Employment and labour are vital components of economic development. A vibrant labour market attracts foreign direct investment and improves living standards for people throughout the Southern African Development Community (SADC) region.
At present, employment and labour productivity in SADC Member States remains low, with a large number of people currently engaged in subsistence farming rather than formal employment. Furthermore, structural changes from the implementation of the SADC Free Trade Area have affected businesses that were protected by tariffs and lack of competition, which can negatively affect local employment. In addition, the introduction of efficient technologies can reduce the demand for employment in productive sectors such as oil, gas and mining, thereby increasing the skill requirements necessary for those jobs that remain available. Extractive industries are also capital-intensive, which creates a barrier to entry for potential local business owners. In response to these issues, the labour force has turned to informal systems of employment, which are characterised by lower incomes, insecurity and under-employment.
In the long run, as countries specialise in areas where they have a comparative advantage, SADC anticipates newly productive industries will absorb people available for work. These workers will then contribute to industries with more sustainable paths of growth into the future. Likewise, as industries become more technologically advanced, they also become more productive, which positively impacts employment and economic growth.
Challenges and Policies
Two of the primary goals of SADC are sustained economic growth and poverty eradication, which were further reinforced with the establishment of the Protocol on Finance and Investment in 2006. The Protocol on Finance and Investment aims to create new employment opportunities by focusing on industries that provide upstream and downstream linkages with other sectors, while also attracting foreign direct investment.
SADC is also guided by the Regional Indicative Strategic Development Plan, which has been developed, in-part, to address several key challenges related to labour in Southern Africa:
- Removing structural distortions in the economies of Member States and combating of high-levels of unemployment and under-employment, especially among women and youth;
- Addressing Gender inequalities in the labour markets and inadequate mainstreaming of gender concerns in the policy formulation and programme implementation;
- Inadequate integration of employment and labour issues in overall economic and social development;
- Weak institutional and human capacity for the collection, analysis, harmonisation, utilisation and dissemination of labour market information and data;
- Lack of a policy framework for promoting social dialogue and social protection;
- Lack of a comprehensive framework to facilitate smooth movement of labour as a factor of production;
- Lack of a comprehensive regulatory mechanisms to promote the informal sector;
- The impact of HIV and AIDS on the most productive segment of the labour force; and
- Lack of positive cultural attitudes towards productivity, entrepreneurship and innovation.
SADC advocates the development of appropriate policies and legal frameworks through the adoption of protocols in these areas. SADC has already designed programmes intended to address the above issues and has established partnerships with stakeholders and other intergovernmental agencies to share expertise, information, and best practices regarding employment.
Increased Opportunities for Employment
With respect to employment and labour, the primary objective of SADC at present is to increase opportunities for employment in the region. To meet this objective, labour productivity needs to improve, but while labour productivity increased steadily at 1.3 % per year throughout the 1990s, little change has been recorded since.
Following from the assertion that inadequate labour standards and regulations are responsible for low employment rates, SADC began implementing standards developed by the International Labour Organization in 1997. The International Labour Organization is also providing half of the funding for a long-term programme intended to increase employment in the region. The programme is already yielding positive results: from 2010 to 2011, 200,000 jobs were created in South Africa alone, 60 % of which were for women.
However, the Employment and Labour Sector of SADC still faces problems with job creation. High levels of investment are necessary to promote employment, but much of this funding is lacking at present. Similarly, demographic trends show that the youth labour force is growing in geographical areas with few opportunities for rewarding employment.
Likewise, the SADC Major Achievements and Challenges handbookindicates that over 60 % of those employed are engaged within the agricultural sector, which only accounts for 10 % of the Gross Domestic Product (GDP) of the SADC countries combined. Meanwhile, industry and services that employ 30 % of the workforce account for 90 % of the GDP of the SADC region. For this reason, SADC is promoting opportunities for entrepreneurship with a focus on high employment-yielding industries such as mining and tourism.
- Protocol on Finance and Investment
- The Regional Indicative Strategic Development Plan
- SADC Major Achievements and Challenges handbook