Growth is the key to success
● Productivity SA chairman Mthunzi Mdwaba has said the importance of productivity growth in SA needed to be publicised as it is vital to boost the country’s economic and employment growth.
Mdwaba was speaking at the National Productivity Awards 2018 in Midrand this month.
On the recent two-day job summit led by President Cyril Ramaphosa to bring government, business and labour together to address the country’s unemployment issues, Mdwaba said there was not enough understanding of the importance of productivity.
“Lacking is the realisation that productivity and competitiveness are the central drivers of sustainable economic performance, job creation, poverty alleviation as well as reducing income inequality and wealth inequality.
“Productivity SA, with its demonstrable resourcefulness, appears four times in the framework document and is limited to job saving. This, of course, is improvement,” he said.
But it is expected SA would in the near future develop and adopt a broad productivity and competitiveness enhancement strategy with productivity as a catalyst for sustainable inclusive growth and development.
Mdwaba said in an effort to save struggling companies, the department of labour and the government had committed to engaging with Productivity SA and appropriate international partners.
“Labour and government committed to engage to develop a shop-floor programme to assist in identifying firms at risk, and to implement comprehensive interventions to divert firms towards sustainable growth.”
The summit also adopted Productivity SA material for the Commission for Conciliation, Mediation and Arbitration (CCMA) and Business Unity SA (Busa) web tool, with the purpose of improving employer and worker understanding and compliance, reducing red tape and the associated costs contributing to workplace stability and certainty in SMME workplaces.
“The importance of productivity growth needs to be publicised as a national agenda through the establishment of a National Productivity Council to drive the movement with strong commitment and effective oversight from the highest level of leadership in both government and private-sector circles,” Mdwaba said.
“It is therefore necessary for the government to resource Productivity SA appropriately, act in accordance with the Employment Services Act, while instilling a missing urgency of appreciating the importance of productivity in every sector.”
Resourcing and training
The summit further committed to providing better resourcing and training for Productivity SA, he said.
One of the international development partners, the International Labour Organisation, also committed to offering an array of support services to Productivity SA, including workshops, training and workplace interventions.
Giving the keynote address at the awards, ILO assistant director-general and regional director for Africa Cynthia Samuel-Olonjuwon revealed that productivity in SA was rising but at a decreasing rate.
Announcing the findings captured by the ILOSTAT, a comprehensive labour market database compiled by the ILO, she said the slowing down of labour productivity was linked with reduced economic growth.
Between 2000 and 2018, output per worker increased 24%. Between 2000 and 2010, labour productivity grew 3%.
“During this period, economic growth averaged 1.8%,” Samuel-Olonjuwon said.
Labour productivity only grew by 1% between 2010 and 2018.
“It is important to acknowledge the great work done by StatsSA, particularly the quarterly labour force surveys, on which also a large share of our statistics rely.
“These statistics are telling an important story for SA. First, labour productivity has been rising but at a decreasing rate. Second, the slowing down of labour productivity is correlated with reduced economic growth. Third, the slowing of economic growth and labour productivity come at the worst time — one where unemployment rates remain dangerously high,” she said.