KwaZulu-Natal employment rate ‘unacceptably low’, positive signs of economic recovery


MEC for finance at KZN Nomusa Dube-Ncube

  • KwaZulu-Natal has a high unemployment rate among its young people, at almost 60%.
  • The Ministry of Education received the lion’s share of the provincial budget.
  • The health department received the second-largest slice of the budget pie.

KwaZulu-Natal Finance MEC Nomusa Dube-Ncube is optimistic about the 2022/23 financial year, despite heavy financial blows in the province over the past year.

During his budget speech on Wednesday night, Dube-Ncube said the economy was showing “positive signs of a full recovery,” but added that employment remained “at an unacceptably low level.”

According to the MEC, the number of people in employment fell by 5.1% in the third quarter of 2021.

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“Unfortunately, youth unemployment has also continued to rise, primarily when measured using the broader definition, which includes discouraged job seekers. As a result, around 59.3% of young people aged 15 to 34 years old are unemployed.”

The provincial economy is estimated to have peaked at 4.2% in 2021, while real output is expected to decline somewhat to 1.7% in 2022 and 2023, she said.

Medium Term Expenditure Framework

Dube-Ncube said that globally there has been some recovery from the 2020 Covid-19 pandemic, “recovery at the national level has been affected by the unrest that occurred in July 2021, as well as by the high unemployment rate.

This, she said, has led to lower expectations for economic growth.

The MEC, however, was positive about the improvement in tax revenue “due to the commodity price cycle”.

She says:

Improvements in tax collection have become broader than evident in the first three quarters of the prior year, therefore tax collections are expected to increase. Significant fiscal risks remain, however.

She added: “Domestically, we have higher risks related to the contingent liabilities of our largest state-owned enterprises (SOEs), and the cost of borrowing is rising, especially the cost of foreign borrowing.

Budget allocation

The largest portion of the over R140 billion budget went to education, with R57.5 billion or 40.9% of the total. The biggest cost driver for this department is employee compensation, with an average of 89% of the total fair share budget going to this category, Dube-Ncube said.

The department reports that there are 5,807 regular public schools with 2,657,055 students, 75 special public schools “where the number of learners is not yet finalized”, and 131 independent schools with 32,153 students.

“The budget provides for the upgrading of ICT infrastructure and the purchase of IT equipment, such as hardware, and will also upgrade servers and data lines.”

She said the department has set a target to equip 54 schools with ICT equipment (primary and secondary schools). Two software systems are expected to be introduced in 2022/23, namely online submission and leave management systems.

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“The electronic submission system will be used to process all official documents to ensure the efficiency of the system,” Dube-Ncube said.

The second highest allocation was health, with a budget of R49.6 billion or 35.3% of the budget.

“Most of the department’s budget allocation is for the provision of primary health care services to approximately 87.4% of the uninsured population of KZN.

She added:

The department also plans to increase the average number of daily operational ambulances from 185 to 225.

Dube-Ncube said the health department was in the planning phase of transforming four district hospitals into regional hospitals to help rural populations in uMkhanyakude, Harry Gwala, Zululand and uMzinyathi districts.

There are three tertiary hospitals (Greys, King Edward VIII and Ngwelezane Hospitals) and one central hospital in KwaZulu-Natal, the Inkosi Albert Luthuli Central Hospital.

The medium to long term plan is to expand both King Edward VIII and Ngwelezane hospitals to provide full packages of tertiary hospital services, Dube-Ncube said.

“The new Dr. Pixley ka Isaka Seme Memorial Hospital (PKISMH) was scheduled to be commissioned in 2021/22. As of today, the PKISMH is 99% complete, with a phased implementation process having already begun over the past few months , with other aspects of commissioning will be phased in the future.The hospital will have 500 beds and approximately 1,500 staff when fully operational.

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