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SOUTH Africa is on a good path to unlock economic growth through infrastructure development.
Many examples of construction projects through government’s investment commitments are available. There are also many stories of foreign direct investment (FDI) inflows to South Africa and infrastructure development projects from global investors.
Our National Development Plan (NDP) acknowledges and values the association between economic growth and infrastructure development. Understandably, the National Infrastructure Plan, with its 18 strategic integrated projects, are catalytic projects developing our economy through tangible assets – schools, roads, hospitals, public spaces and so forth.
However, in general the pace has been somewhat slow compared to other developing nations. It is important that we now take stock of human resources dynamics and skills shortages in South Africa, which are exasperating this situation.
Of course, there are stellar cases of successful projects too. These have been completed ahead of time, within budget and are assets that are in line with (and possibly exceed) global quality standards.
However, a balance sheet of our existing challenges and future opportunities is absolutely necessary if we - government, skills and education institutions, private sector, labour unions and communities - are truly committed and supportive to infrastructure development as a critical project for unlocking economic growth.
I have three major concerns around infrastructure development in South Africa, and these include the knowledge and experience of locally educated and trained people, the acceptable level of productivity of South African labour, and labour stability on infrastructure projects.
Finding sustainable solutions to address these issues must be a priority if we plan to achieve higher levels of economic development and growth, eradicate poverty and unlock new job opportunities - especially for individuals and communities affected by income inequality.
It should also be noted that solutions to the country’s challenges not only rest on the shoulders of government - a sustainable future predicated on distributed wealth and prosperity is also very much the responsibility of the private sector, local communities and our labour unions.
1. Industry should play a greater role in skills development and training
The human resource capacity exists in South Africa to meet the needs of infrastructure development. Further Education Technology (FET) colleges and Higher Education Technology (HET) institutions are producing graduates, artisans, future leaders and people with technical skills.
However, graduates do not yet have the knowledge, skills and experience to undertake the extent of work required to build the infrastructure works outlined in the strategic integrated projects.
A young person exiting an education or training institution only has the basic level of knowledge to function in their chosen field of study. Engineers, scientists, project managers, toolmakers, and welders are not able to function at acceptable competency levels the day after they leave education and training institutions.
It takes years of experience and practice to perfect the skills required to be effective in their chosen occupation.
The system for developing young people in South Africa does not adequately cater for this challenge. In developed countries this process is institutionalised in the sense that industries and the education sector partner and work together to augment the skills and knowledge of its young people. We do not have a system like this in South Africa.
It is time to revaluate why this is so vital and why we need this. Otherwise I don’t see us moving forward without closer integration.
The solution to the problem of the shortage of knowledge and experience is to ensure that every opportunity is sought for capacity-building. It has worked successfully in other parts of the world where a multi-prong approach is adopted.
Some strategic projects and initiatives include: partnerships between industry and education and training institutions to provide the necessary guidance on the current and future skills needs; the return of industry training boards, where training becomes the responsibility of industry and not academic institutions; and the provision of real incentives for workplaces to take on newly qualified young people.
Furthermore, the creation of a sense of cohesion for all South Africans with experienced people teaching their inexperienced colleagues is also vital.
2. Unions, industry and government should look at programmes unlocking higher levels of labour productivity
South African labour is regarded and perceived as one of the worst performing workforces from a productivity perspective in the world.
The country cannot attract investment when foreign and even domestic investors (including the government) have concerns about an uncompetitive environment and project delays. We find that it is very difficult to explain to investors that the relatively high wages paid in South Africa, compared to other parts of the developing world, produce productivity levels that are sub-standard.
Investors expect that, with high unemployment levels in South Africa, productivity would be high and employment opportunities would be valued.
However, we are currently experiencing the polar opposite. We face high absenteeism, work disruptions and high crime levels that create a highly unproductive environment for construction and infrastructure development. It is difficult to attract significant investment when our competitors in South East Asia, the Middle East and Eastern Europe have highly productive workforces. So in short, we lose foreign investment to these countries.
The issue of productivity is a complex one, but is largely due to how we prepare people for work and how we manage them at work.
I would like to see more innovative programmes that ingrain deep levels of commitment, responsibility and shared ownership to economic activity and infrastructure development projects, which are necessary to improve our country’s productivity in the construction sectors.
FET institutions should develop and include programmes in curricula, which instil deeper levels of commitment, work ethic, responsibility and shared ownership. These programmes should run parallel with the technical training individuals receive.
Construction companies should also put management and training interventions in place to support the aforementioned.
Labour unions should also take greater responsibility in understanding how disruptions through strikes affect productivity and profitability, which in turn have long-term cataclysmic effects on future job security and the country’s attractiveness to foreign investors. This brings me to the last point.
3. Success stories of projects with high levels of labour stability
The third concern is labour instability. South Africa is fast becoming internationally renowned as the global capital for unprocedural labour disruptions. This creates delays in the completion of infrastructure projects, which is uneconomic for investors and South African taxpayers.
The current example is the new fleet of coal-fired power stations being built by Eskom. The projects are behind schedule by many years and are costing South Africans many extra billions of rands. While there are numerous reasons for this, the issue of labour disruption remains a major concern.
Labour stability in SA has been the undoing of many projects. There are examples of very successful projects that have been completed ahead of time and within budget. And so there are lessons to be learned from how these have been managed, what systems were put in place, and where all beneficiaries felt a sense of ownership.
This is an issue that needs a great deal of attention. Well before any project commences there is a requirement for a consistent and honest approach in dealing with stakeholders that might have ulterior motives. Strong and balanced leadership and a “social accord” where all beneficiaries genuinely support the end goals is what we need.
* Duncan Grenfell is Coega Development Corporation’s head: recruitment and placement: human capital solutions. Views expressed are his own.
