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High unemployment worries FS Treasury

Free State Treasury MEC, Elzabe Rockman, delivering the 2018/19 Mid-term Budget Speech at the Fourth Radsaal in Bloemfontein

By Chamu Wilson                                                                             –

The high rate of unemployment in the Free State is a worrying development, the provincial Treasury Member of the Executive Council (MEC), Elzabe Rockman, has said.

Speaking in an interview on Thursday following the 2018/19 Adjustment Appropriation Budget Speech at the Provincial Legislature earlier in the week, Rockman said the fact that recent statistics show the Free State as having the highest unemployment figures in the country is a cause for concern for the provincial government as a whole.

“It is very worrisome that instead of declining, the unemployment rate has actually gone up. We are aware that we have graduates coming from colleges and universities every year, but we need to create a conducive environment for employment creation. That is why we have taken the deliberate stance to support the SMMEs sector which has the potential reversing this trend,” Rockman said.

The MEC was quick to add that, although the sector has immense potential to contribute positively to the provincial Gross Domestic Product (GDP), it is faced with several challenges that need to be attention.

“One of the challenges faced by SMMEs is that most government departments are not adhering to the 30-day payment regulation. We are aware that, currently, only Treasury, DESTEA and Legislature are paying suppliers within 30 days. The rest, including municipalities, are not. We will soon be taking action against defaulting departments and officials might find themselves being hauled before a disciplinary hearing and charged subsequently,” she declared.

In her mid-term budget speech to the provincial Legislature, Rockman said paying suppliers in time is part of the Free State Provincial Growth and Development Strategy (FSGDS).

“There are a few non-negotiable basic economic principles that must be implemented by both our provincial and local government sectors that will benefit the Free State economy immediately. These include; payment of suppliers within 30 days, especially SMMEs. This remains an area of particular concern, both at provincial and local government level. The importance of the SMME sector in our quest to achieve economic growth and job creation can never be over-emphasized. But this is the sector that continues to face unnecessary burdens and challenges to get paid timeously for the delivery of goods and/or the rendering of services,” she said.

The MEC also urged government departments to ensure that “budget and particularly expenditure” must predominantly support initiatives that will result in growth of the Free State economy.

Rockman blasted the practice of awarding tenders to companies from outside the province when there are enterprises that are equally competent to do the same job in the Free State.

“We need to come to a point where government supports companies that are operating in the province. We cannot have a situation where money goes out and end up supporting the growth of other provinces. The economy of Gauteng or KZN is already stronger than ours so why should we be taking money from the province to them?” Rockman queried.

Meanwhile, the official Free State unemployment rate now stands at 36.3 percent with the expanded unemployment rate now at 41.5 percent. The province recorded a 1.8 percent employment loss compared to the second and third quarter last year and 5.8 percent loss on the year-on-year employment figures.

The most affected group is people having an education level of less than matric who make up 56.1 percent of unemployed people while those with a matric level made up 35.1 percent. Almost two in every 100 unemployed people are university graduates.

The provincial economy continued to shrink and is now expected to regress by minus 1.5 percent in 2018 which is a slight improvement from the 2017 figure of minus 2.9 percent. This is in contrast to the 0.4 percent which was forecasted before the 2018/19 Budget in March.

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