South Africa is facing a severe unemployment crisis, according to Ann Bernstein, Executive Director of the Centre for Development and Enterprise (CDE), who warns that without urgent reforms, the country’s economy is headed for disaster.
The nation’s official unemployment rate, currently at 31.9%, is only a reflection of those actively seeking work, leaving out many who have given up entirely. Bernstein stresses that the country’s slow progress in addressing these issues is putting millions of South Africans at risk. She believes that the current pace of economic reforms is insufficient to address the deepening crisis.
“We’re in deep, deep trouble,” Bernstein said in an interview with Sunday Times. “The challenge is the many things that are wrong and hindering growth and employment. We must act quickly to fix the environment for faster growth.”
The CDE’s latest ACTION report, released alongside the interview, points to a lack of government focus on creating conditions that would stimulate faster economic growth. One major concern raised by the report is the government’s approach to small business development, which it argues is failing to create the kind of businesses that can generate sustainable employment.
The report criticizes the government for directing resources into small business schemes that are not yielding significant results, especially in areas with limited economic potential. Instead of focusing on developing businesses that can grow and create jobs, the government has relied too heavily on ineffective public schemes.
Bernstein argues that the Department of Small Business Development should be abolished and its responsibilities transferred to the private sector, which she believes has the experience and expertise to grow businesses from small to medium enterprises. She points to the government’s wasteful spending of R6 billion annually on small business development without seeing any meaningful progress.
While acknowledging that the private sector is not perfect, Bernstein believes it is far better equipped to support business growth. She also advocates for deregulation and the elimination of forced localisation policies, which she says drive up prices, foster inefficiency, and contribute to corruption.
The government’s procurement policies, particularly those involving state-owned enterprises like Eskom, are also under scrutiny. Bernstein claims that exemptions to localisation and Black Economic Empowerment requirements for certain projects only serve to undermine broader economic policies.
Despite promises from the government to reduce red tape, Bernstein argues that there has been no substantial shift toward a more business-friendly environment. The lack of bold action on this front, she claims, has worsened the economic situation.
The CDE’s report also criticizes the current government of national unity (GNU) for continuing the same policies that, according to Bernstein, have led South Africa into its present economic predicament. Bernstein also pointed to the growing pressure from the international community, particularly from the United States, as further evidence of the country’s fragile economic state.
