Vavi: SA trapped in apartheid economy

Cape Town - South Africa's economic structure still reflects colonialism and apartheid, Congress of SA Trade Unions general secretary Zwelinzima Vavi said on Friday.

"The main reason why we have failed to create employment, and on the contrary have been losing jobs, is that we have remained trapped in an economic structure which we inherited from the days of colonialism and apartheid," he told an informal economy conference in Cape Town.

"Like so many other former colonies, we have been over-dependent on the export of raw materials; in South Africa's case it's gold, platinum, coal and diamonds."

This was why Cosatu had been campaigning so strongly for a new developmental growth path to take the country out of the economy inherited from colonialism and apartheid and build one based on manufacturing and the development of a skilled, well-paid labour force.

"That is the only way we can hope to achieve the government's ambitious target of creating five million new jobs by 2020, a target which we have to reach if we are to tackle all the problems which are rooted in our levels of unemployment," Vavi said.

The relentless rise of unemployment, the growth of the informal economy, and the rapid casualisation of labour were the biggest problems facing the international labour movement.

International Labour Organisation (ILO) statistics showed that in Africa, somewhere between 60% and 90% of the active population was now employed in the informal economy.

In sub-Saharan Africa, if South Africa was excluded, the share of informal employment in non-agricultural employment was 78%.

Most informal workers were women and young people who had no other choice than the informal economy for their survival and livelihood.

Workers in the informal economy generally had no contracts, no fixed hours, and no employment benefits such as sick pay or maternity leave.

Most were deprived of security and access to trade union membership.

"There is a tiny minority of enterprising informal workers who can climb the first few steps to prosperity, some of them going on to become successful entrepreneurs," Vavi said.

But for the vast majority, the informal sector meant grinding poverty.

There was a clear correlation between working informally and being poor, Vavi said.

Where informality was on the rise, the numbers of working poor were increasing or remained the same, while conversely in countries where informality was declining, the numbers of working poor were also down.

Although their individual incomes were low, cumulatively these informal workers contributed significantly to gross domestic product (GDP).

Vavi said the ILO had estimated that in 16 sub-Saharan countries the informal sector on average contributed 41% to GDP, ranging from 24% in Zambia to 58% in Ghana.

These figures suggested that the informal economy was not only a significant employer but was critical to local economies, he said.