int/countries/en/ [Accessed 14 March 2014]. 113 . World Bank. 2013. World Development Indicators, 2012. 114 Statistics South Africa. 2013. Home. [ONLINE]. Available at: http://beta2.statssa.gov.za/ [Accessed 27 March 2014]. 115 World Bank. 2013. World Development Indicators, 2012. 116 Statistics South Africa. 2014. P0302 – Mid– Year population estimates, 2013. [ONLINE]. Available at: http://beta2.statssa.gov.za/?page_ id=1854&PPN=P0302&SCH=5500 [Accessed 05 June 2014]. 117 Ibid. 118 South Africa Government. 2014. South Africa Government Online. 119 Ibid. 120 Ibid. 121 World Bank. 2013. World Development Indicators, 2012. 122 Ibid. 123 Ibid. 124 Ibid. 125 Ibid. 126 Ibid. 127 Statistics South Africa. 2013. P0302 - Mid-year population estimates, 2013. 128 World Bank. 2013. World Development Indicators, 2012. 129 Statistics South Africa. 2013. P0302 - Mid-year population estimates, 2013. 130 World Bank. 2013. World Development Indicators, 2012. 131 Statistics South Africa. 2013. P0302 - Mid-year population estimates, 2013. 132 World Bank. 2013. World Development Indicators, 2012. 133 Statistics South Africa. 2013. P0302 - Mid-year population estimates, 2013. 134 World Bank, 2013. World Development Indicators, 2012. 135 Statistics South Africa. 2013. P0302 - Mid-year population estimates, 2013. 136 Ibid. 137 Ibid. 138 Ibid. 139 Ibid. 140 Ibid. 141 Ibid. 142 Ibid. 143 World Bank. 2013. World Development Indicators, 2012. 144 Ibid. 145 Ibid. 146 Ibid. 147 Ibid. 148 Ibid. 149 Ibid. 150 Ibid. 151 Ibid. 152 Ibid. 153 Ibid. 154 Ibid. 155 Ibid. 156 NPC. 2011. National Development Plan: Vision for 2030. 157 Ibid.

158 Go, A.; Moyer, J.; Rafa, M.; Schünemann, J. 2013. ‘Population Futures: Revisiting South Africa’s National Development Plan 2030. Institute for Security Studies. African Futures Paper. October 2013. No. 7. [ONLINE]. Available at: http://www.issafrica.org/futures/ publications/papers/population-futures-revisiting-southafricas-national-development-plan-2030 [Accessed 05 June 2014]. 159 United Nations Development Programme (UNDP). 2013. Human Development Report 2013: The Rise of the South: Human Progress in a Diverse World. P.77, 79. [ONLINE]. Available at: http://hdr.undp.org/en/content/humandevelopment-report-2013 [Accessed 12 March 2014]. 160 Ibid. 161 Ibid. 162 Ibid. 163 Ibid. 164 Ibid. 165 Michigan State University (MSU) & Citizen Surveys – Afrobarometer. October 2013. Afrobarometer Summary of Results: Afrobarometer Round 5 Survey in South Africa. [ONLINE]. Available at: http://www. afrobarometer.org/results/results-by-country-n-z/ south-africa [Accessed 15 November 2013.]. 166 Ibid. 167 UNDP. 2013. Human Development Indicators and Thematic Tables: Statistical Tables from the 2013 Human Development Report. [ONLINE]. Available at: http://hdr. undp.org/en/data [Accessed 12 March 2014]. 168 Ibid. 169 Ibid. 170 Ibid. 171 Ibid. 172 Ibid. 173 Ibid. 174 Ibid. 175 World Bank. 2013. South Africa at a Glance. 176 Ibid. 177 South African Social Security Agency. 2014. [ONLINE]. Available at: www.sassa.gov.za/index.php/social-grants [Accessed 05 June 2014]. 178 Zibi, S. 2013. ‘Unemployment set to threaten SA’s welfare system.’ Financial Mail. December, 13. [ONLINE]. Available at: http://www.financialmail.co.za/ features/2013/12/12/unemployment-set-to-threatensa-s-welfare-system [Accessed 18 December 2014]. 179 World Bank. 2014. Countries: South Africa Overview. 180 Keely, B. 2007. Human Capital: What you know shapes your life. Paris: OECD Publishing. p. 97 181 World Bank. 2013. World Development Indicators, 2012. 182 World Bank. 2013. World Development Indicators, 2012. 183 Ibid. 184 World Health Organization. 2011. Noncommunicable Diseases: Country Profiles 2011. France: WHO. [ONLINE}. Available at: http://www.who.int/chp/ncd_global_status_ report/en/index.html. [Accessed 27 February 2014] 185 World Health Organization (WHO). 2011. South Africa. [ONLINE]. Available at: http://www.who.int/nmh/ countries/zaf_en.pdf?ua=1. [Accessed 13 March 2014] 186 International Association For Medical Assistance to Travellers. 2014. South Africa Travel Health Advice. [ONLINE]. Available at: http://www.iamat.org/country_ profile.cfm?id=90#profile_diseases. [Accessed 8 May 2014].

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187 World Health Organization on behalf of the Roll Back Malaria Partnership Secretariat. 2013. Progress and Impact Series: Country Reports: Focus on South Africa. No 8. [ONLINE]. Available at: http://www. rollbackmalaria.org/ProgressImpactSeries/docs/ report16-South-Africa.pdf. [Accessed: 8 May 2014]. 188 World Health Organization: Global Health Observatory Data Repository. 2014. Reported deaths. [ONLINE]. Available at: http://apps.who.int/gho/data/node.main. A1367?lang=en. [Accessed 8 May 2014]. 189 World Health Organization on behalf of the Roll Back Malaria Partnership Secretariat. 2013. Progress and Impact Series: Country Reports: Focus on South Africa. 190 World Health Organization: Global Health Observatory Data Repository. 2014. Reported deaths. [ONLINE]. Available at: http://apps.who.int/gho/data/node.main. A1367?lang=en. [Accessed 8 May 2014]. 191 UNAIDS. 2014. AIDSInfo: Epidemiological status: South Africa. [ONLINE]. Available at: http://www.unaids.org/ en/regionscountries/countries/southafrica/. [Accessed 27 March 2014]. 192 Ibid 193 Ibid 194 Ibid 195 World Bank. 2013. World Development Indicators 2012. 196 Ibid. 197 Ibid 198 Rays of Hope Ministries. 2014. Rays of Hope. [ONLINE]. Available at: http://raysofhope.co.za/. [Accessed 3 March 2014]. 199 Afrika Tikkun. 2014. Afrika Tikkun. [ONLINE]. Available at: http://afrikatikkun.org/what-we-do/#. Ux7wcPmSySo. [Accessed 3 March 2014]. 200 World Bank. 2014. Health Nutrition and Population Statistics. [ONLINE]. Available at: http://databank. worldbank.org/data/views/reports/tableview.aspx#. [Accessed 8 May 2014]. 201 UNAIDS. 2014. AIDSinfo: Epidemiological status: South Africa. [ONLINE]. Available at: http://www.unaids.org/ en/dataanalysis/datatools/aidsinfo/. [Accessed 8 May 2014]. 202 South Africa National Tuberculosis Association. 2013. TB Incidence and Prevalence. [ONLINE]. Available at: http://www.santa.org.za/santa-reasearch-on-tv.html. [Accessed: 9 May 2014]. 203 Statistics South Africa. 2013. Statistical release P0309.3. Mortality and causes of death in South Africa, 2010: Findings from death notification. Pretoria: Stats SA 204 World Bank. 2013. World Development Indicators 2012. 205 Ibid. 206 Ibid 207 Ibid. 208 World Economic Forum (WEF). 2013.The Africa Competitiveness Report 2013. Geneva: World Economic Forum, 2013. [ONLINE]. Available at: http://www3. weforum.org/docs/WEF_Africa_Competitiveness_ Report_2013.pdf. [Accessed 2 February 2014] 209 Ibid. 210 Health Professions Council of South Africa. 2013. Health Professions Council of South Africa. [ONLINE]. Available at: http://www.hpcsa.co.za/. [Accessed 19 November 2013].

211 Ibid 212 Ibid. 213 Ibid. 214 Ibid. 215 Ibid. 216 Fokazi, S. 2013. ‘We’re in dire need of specialists’. Cape Argus. October 30. [ONLINE]. Available at http://www. iol.co.za/news/south-africa/we-re-in-dire-need-ofspecialists-1.1599540#.U2yYFsuKDIU [Accessed 9 May 2014] 217 Ibid 218 HealthSites. 2014. [ONLINE]. Available at: http://www. healthsites.org.za/ [Accessed 02 February 2014]. 219 Ibid. 220 South African Government. 2014. About SA: Provinces. [ONLINE]. Available at: www.gov.za/aboutsa/provinces. htm [Accessed 24 March 2014]. 221 Department of Health. 2011. National Health in South Africa: Policy Paper. [ONLINE]. Available at: http://www.hst.org.za/sites/default/ files/2bcce61d2d1b8d972af41ab0e2c8a4ab.pdf. [Accessed 25 May 2014]. 222 Kardas-Nelson, M. 2013. ‘NHI a tonic for extreme inequality’. Mail & Guardian. August, 8. [ONLINE]. Available at: http://mg.co.za/article/2013-08-08-00-nhi-atonic-for-extreme-inequality. [Accessed: 20 May 2014]. 223 Ibid. 224 Sanlam. 2014. Foundation Project. [ONLINE]. Available at: http://www.sanlam.co.za/wps/wcm/ connect/Sanlam_EN/Sanlam/About+Sanlam/ HIV+Aids+and+Sanlam/Foundation+Project/. [Accessed: 9 May 2014]. 225 Massmart. 2014. Fact Sheets. [ONLINE]. Available at: http://mycsiplan.co.za/factsheets/. [Accessed 12 May 2014]. 226 Standard Bank. 2014. CSI in South Africa. [ONLINE]. Available at: http://sustainability.standardbank.com/ socioeconomic/investing-in-communities/csi-in-sa/. [Accessed 12 May 2014]. 227. Statistics South Africa, 2013. Population Census 2011. [ONLINE]. Available at: http://interactive. statssa.gov.za/superweb/loadDatabaseo;jsessionid= 1CD019B0829387536F0B7B7E2B1B7562? db=Education11_wd [Accessed 24 March 2014]. 228 Ibid. 229 Ibid. 230 Ibid. 231 Ibid. 232 Ibid. 233 Ibid. 234 World Bank. 2013. World Development Indicators 2012. 235 Ibid. 236 Ibid. 237 Ibid. 238 Ibid. 239 Ibid. 240 Ibid. 241 Statistics South Africa. 2013. Population Census 2011. 242 South African Department of Basic Education. 2013. Education Statistics in South Africa 2010 243 South African Department of Higher Education and Training. 2013. Statistics on Post-School Education and Training in South Africa, 2010.

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244 South African Department of Basic Education. 2011. School Realities 2011. Table 4. [ONLINE]. Available at: http://www.education.gov.za/DocumentsLibrary/ Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 245 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010. Table 5. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 246 South African Department of Basic Education. 2012. School Realities 2012. Table 4. [ONLINE]. Available at: http://www.education.gov.za/DocumentsLibrary/ Publications/tabid/93/Default.aspx [Accessed 15 May 2014]; South African Department of Basic Education. 2013. School Realities 2013. Table 4. [ONLINE]. Available at: http://www.education.gov.za/DocumentsLibrary/ Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 247 World Bank. 2013. World Development Indicators, 2012. 248 Ibid. 249 Ibid. 250 Ibid. 251 Ibid. 252 World Bank, 2013. World Development Indicators, 2012. 253 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010. 254 South African Department of Basic Education. March 2013. Education Statistics in South Africa 2011. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]; South African Department of Basic Education. September 2013. School Realities 2013. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 255 South African Department of Basic Education. January 2014. Education Statistics in South Africa 2012. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 256 World Bank, 2013. World Development Indicators, 2012. 257 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010. 258 South African Department of Basic Education. March 2013. Education Statistics in South Africa 2011. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]; South African Department of Basic Education. September 2013. School Realities 2013. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 259 South African Department of Basic Education. January 2014. Education Statistics in South Africa 2012. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 260 South African Department of Basic Education. 2013. School Realities 2013. 261 World Bank, 2013. World Development Indicators, 2012. 262 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010.

263 South African Department of Basic Education. March 2013. Education Statistics in South Africa 2011. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]; South African Department of Basic Education. September 2013. School Realities 2013. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 264 South African Department of Basic Education. January 2014. Education Statistics in South Africa 2012. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 265 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010. 266 Kenya National Bureau of Statistics. 2012. Primary school enrolment by provinces and districts, 2006–2011. [ONLINE]. Available at: http://www.knbs.or.ke/index.php?option=com_ phocadownload&view=category&id=26&Itemid=517 [Accessed 15 May 2014]. 267 World Bank. 2013. World Development Indicators, 2012. 268 Kenya National Bureau of Statistics. 2012. Primary school enrolment by provinces and districts, 2006–2011. 269 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010. 270 World Bank. 2013. World Development Indicators, 2012. 271 South African Department of Basic Education. 2013. School Realities 2013; World Bank, 2013. World Development Indicators, 2012. 272 World Bank, 2013. World Development Indicators, 2012. 273 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010. 274 South African Department of Basic Education. March 2013. Education Statistics in South Africa 2011. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]; South African Department of Basic Education. September 2013. School Realities 2013. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 275 South African Department of Basic Education. January 2014. Education Statistics in South Africa 2012. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 276 (2013) 277 World Bank, 2013. World Development Indicators, 2012. 278 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010. 279 South African Department of Basic Education. March 2013. Education Statistics in South Africa 2011. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]; South African Department of Basic Education. September 2013. School Realities 2013. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014].

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280 South African Department of Basic Education. January 2014. Education Statistics in South Africa 2012. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 281 World Bank, 2013. World Development Indicators, 2012. 282 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010. 283 South African Department of Basic Education. March 2013. Education Statistics in South Africa 2011. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]; South African Department of Basic Education. September 2013. School Realities 2013. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 284 South African Department of Basic Education. January 2014. Education Statistics in South Africa 2012. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 285 (2013) 286 World Bank, 2013. World Development Indicators, 2012. 287 South African Department of Basic Education. February 2012. Education Statistics in South Africa 2010. 288 South African Department of Basic Education. March 2013. Education Statistics in South Africa 2011. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]; South African Department of Basic Education. September 2013. School Realities 2013. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 289 South African Department of Basic Education. January 2014. Education Statistics in South Africa 2012. [ONLINE]. Available at: http://www.education.gov.za/ DocumentsLibrary/Publications/tabid/93/Default.aspx [Accessed 15 May 2014]. 290 World Economic Forum. 2013. The Africa Competitiveness Report 2013. 291 Ibid. 292 World Bank. 2013. World Development Indicators, 2012. 293 Ibid. 294 South African Department of Basic Education. 2013. School Realities 2013. 295 World Bank. 2013. World Development Indicators, 2012. 296 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010; South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2013. Education Statistics in South Africa 2012; South African Department of Basic Education. 2013. School Realities 2013. 297 World Bank. 2013. World Development Indicators, 2012. 298 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010; South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2013. Education Statistics in South Africa 2012; South African Department of Basic Education. 2013. School Realities 2013.

299 World Bank. 2013. World Development Indicators, 2012. 300 South African Department of Basic Education. 2013. Education Statistics in South Africa 2012. 301 World Bank. 2013. World Development Indicators, 2012. 302 South African Department of Basic Education. 2013. Education Statistics in South Africa 2012. 303 World Bank. 2013. World Development Indicators, 2012. 304 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010; South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2013. Education Statistics in South Africa 2012; South African Department of Basic Education. 2013. School Realities 2013. 305 World Bank. 2013. World Development Indicators, 2012. 306 South African Department of Basic Education. 2013. School Realities 2013. 307 World Bank. 2013. World Development Indicators, 2012. 308 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010; South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2013. Education Statistics in South Africa 2012; South African Department of Basic Education. 2013. School Realities 2013. 309 World Bank. 2013. World Development Indicators, 2012. 310 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010; South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2013. Education Statistics in South Africa 2012; South African Department of Basic Education. 2013. School Realities 2013. 311 World Bank. 2013. World Development Indicators, 2012. 312 South African Department of Basic Education. 2013. Education Statistics in South Africa 2011. 313 World Bank. 2013. World Development Indicators, 2012. 314 South African Department of Basic Education. 2013. Education Statistics in South Africa 2012. 315 World Bank. 2013. World Development Indicators, 2012. 316 Ibid. 317 World Bank. 2013. World Development Indicators, 2012. 318 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010; South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2013. Education Statistics in South Africa 2012. 319 World Bank. 2013. World Development Indicators, 2012. 320 South African Department of Basic Education. 2010. Education Statistics in South Africa. 2009; South African Department of Basic Education. 2012. Education Statistics in South Africa 2010; South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2013. Education Statistics in South Africa 2012. 321 World Bank. 2013. World Development Indicators, 2012. 322 South African Department of Basic Education. 2013. Education Statistics in South Africa 2012.

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323 World Bank. 2013. World Development Indicators, 2012. 324 World Bank. 2013. World Development Indicators, 2012. 325 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010; South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2013. Education Statistics in South Africa 2012. 326 South African Department of Basic Education. 2012. Education Statistics in South Africa 2010. 327 South African Department of Basic Education. 2013. Education Statistics in South Africa 2012. 328 South African Department of Basic Education. 2014. 2013 National Senior Certificate Examination: Technical Report. 329 South African Institute of Race Relations. 2012. South Africa Survey 2012. Johannesburg, South Africa. 330 South African Department of Basic Education. 2013. Education Statistics in South Africa 2011; South African Department of Basic Education. 2014. 2013 National Senior Certificate Examination: Technical Report. 331 South African Department of Higher Education and Training (DHET). 2013. Statistics on Post–School Education and Training in South Africa: 2011. [ONLINE]. Available at: http://www.dhet.gov.za/ [Accessed 18 November 2013]. 332 South African Department of Higher Education. 2013. Statistics on Post–School Education and Training in South Africa: 2010 [ONLINE]. Available at: http://www. dhet.gov.za/ [Accessed 15 May 2014]; DHET. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 333 South African Department of Higher Education. 2014. Statistics on Post–School Education and Training in South Africa: 2012. [ONLINE]. Available at: http://www. dhet.gov.za/ [Accessed 18 June 2014]. 334 South African Department of Higher Education. 2013. Statistics on Post–School Education and Training in South Africa: 2010 [ONLINE]. Available at: http://www. dhet.gov.za/ [Accessed 15 May 2014]; DHET. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 335 South African Department of Higher Education. 2014. Statistics on Post–School Education and Training in South Africa: 2012. 336 Quacquarelli Symonds (QS). 2013. World University Rankings 2013. [ONLINE]. Available at: http://www. topuniversities.com/qs–world–university–rankings [Accessed 11 March 2014]. 337 Times Higher Education (THE). 2013. World University Rankings 2012–2013. [ONLINE]. Available at: http:// www.timeshighereducation.co.uk/world–university– rankings/2012–13/world–ranking/region/africa [Accessed 11 March 2014]. 338 QS. 2013. World University Rankings 2013. 339 THE. 2013. World University Rankings 2012–2013. 340 Ranking Web of Universities. 2013. Ranking Web of Universities < Africa < South Africa. [ONLINE]. Available at: http://www.webometrics.info/en/Africa/South%20 Africa [Accessed 21 March 2014]. 341 Ibid. 342 South African Department of Higher Education. 2014. Statistics on Post–School Education and Training in South Africa: 2012.

343 Centre for Higher Education and Transformation (CHET). 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. [ONLINE]. Available at: http:// chet.org.za/data/sahe–open–data#keydata [Accessed 15 January 2014]. 344 South African Department of Higher Education. 2014. Statistics on Post–School Education and Training in South Africa: 2012. 345 South African Department of Higher Education. 2014. Statistics on Post–School Education and Training in South Africa: 2012. 346 Centre for Higher Education and Transformation. 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. 347 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 348 Centre for Higher Education and Transformation. 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. 349 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 350 Centre for Higher Education and Transformation. 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. 351 South African Department of Higher Education. 2014. Statistics on Post–School Education and Training in South Africa: 2012. 352 Ibid. 353 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 354 Centre for Higher Education and Transformation (CHET). 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. 355 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 356 Centre for Higher Education and Transformation (CHET). 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. 357 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 358 Centre for Higher Education and Transformation (CHET). 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. 359 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 360 Centre for Higher Education and Transformation (CHET). 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. 361 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 362 Centre for Higher Education and Transformation (CHET). 2013. South Africa Higher Education: DATA SA HE Indicators 2000 to 2010. 363 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2011.

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364 South African Department of Higher Education & Training. 2014. Statistics on Post–School Education and Training in South Africa: 2012. 365 South African Department of Higher Education & Training. 2014. Technical Vocational Education and Training. [ONLINE]. Available at: http://www.dhet.gov. za/SitePages/Org_TVET_.aspx. [Accessed 19 June 2014]. 366 South African Department of Higher Education & Training. 2013. Statistics on Post–School Education and Training in South Africa: 2010. 367 South African Department of Higher Education. 2014. Statistics on Post–School Education and Training in South Africa: 2012. 368 South African Department of Higher Education. 2013. Statistics on Post–School Education and Training in South Africa: 2010. 369 South African Department of Higher Education. 2014. Statistics on Post–School Education and Training in South Africa: 2012. 370 Ibid. 371 Ibid. 372 World Economic Forum. 2013. The Africa Competitiveness Report 2013. 373 Centre for Development & Enterprise (CDE). 2013. Mathematics Outcomes in South African Schools: What Are the Facts? What Should be Done? 374 Ibid. 375 World Economic Forum. 2013. The Africa Competitiveness Report 2013. 376 Ibid. 377 Castelló-Climent, A. & Doménech, R. BBVA Research. 2012. Human Capital and Income Inequality: Some Facts and Some Puzzles. P.28. [ONLINE]. Available at: http:// iei.uv.es/docs/publicaciones/pdf/iei_1201.pdf [Accessed 25 March 2014]. 378 Ibid. 379 Ibid. 380 Ibid. 381 Ibid. 382 Ibid. 383 World Economic Forum. 2013. The Africa Competitiveness Report 2013. 384 Ibid. 385 Ibid. 386 International Labour Organization (ILO), 2013. Countries and Economies. [ONLINE]. Available at: http://www.ilo.org/ilostat/faces/home/statisticaldata/ data_by_country?_adf.ctrl-state=vbq14oeqe_4&_ afrLoop=1822157428455224 [Accessed 22 November 2013]. 387 Statistics South Africa. 2014. Quarterly Labour Force Statistics First Quarter 2014. [ONLINE]. Available at: http://beta2.statssa.gov.za/?page_ id=1854&PPN=P0211&SCH=5828 [Accessed 30 May 2014]. 388 Ibid. 389 Ibid. 390 Ibid. 391 Ibid. 392 Ibid. 393 Ibid. 394 Ibid.

395 Ibid. 396 Ibid. 397 Ibid. 398 Statistics South Africa. 2014. Quarterly Labour Force Statistics First Quarter 2014. 399 Ibid. 400 Ghana Statistical Services. 2010. Employment sector of employed persons 15-64 years by region and district, 2010. [ONLINE]. Available at: http://www.statsghana. gov.gh/labour_stats.html [Accessed 27 September 2013]. 401 The United Republic of Tanzania National Bureau of Statistics. 2013. Employment and Earnings Survey 2012. [ONLINE]. Available at: http://www.nbs.go.tz/ [Accessed 25 October 2014]. 402 Ibid. 403 Open Data for Africa. 2014. AfDB’s Socio Economic Database, January 2014. [ONLINE]. Available at: http:// opendataforafrica.org/ [Accessed 12 March 2014]. 404 Statistics South Africa. 2014. Quarterly Labour Force Statistics First Quarter 2014. 405 Ibid. 406 Ibid. 407 Ibid. 408 Ibid. 409 Ibid. 410 Bhorat, H.; Goga, S.; Stanwix, B. & Labour Market Intelligence Partnership (LMIP). 2013. Occupational Shifts and Shortages: Skills Challenges Facing the South African Economy. [ONLINE]. Available at: www.lmip.org. za [Accessed 28 May 2014]. 411 Ibid. 412 Ibid. 413 Ibid. 414 Statistics South Africa. 2014. Quarterly Labour Force Survey First Quarter 2014. 415 Ibid. 416 Ibid. 417 Ibid. 418 Ibid. 419 Ibid. 420 Ibid. 421 Ibid. 422 Statistics South Africa. 2014. Quarterly Labour Force Statistics First Quarter 2014. 423 Ibid. 424 Ibid. 425 Ibid. 426 Statistics South Africa. 2014. Quarterly Labour Force Statistics First Quarter 2014. 427 Ibid. 428 Taborda, J. 2014. ‘South Africa Unemployment Rate Falls in Q4 2013.’ Trading Economics. February, 11. [ONLINE]. Available at: http://www.tradingeconomics.com/ articles/02112014095001.htm [Accessed 06 June 2014]. 429 Statistics South Africa. 2014. Quarterly Labour Force Statistics First Quarter 2014. 430 Ibid. 431 Ibid. 432 Ibid. 433 Ibid. 434 Ibid. 435 Ibid.

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436 Statistics South Africa. 2014. National and provincial labour market: Youth. [ONLINE]. Available at: http://www.google.co.za/ url?sa= t&rct=j&q=&esrc=s&source=web&cd=1&ved= 0CBoQFjAA&url=http%3A%2F%2Fbeta2.statssa.gov. za%2Fpublications%2FP02114.2%2FP02114.22014.pd f&ei=duKiU7afIsfK0QXAkoGgBQ&usg=AFQjCNHHynRqetiZlOo-ryv9rBWCtLQHw&bvm=bv.69411363,d.d2k. [Accessed 6 June 2014]. 437 Ibid. 438 Ibid. 439 Ibid. 440 Bhorat, H.; Goga, S.; Stanwix, B. & LMIP. 2013. Occupational Shifts and Shortages. 441 Ibid, Page 1. 442 Ibid. 443 Ibid. 444 Ibid. 445 Ibid. 446 Statistics South Africa. 2014. Quarterly Labour Force Survey First Quarter 2014. 447 Ibid. 448 Ibid. 449 Ibid. 450 Ibid. 451 Ibid. 452 Ibid. 453 Ibid. 454 Altbeker, A.; Storme, E. & The Centre for Development and Enterprise (CDE). 2013. Graduate Unemployment in South Africa: A Much Exaggerated Problem. Pages 1, 3, 6, 12, 13, 16. [ONLINE]. Available at: www.cde.org.za [Accessed 28 May 2014]. 455 Ibid. 456 Ibid. 457 Ibid. 458 Ibid. 459 Centre for Development and Enterprise (CDE). 2012. Coping with Unemployment: Young people’s strategies and their policy implications – Executive Summary. Pages 1–2. [ONLINE]. Available at: http://cde.org.za/ publications/jobs-growth/83-jobs-and-growth/110coping-with-unemployment-young-people-s-strategiesand-their-policy-implications [Accessed 20 May 2014]. 460 Ibid. 461 Ibid. 462 Ibid. 463 Ibid. 464 The Jobs Fund. 2014. Welcome to the Jobs Fund. [ONLINE]. Available at: http://www.jobsfund.org.za. [Accessed 5 June 2014]. 465 Ibid. 466 Ibid. 467 The Jobs Fund. 2014. Funded Projects. [ONLINE]. Available at: http://www.jobsfund.org.za/projects/ Harambee.aspx. [Accessed 5 June 2014]. 468 Department of Public Works. 2014. Welcome to EPWP. [ONLINE]. Available at: http://www.epwp.gov.za. [Accessed 13 June 2014]. 469 Ibid. 470 Ibid. 471 Department of Public Works. 2014. Media Statement. [ONLINE]. Available at: http://www.epwp.gov.za. [Accessed 13 June 2014].

472 Makholwa, A. 2014. ‘Skills and the Youth: Employment plans mainly for the short term.’ Financial Mail. February, 28. Page 26. 473 Department of Labour. 2014. Basic Guide to Affirmative Action. [ONLINE]. Available at: http://www.labour.gov. za/DOL/legislation/acts/basic-guides/basic-guide-toaffirmative-action. [Accessed 5 June 2014]. 474 Ibid. 475 Ibid. 476 Department of Labour. 2014. 14th Commission for Employment Equity Annual Report. [ONLINE]. Available at: http://www.google.co.za/ url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved= 0CBoQFjAA&url=http%3A%2F%2Fwww.gov. za%2Fdocuments%2Fdownload.php%3Ff%3D213162& ei=1yepU5q3MefR7Ab044HYDw&usg=AFQjCNHdBl55V kEuTlcA4Z08U4KxR-XnCw&bvm=bv.69620078,d.ZWU. [Accessed 5 June 2014]. 477 Ibid. 478 Ibid. 479 Ibid. 480 Ibid. 481 Ibid. 482 Ibid. 483 Ibid. 484 Human Sciences Research Council. 2012. Minister launches Labour Market Intelligence project. [ONLINE]. Available at: http://www.hsrc.ac.za/en/media-briefs/ education-and-skills-development/Minister-launchesLabour-Market-Intelligence-project#sthash.G8kFIfJi. dpuf. [Accessed 2 June 2014]. 485 Ibid. 486 Labour Market Intelligence Partnership. 2014. About LMIP. [ONLINE]. Available at: http://www.lmip.org.za/ page/about-lmip. [Accessed: 29 May 2014]. 487 Ibid. 488 Ibid. 489 DHET. 2014. Government Gazette. Notice 380 of 2014: Department of Higher Education and Training – Call for Comments on the National Scarce Skills List: Top 100 Occupations in Demand. 490 ‘Infrastructure plan to lure SA’s skilled’. 2012. fin24. February, 12. [ONLINE]. Available at: http://www. fin24.com/Economy/Infrastructure-plan-to-lure-SAsskilled-20120215. [Accessed 1 June 2014]. 491 ‘Engineers aim to woo more students’. 2011. fin24. March, 16. [ONLINE]. Available at: http://www. fin24.com/Economy/Infrastructure-plan-to-lure-SAsskilled-20120215. [Accessed 1 June 2014]. 492 Nellie Brand-Jonker. 2011. ‘Engineers aim to woo more students’. 2011. fin24. August, 28. [ONLINE]. Available at: http://www.fin24.com/Economy/Doctors-still-incritical-shortage-20110828. [Accessed 1 June 2014]. 493 Department of Basic Education. 2009. Human Resource Development Strategy for South Africa (HRD‐SA) 2010 – 2030. [ONLINE]. Available at: http://www.google.co.za/ url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved= 0CBoQFjAA&url=http%3A%2F%2Fwww.gov. za%2Fdocuments%2Fdownload.php%3Ff%3D117580 &ei=PmihU5SPHtKb1AXE14DgCQ&usg=AFQjCNGXfP3j3uvc4l3IaX0IYOth1DDaA. [Accessed 1 June 2014]. Page 5. 494 Department of Basic Education. 2009. Human Resource Development Strategy for South Africa (HRD‐SA) 2010 – 2030.

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495 South African Institute of Race Relations. 2012. South Africa Survey 2012. 496 Quality Council for Trades and Occupations. 2014. Home page. [ONLINE]. Available at: http://www.qcto.org.za/. [Accessed: 17 June 2014]. 497 Ibid. 498 DHET. 2013. Statistics on Post–School Education and Training in South Africa: 2011. 499 Ibid. 500 Ibid. 501 Ibid. 502 Ibid. 503 Government Gazette. 2014. Part 1 of 2. Vol 587, No 37679, May 22. [ONLINE]. Available at: www.gpwonline. co.za. [Accessed: 20 June 2014]. 504 Greef. R. 2011. ‘South African diaspora: brain drain or gain?’ DailyNews. November, 29. [ONLINE]. Available at: http://www.iol.co.za/dailynews/opinion/south-africandiaspora-brain-drain-or-gain-1.1188641 [Accessed 27 May 2014]. 505 Bisseker, C. 2014. ‘Skills Shortage: Trickling away.’ Financial Mail. April 25. Page 24. 506 Ibid. 507 South African Network of Skills Abroad (SANSA). 2014. Home: General Information. [ONLINE]. Available at: http://web.uct.ac.za/org/sansa/general.htm [Accessed 11 June 2014]. 508 Brown, M.; Kaplan, D., Meyer, J–B. & SANSA. n.d. A promising linkage with the diaspora. [ONLINE]. Available at: http://www.uct.ac.za/org/sansa [Accessed 11 June 2014]. 509 Ibid. 510 Ibid. 511 Kaplan, D.; Meyer, J–B. & SANSA. n.d. Mobilising our Diaspora: The South African Network of Skills Abroad. [ONLINE]. Available at: http://www.uct.ac.za/org/sansa [Accessed 30 May 2014]. 512 International Organization for Migration (IOM). 2014. World Migration. [ONLINE]. Available at: http://www. iom.int/cms/en/sites/iom/home/about-migration/ world-migration.html [Accessed 06 March 2014]. 513 Ibid. 514 Ibid. 515 South African Reserve Bank. 2014. Quarterly Bulletin, March 2014: No. 271. [ONLINE]. Available at: https:// www.resbank.co.za/Lists/News%20and%20Publications/ Attachments/6140/01Full%20Quarterly%20Bulletin%20 %E2%80%93%20March%202014.pdf. [Accessed 15 June 2014]. 516 Ensor, L. 2014. ‘State warned on public sector wage bill’. Business Day. June, 3. Washington: World Bank 517 21st Century Pay Solutions Group. 2014. The South African Increase Report. April. Johannesburg: 21st Century Pay Solutions Group. 518 Southern African Legal Information Institute. 2014. South Africa: Consolidated Acts. [ONLINE]. Available at: http://www.saflii.org/za/legis/consol_act/ cotrosa1996423/. [Accessed 25 May 2014]. 519 Ibid. 520 Commission for Conciliation, Mediation and Arbitration (CCMA). 2014. Welcome to CCMA. [ONLINE]. Available at: http://www.ccma.org.za/HomeDisplay.asp?L1=43. [Accessed 23 June 2014].

521 Statistics South Africa. 2014. Quarterly Labour Force Survey First Quarter 2014. 522 Ibid. 523 Ibid. 524 Ibid. 525 Ibid. 526 Ibid. 527 Ibid. 528 Ibid. 529 Ibid. 530 Ibid. 531 Ibid. 532 National Economic Development and Labour Council. 2014. The Workings of Nedlac. [ONLINE]. Available at: http://www.nedlac.org.za/. [Accessed: 5 June 2014]. 533 Statistics South Africa. 2014. Quarterly Labour Force Survey First Quarter 2014. 534 Ibid. 535 Ibid. 536 Ibid. 537 Ibid. 538 Fin24. 2014. ‘Post office strike ends, staff back at work’. Fin24. February, 12. [ONLINE]. Available at: http:// www.fin24.com/Companies/ICT/Post-office-strike-endsstaff-back-at-work-20140212. [Accessed 13 June 2014]. 539 Mkhize, N. 2014. ‘Tongaat workers continue with strike despite settlement’. Business Day. June, 9. [ONLINE]. Available: http://www.bdlive.co.za/national/ labour/2014/06/09/tongaat-workers-continue-withstrike-despite-settlement. [Accessed: 13 June 2014]. 540 Shabalala, Z. 2014. ‘Miners beg union to end South Africa’s longest strike’. Reuters. June, 12. [ONLINE]. Available at: http://af.reuters.com/ article/topNews/idAFKBN0EN18D20140612? pageNumber=2&virtualBrandChannel=0&sp=true. [Accessed 13 June 2014]. 541 Khumalo, T. 2014. ‘No end in sight to strike wave in South Africa’. Deutsche Welle. June,5. [ONLINE]. Available at: http://www.dw.de/no-end-in-sight-tostrike-wave-in-south-africa/a-17687827. [Accessed: 13 June 2014]. 542 Wilson, F. 2014. ‘Remedy to miners’ poverty lies in ending migrant labour’. Business Day. June, 10. Page 7. 543 Ibid. 544 Molopyane, M. 2014. ‘Mining crisis will return if root causes not addressed’. Business Day. June, 19. Page 9. 545 Ibid. 546 Ibid. 547 Hartford, G. 2014. ‘Everything has changed but nothing has been solved’. Business Day. June, 18. Page 7. 548 Molapo, S., Mutedi, A. and Semono, M. 2012. Annual Industrial Action Report: 2012. Pretoria: Department of Labour. 549 Ibid. 550 Ibid. 551 Ibid. 552 Ibid. 553 Ibid. 554 Ibid. 555 Ibid. 556 Ibid. 557 Ibid. 558 Ibid. 559 Ibid.

African Human Capital and Labour Report: SOUTH AFRICA

560 Ibid. 561 Ibid. 562 World Economic Forum (WEF). 2013.The Africa Competitiveness Report 2013. 563 Ibid. 564 CDE. 2013. Executive Summary: Rethinking South Africa’s Labour Market. Lessons from Brazil, India and Malaysia. [ONLINE]. Available at: www.cde.org.za [Accessed 15 May 2014]. 565 Ibid. 566 Pickworth, E. 2014. ‘Labour laws among world’s best – report’. Business Day. June, 11. Page 2. 567 Delonno, P., Faku, D. and Buthelezi, L. 2014. ‘Ramatlhodi bemoans absence of strike-ending mechanism’. Business Day. June, 11. Page 16. 568 Naicker, K. 2014. SA labour productivity at its lowest in 46 years. [ONLINE]. Available at: http://www.unisa. ac.za/news/index.php/2014/01/sa-labour-productivityat-its-lowest-in-46-years/. [Accessed 13 June 2014]. 569 Ibid. 570 SABPP. 2012. HR Competency Model. [ONLINE]. Available at: http://www.sabpp.co.za/about/ourprojects/hr-competency-model/. [Accessed 29 May 2014]. 571 Bhorat, H. & Development Policy Research Unit (DPRU). 2012. DPRU Working Paper 12/150. A Nation in Search of Jobs: Six Possible Policy Suggestions for Employment Creation in South Africa. Pages 4, 7, 8, 9, 11 & 12. [ONLINE]. Available at: www.dpru.uct.ac.za [Accessed 15 May 2014]. 572 Ibid. 573 Ibid, Page 9. 574 Ibid. 575 Ibid. 576 Centre for Development and Enterprise (CDE). 2012. Coping with Unemployment: Young people’s strategies and their policy implications – Executive Summary. 577 Knowledge Resources. 2013. Talent Management Survey Report of 2012/2013. Johannesburg: Knowledge Resources. 578 Bluen, S. 2013. Talent Management in Emerging Markets. Johannesburg: Knowres Publishing 579 Ibid. p. 371 580 World Economic Forum (WEF). 2013.The Africa Competitiveness Report 2013.

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The African Human Capital and Labour Reports will give you a better understanding and knowledge of the context of human capital and labour in terms of: Employment levels and trends, education and skills development, standards of living, health care, industrial relations, economic indicators, inter-cultural challenges, labour market efficiency and more. Where appropriate the various indicators were benchmarked against South Africa and Nigeria to provide a better perspective and context.

African Human Capital and Labour Report

African Human Capital and Labour Report Series

African Human Capital and Labour Report SOUTH AFRICA

These reports will: Assist you in your future HR planning

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Give you a better grasp of the external influences on the workforce in each country

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Empower you to improve your talent management programmes

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Give you a better understanding of wage and salary levels within each country

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Help you to better manage and ulitise your expatriates

SOUTH AFRICA

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ISBN: 978-1-86922-498-1 Economic Indicators Health Care

Socio Economic Indicators

Labour Relations

Employment Trends

Education and Skills Development Expatriates

Living Standards