Jobs Fund succeeds at ‘too high a cost’

The head of the Jobs Fund, Najwah Allie-Edries, has conceded that the cost of creating new employment under the programme was exorbitant and that the real answer to job creation lies with thriving private-sector enterprises.
The average cost per job the Jobs Fund created was R52,000, excluding the cost of the fund’s administration.

The cost of creating a job in the agricultural sector, the new focus of the programme, would be much higher, Ms Allie-Edries told MPs during a briefing on Wednesday.

African National Congress MPs expressed concern over the high cost per job and questioned whether the funds — allocated from the fiscus — could not be more fruitfully spent elsewhere.

The Jobs Fund alone was not enough to deal with the unemployment problem, Ms Allie-Edries said. The fund had to be taken together with the government’s other programmes such as the expanded public works programme (EPWP), community works programme and incentive programmes.

But Ms Allie-Edries indicated that the fund created real employment with associated benefits and not job opportunities as was the case with the EPWP. “It is very expensive to create a new job in the economy,” Ms Allie-Edries said.

The Jobs Fund was established in 2011 to co-finance public and private sector projects with the potential to contribute to sustainable job creation. The funds are allocated via a competitive process of calling for proposals.

The funding the state provides has to be matched by project finance. There have been four calls for proposals so far with the fifth one, earmarked for the agricultural sector, closing last month.

An amount of R600m has been set aside for this round that has attracted 211 applications, 88 of which were eligible and are being evaluated by an independent investment committee.

Ms Allie-Edries said the aim was to provide innovative support packages to smallholder farmers to improve their access to markets and integrate them into the value chains at scale. Since 2011 89 projects have been approved out of the more than 4,000 proposals. Of these, 79 received grants of R1.9bn and are in full implementation.

Ms Allie-Edries said the Jobs Fund had committed R4.7bn so far with R2.3bn being leveraged from project partners. In addition to the planned contributions for committed projects, the total funds leveraged amount to R6.8bn.

“Projects have created 37,239 new permanent jobs, placed 19,949 people in vacant jobs, created 11,092 short-term jobs while 86,301 individuals have received training,” Ms Allie-Edries said.

The permanent jobs created are more than the target of 36,981 and the training target has also been exceeded. Of the new permanent jobs created 30,343 were in the NGOs, 6,604 in the private sector and 292 in the public sector. – BDLive