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'Create jobs and cut cost of electricity'

26 February 2013
Yolandé Stander

FINANCE Minister Pravin Gordhan will have his work cut out for him tomorrow as South Africans wait for him to deliver a budget speech expected to address some of the country's biggest challenges.

For Nelson Mandela Bay Black Business Forum president Litemba Singapi, unemployment is still a major problem and needs to be tackled through the budget.

"To create jobs, the government should pledge more support to small to medium businesses because they are major employers," said Singapi.

One way would be to announce electricity subsidies.

"If government wants to create jobs, it needs to make electricity more affordable. All the tariff increases are killing businesses and subsequently opportunities for job creation."

Nelson Mandela Bay Ratepayers' Association chairman Kobus Gerber backed the call.

"We need affordable electricity – otherwise unemployment will go through the roof. Businesses cannot be sustainable with astronomical input costs like electricity," Gerber said.

According to the Human Sciences Research Council's (HSRC) latest South African social attitudes survey (Sasas) the biggest problems are unemployment, crime and education.

More than 50% of those surveyed are also dissatisfied with the economic situation.

Consumer economist Tendani Mantshimuli said very little detail on the National Development Plan had been provided in President Jacob Zuma's recent state of the nation address. She expected the minister to "put flesh to the framework".

"It's important to get the economy growing to the 5% needed to create more employment.

"The job fund that was announced in last year's budget has done little to dent overall unemployment and during 2012 the economy has added only 80000 jobs. That is way down from the target level of 500000 a year," Mantshimuli said.

Nearly half of South Africans also believe crime is still a major challenge, with poverty (33%), HIV/Aids (31%) and corruption (28%) also major concerns.

"Crime is definitely still a major problem. In some of the township areas the crime is preventing businesses from operating. The minister needs to ensure that there are enough resources to fight crime," Singapi said.

With 28% of those surveyed labelling themselves as "poor" or "very poor", it is no surprise that South Africans want Gordhan to act urgently on unemployment.

Rhodes University economics head Professor Hugo Nel is expecting Gordhan to address it by promoting economic growth.

"We've had a very slow economic growth rate since the world economic crisis which hampered job creation and added to low investor confidence. Gordhan will have to spend more on infrastructure and capital projects."

Nel said Gordhan also needed to be careful not to raise income tax or burden business with excessive taxes.

"On the one hand we say spend more and on the other we don't want taxes to be raised. This is going to be a fine balancing act for the minister."

South Africans also hope Gordhan will budget for improvements in service delivery, especially housing. In the survey, 32% indicated their access to housing was inadequate. More than 28% report access to healthcare is poor and another 28% say access to transport is insufficient.

Nelson Mandela Bay Business Chamber chief executive Kevin Hustler said he would be listening intently for workable measures to address competitiveness and sustainability, as well as the development of critical infrastructure and catalytic projects in the Eastern Cape economy.

"We hope to hear solutions for efficient and effective service delivery for business to ensure an investor friendly and enabling environment," Hustler said.

This was needed to counter the cost of doing business in South Africa becoming prohibitive.

There was also a need to overcome "the burdensome bureaucracy of compliance".



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