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ECONOMIC GROWTH THROUGH SKILLS
DEVELOPMENT – A SOCIO-ECONOMIC PERSPECTIVE
Premier’s Dialogue with SETAs & NSA Consultative Workshop2 May 2013
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POINT OF DEPARTURE
• Economic growth is important to address socio-economic challenges– Interrelationship between factors!
• Education and skills are key elements in achieving economic growth– Scarcity of skills data on sub-national level!
• Primary source of information – StatsSA– Census 2011, GDP & QLFS
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ECONOMIC GROWTH IMPERATIVE
“We need [economic] growth rates in excess of 5%...” President JG Zuma, 14 Feb 2013 (SONA)
“We have to work hard and grow the provincial economy at a rate of between 5% and 7% per
annum...” Premier DD Mabuza, 1 March 2013 (SOPA)
“...the rate of economic growth needs to exceed 5% a year on average.”
National Development Plan
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SOCIO-ECONOMIC CHALLENGES OF MPUMALANGA
Socio-economi
c challeng
es
High HIV prevalence
Educational challenges
High unemploym
ent
Low HDI
High inequality
High poverty
Household services
challenges
Low economic growth
Sectoral dependency
Unequal economic
distribution
High inflation
MEGDP central
challenges
1. Reduce unemployme
nt
2. Reduce poverty
3. Reduce inequality
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IMPERATIVE – ACCELERATE ECONOMIC GROWTH
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-5%
0%
5%
10% Historic and forecasted GDP growth by region, 1996-2016
World Emerging & developing South Africa MpumalangaYear
Ann
ual G
DP
grow
th
• Growth target – average GDP growth minimum 5% per annum
Forecasted growth
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LINKING ECONOMIC GROWTH & EMPLOYMENT GROWTH
0%
1%
2%
3%
4%
5%
6%
7%
8%
Real GVA growth 2001-2011
Ann
ual a
vera
ge g
row
th r
ate
High growth in-dus-tries
62.2%
Medium
growth in-dus-tries
27.0%
Low growth industries
10.8%
Contribution to employment changes 2001-2011
High
Medium
Low
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CHALLENGE – REDUCE UNEMPLOYMENT
LP KZN NW GP WC RSA NC MP EC FS0%
5%
10%
15%
20%
25%
30%
35%
Comparative strict unemployment rate per region, Q4 2011 – Q4 2012
Region
Une
mpl
oym
ent
rate
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CHALLENGE – REDUCE UNEMPLOYMENT
• 399 000 unemployed at the end of Q4 2012– Youth (15-34 yr) = 72.7% of unemployed
• Specific unemployment rates:– Male = 24.9%– Female = 34.8%– Youth (15-34 yr) = 40.3%
• Additional 226 000 discouraged job seekers• Target to reduce unemployment to 15% by
2020 (MEGDP) and 6% by 2030 (NDP)
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CHALLENGE – REDUCE POVERTY
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0%10%20%30%40%50%60%
40.6% 37.7%
45.4%41.6%
Comparative % of population in poverty in SA & Mpumalanga, 1996-2011
South Africa Mpumalanga
Year
% o
f pop
ulat
ion
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CHALLENGE – REDUCE POVERTY
• In 2011, 1.59 million citizens of Mpumalanga lived in households with an income less than the poverty income (MLL)– e.g. R2 658 household of 4 & R3 695
household of 6• Target to reduce % of people in
poverty to 0% by 2030 (NDP)
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CHALLENGE – REDUCE INCOME INEQUALITY
• National Gini-coefficient 0.63 in 2011 – increased from 0.62 in 1996
• Mpumalanga Gini-coefficient 0.62 in 2011 – increased from 0.60 in 1996 & therefore income distribution was more unequal in 2011 than it was in 1996
• In 2011, the wealthiest 20% of the population earned 68.2% of income & the poorest 40% only 8.1%
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CHALLENGE – REDUCE INCOME INEQUALITY
1996 20110%
10%20%30%40%50%60%70%80%90%
100%
8.2% 8.1%
65.5% 68.2%
Comparative shares of income in Mpumalanga, 1996-2011
Wealthiest 20%40-80%Poorest 40%
% o
f inc
ome
NDP target = poorest
40% to earn 10% of
income by 2030
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IMPROVE EDUCATION OUTCOMES
No school-ing
Some primary
Completed primary
Some secondary
Matric Higher0%
10%
20%
30%
40%
30.3
%
14.6
%
6.5%
28.1
%
14.9
%
5.5%
14.1
%
11.7
%
4.2%
31.4
%
29.0
%
9.7%
Highest level of education (age 20+) in Mpumalanga, 1996-2011
1996 2001 2011
Level of schooling
Perc
enta
ge o
f po
pula
tion
20+
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IMPROVE EDUCATION OUTCOMES TO IMPROVE INCOME
Education Income0%
10%20%30%40%50%60%70%80%90%
100%
29.0%
30.8%
9.7%
45.2%
Comparative contribution to education and income, 2011
HigherMatricSome secondaryCompleted primarySome primaryNo schooling
% c
ontr
ibut
ion
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IMPROVE EDUCATION OUTCOMES TO IMPROVE
EMPLOYABILITYStrict unemployment rate by specific levels of educationLevel of education Unemployment rate
Matric completed 31.6%Matric & certificate completed 20.6%
Matric & diploma completed 9.4%
Matric & degree+ completed 4.1%• 20.1% of 2012 matriculants obtained admission to higher
certificate studies• 29.8% of 2012 matriculants obtained admission to diploma
studies• 19.8% of matriculants obtained admission to bachelor studies
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IMPROVE EDUCATION OUTCOMES – TARGET GROUPS
Employed Unemployed0%
20%
40%
60%
80%
100%
Education levels of Economically Active Population, Q4 2012
% c
ontr
ibut
ion
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IMPROVE EDUCATION OUTCOMES – TARGET
INDUSTRIES
Agriculture Mining Manufacturing Utilities Construction0%
20%
40%
60%
80%
100%
Education levels of employed according to industry, Q4 2012
% c
ontr
ibut
ion
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IMPROVE EDUCATION OUTCOMES – TARGET
INDUSTRIES
Trade
, cater
ing & ac
commod
ation
Transp
ort & co
mmunica
tion
Finan
ce & bu
siness
servi
ces
Commun
ity se
rvices
0%20%40%60%80%
100%
Education levels of employed according to industry, Q4 2012
% c
ontr
ibut
ion
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IMPROVE EDUCATION LEVELS – TARGET AREAS
Employed Unemployed0%
20%
40%
60%
80%
100%
Geographic distribution of Economically Active Popu-lation with some secondary schooling & matric, Q4
2012
% c
ontr
ibut
ion
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CONCLUSION• To achieve higher economic growth:
─ The country has to develop the capabilities of the workforce on a broad scale so that we can grow faster
• To reduce unemployment:─ In order to raise employment, South Africa
[Mpumalanga] needs better educational outcomes• To reduce poverty:– Eliminate poverty by....building capabilities
• To reduce inequality:─ Skills constraints push up the premium for skilled
labour, inducing large difference in salaries of skilled & unskilled people, raising levels of inequality
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