ECONOMIC GROWTH THROUGH SKILLS DEVELOPMENT – A SOCIO- ECONOMIC PERSPECTIVE Premier’s Dialogue with SETAs & NSA Consultative Workshop 2 May of 20

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 2 of 20

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 3 of 20

SOCIO-ECONOMIC CHALLENGES OF MPUMALANGA Socio- economic challenges High HIV prevalence Educational challenges High unemployment Low HDI High inequality High poverty Household services challenges Low economic growth Sectoral dependency Unequal economic distribution High inflation MEGDP central challenges 1. Reduce unemployment 2. Reduce poverty 3. Reduce inequality 4 of 20

IMPERATIVE – ACCELERATE ECONOMIC GROWTH Growth target – average GDP growth minimum 5% per annum Forecasted growth 5 of 20

LINKING ECONOMIC GROWTH & EMPLOYMENT GROWTH High Medium Low 6 of 20

CHALLENGE – REDUCE UNEMPLOYMENT 7 of 20

CHALLENGE – REDUCE UNEMPLOYMENT unemployed at the end of Q – Youth (15-34 yr) = 72.7% of unemployed Specific unemployment rates: – Male = 24.9% – Female = 34.8% – Youth (15-34 yr) = 40.3% Additional discouraged job seekers Target to reduce unemployment to 15% by 2020 (MEGDP) and 6% by 2030 (NDP) 8 of 20

CHALLENGE – REDUCE POVERTY 9 of 20

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) 10 of 20

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% 11 of 20

CHALLENGE – REDUCE INCOME INEQUALITY NDP target = poorest 40% to earn 10% of income by of 20

IMPROVE EDUCATION OUTCOMES 13 of 20

IMPROVE EDUCATION OUTCOMES TO IMPROVE INCOME 14 of 20

IMPROVE EDUCATION OUTCOMES TO IMPROVE EMPLOYABILITY Strict unemployment rate by specific levels of education Level of educationUnemployment 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 15 of 20

IMPROVE EDUCATION OUTCOMES – TARGET GROUPS 16 of 20

IMPROVE EDUCATION OUTCOMES – TARGET INDUSTRIES 17 of 20

IMPROVE EDUCATION OUTCOMES – TARGET INDUSTRIES 18 of 20

IMPROVE EDUCATION LEVELS – TARGET AREAS 19 of 20

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 20 of 20