Bloomberg reports that according to the World Bank, SA can bolster hiring by temporarily extending tax incentives, suspending rules that increase labour costs and introducing measures to support entrepreneurship and self-employment.
While other reforms, including tackling electricity supply constraints, remained pivotal, time-bound emergency measures to support poorer workers and create jobs were needed as the economy recovered from the devastation wrought by the coronavirus pandemic, the Washington-based lender said on Monday in its SA Economic Update. SA's economy contracted the most in a century in 2020 and lost 1.4-million jobs as restrictions to curb the spread of the virus weighed on output and forced some businesses to cut wages, reduce staff or permanently shut down. “To put this into perspective, it took the country six years to add 1.4 million jobs to its pre-pandemic economy,” the World Bank pointed out. SA’s unemployment rate stood at a record 32.6% in the first quarter of 2021. Analysts blame the problem on an education system that doesn’t equip students with adequate skills to find jobs and strict labour laws that make hiring and firing onerous. The World Bank suggested that the government deepen employment tax incentives and temporary relief for industries affected by stop-start lockdowns until a sizeable number of firms become operational again. Both measures should be time-bound and could support 2.3-million jobs at a cost of R18bn a year, it said. The government, labour unions and business groups could consider negotiating a temporary suspension of regulations that increase labour costs and impede hiring, the World Bank also said.
- Read the full original of the report in the above regard by Prinesha Naidoo at BusinessLive
- Read too, World Bank outlines plan for SA to speed up reforms, at BusinessLive
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