Cape Town - Although South Africa’s economy is not growing as rapidly as expected and the country is shedding jobs, there is no reason to lose faith in the National Development Plan (NDP), said Minister of Rural Development and Land Reform Gugile Nkwinti.
He was part of a delegation of three ministers who briefed the media following a Cabinet meeting on Wednesday.
Nkwinti was responding to a question about the rise in the unemployment rate and whether the NDP should still be considered a viable document to address joblessness, equality and poverty in South Africa.
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The Quarterly Labour Force Survey released on Monday showed that the official unemployment rate stood at 26.7% for the first quarter of 2016. This means 5.7 million out of South Africa’s 36.4 million people of working age were unemployed during the first four months of 2016.
Nkwinti added that unemployment under unskilled youth is especially problematic. "It’s an education matter and we should see what we can do about."
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According to the survey, in the first quarter of 2016 the percentage of youth not in employment or education and training amounted to 33%, and three out of every five young people in this category have an education level below matric.
Nkwinti said the NDP is still a relevant document for addressing South Africa’s socioeconomic problems. “We don’t know what could happen in the next 10 to 15 years,” he said. “In our view there are great opportunities in South Africa’s former Bantustan areas and townships. We can grow the economy there.”
To this end, ministers in the economic cluster are drafting a socioeconomic infrastructure network development plan to incorporate areas where the economy could potentially grow, Nkwinti said.
Moody’s credit rating
Earlier in the briefing Defence Minister Nosiviwe Mapisa-Nqakula, who read the official Cabinet statement, welcomed the announcement by Moody’s Investor Services that it would not downgrade South Africa’s credit rating.
Moody’s current grading of South Africa is two notches above sub-investment grade with a negative outlook, but the agency acknowledged in its recent assessment that the country is approaching a turning point.
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“All parties agree that collaborative efforts need to be strengthened to give impetus to the economic recovery,” Cabinet said in its statement. “We are also working hard to remove domestic impediments to growth.”
Banks and the Oakbay saga
In response to a query about the alleged meeting three cabinet ministers had with South Africa’s four biggest banks, Mapisa-Nqakula said Cabinet has not been briefed about the matter. She urged journalists to wait for the report to be officially tabled.
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Labour Minister Mildred Oliphant said on Tuesday that a meeting with the banks had taken place, following an earlier cabinet statement to this effect.