South Africa on Tuesday launched a nine billion rand ($1.3-billion, 911-million-euro) fund that aims to create 150,000 jobs in three years to fight the country’s 25 percent unemployment rate
Finance Minister Pravin Gordhan said South Africa needed “a new boldness and a new energy to be infused into the job creation process,” with two billion rand set aside to fund employment projects in 2011.
“Perhaps even more importantly, we need to be able to demonstrate that we can deliver on policy pronouncements and focus more on delivery than on talk about jobs,” he told reporters.
South Africa wants to create five million new jobs by 2020 but unemployment rose to 25 percent in the first quarter of the year — reaching 33.4 percent if discouraged job seekers are included.
The fund is open to proposals from government departments, municipalities, business and NGOs on Tuesday and will issue grants for job programmes.
“This fund is a bold new venture that acknowledges we have got a problem,” said Brian Whittaker, deputy chair of the fund’s investment committee.
“Very high numbers of especially young people out of work is something that the country can’t live with and for which we don’t really have known and fixed solutions. There’s an opportunity here to do something innovative.”
The fund will be administered by the Development Bank of Southern Africa and aims at a matched funding ratio for private sector applicants.
“The establishment of the fund doesn’t remove the constraints but what hopefully the fund does is releases a degree of creativity that we haven’t seen before,” said Whittaker.
“It will enable us as a country to be bolder on some of the initiatives than we have before and to take some risks.”
The fund works on a co-funding approach, with the private sector expected to match grants awarded.