Government’s EPWPs need a new focus

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Thabiso Modise
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Thabiso Modise is Deputy Director, Economic Opportunities Liaison in the Department of Social Development. He writes in his personal capacity.

Covid-19 has exacerbated unemployment levels, particularly for youth, to their highest levels ever says Thabiso Modise. Existing government programmes like the Expanded Public Works Programme (EPWP) could be more effective if they learnt from international experience.

Background

The unemployment rate of 34.4% for the second quarter of 2021 is the highest since the start of the Quarterly Labour Force Survey (QLFS) in 2008. Using the expanded definition of unemployment (those who have given up looking for a job), Statistics SA found the unemployment rate to be 44.4% with the highest unemployment being experienced by Africans (38.2%) and youth between the ages of 15-24 (64.4%).

Moreover, there are segments of young people who have been discouraged from looking for employment or any form of skills development. There is even a special name for them: Not in Employment, Education and Training (NEET). The NEET rate in South Africa for the 15 to 34 age cohort in the second quarter for 2021 is 44.2% (Stats SA, 2021). These groups of vulnerable people have been stuck in poverty for years and have been economically excluded.

Until the onset of Covid-19, there was no social protection for unemployed persons aged between 18-59. In response to the havoc wreaked by Covid-19, government introduced a special Social Relief of Distress (SRD) grant of R350 from May 2020 for six months. It targeted the unemployed who were not receiving any form of income support from government. It was extended until the end of April 2021, after pressure from civil society and other interest groups and reinstated in August 2021 until March 2022 after incidents of unrest in several parts of Kwazulu Natal and Gauteng in July 2021 and the ongoing negative impact of Covid-19.

These relief measures given to the unemployed are temporary. They will cease to exist in due course. There is a need to analyse existing government programmes that provide job opportunities for the unemployed.

Expanded Public Work Programmes (EPWPs)

The Expanded Public Works Programme (EPWP) is a government programme that provides job opportunities for the unemployed. It works in different sectors namely: infrastructure, environment, culture and social.

EPWP programmes and areas of work:

SectorArea of workSupervising department/entity
Infrastructure  Maintenance or construction of state-funded projects e.g. roads and other related infrastructureCOGTA, Mineral Resource and Energy, Transport and Water Affairs at provincial and local level
EnvironmentSustainable Land-based Livelihoods, Waste Management, Tourism and Creative Industries, Parks and Beautification, Coastal Management, Sustainable Energy and Working on Fire.Forestry, Fisheries & The Environment (Overall lead), Agriculture, Land Reform and Rural Development, Sport, Arts, Culture and Recreation, Tourism, Water Affairs and Sanitation, Mineral Resources and Energy and provincial and local level.
Culture and socialCommunity policing and patrolling, Early Childhood Development (ECD), Gender based Violence and Social Crime Prevention, Home-Based Care, Teacher Assistants and National School Nutrition programmes, creative industries, arts and craft, baking and confectionery, sports and recreation.Social Development is the overall lead assisted by Basic Education and Health.
Non-state sectorWage subsidies are used to implement Community Works Programmes (CWPs) and given to non-profit organisations (NPOs) to administer in the areas of agriculture, arts and crafts, baking and confectionery etc.COGTA

EPWP workers are employed on contract; when the contract finishes most beneficiaries go back to being unemployed (pic – Seriti)

The EPWP is contract work linked with the duration of projects. The beneficiaries are paid a minimum wage of R92.31 a day across all sectors, adjusted annually in line with the inflation rate. Contracts are renewed on a yearly basis. When a project ends, the beneficiaries are back to being unemployed (Maphanga & Mazenda, 2019). The skills development component is supposed to be a key EPWP feature but that seems largely ignored.

Learning from international Experience

The Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS) (also referred to as EGS) is an Indian job creation programme introduced in 2006. The EGS provides 100 days of manual work on publicly-funded projects (e.g. rural infrastructure such as irrigation canals and roads) to mostly rural households in India annually.

The EGS targets those who are willing to do manual work, irrespective of gender, and have low prospects of getting employment opportunities, due to their low skills level. There is no current data on targeted age groups. India is an interesting case because it is the only country that has implemented the EGS in the world.

In the 2020/21 financial year, 111 million work seekers benefited from the programme according to the Indian National Treasury with 65 million work seekers benefiting from the programme in the current financial year 2021-2022 with a budget of R146 million.

The intention of the EGS is to strengthen the livelihoods of those who reside in rural areas at the same time creating productive assets in agriculture and infrastructure. This is regarded as a skills development component because communities are expected to be able to sustain themselves through what they learned. The average minimum wage per day is R58 depending on the area.

Other countries in the European region, (Finland and Sweden in this case) are known as the pioneers of active labour market policies. These Nordic countries are social democratic states that provide universal welfare coverage to citizens. This means that public employment programmes and other related services are designed to serve all the residents in those countries (Bjørn Hallstein Holte, Ignatius Swart & Heikki Hiilamo, 2019). Since the welfare state is funded by taxpayers, the whole working age population in those countries is expected to contribute through their participation in education, employment and training (Bjørn et al., 2019).

With regards to Finland, the current Youth Guarantee Scheme (YGS) was first introduced in 2013. According to the European Commission (EC), in 2014, the Finnish youth unemployment rate was 20%; five years later it had dropped to 17%. Similarly it found that at the launch of the YGS, the NEET rate was at 10% but by 2019 this had decreased to 8.2%. So far 66.5% of the Finnish NEET have benefited from this programme with the Finnish government having spent just more than R2 bn to date.

The YGS consists of various elements: a guarantee of employment, educational guarantee, a young adults’ skills programme, a youth workshop and outreach youth work. The YGS is a partnership between the public and private sector. In this case the partnerships seek to promote the inclusion of young people in education, training and employment.

The youth are also responsible for improving the programme in terms of what needs to be included, which services are important and how they can be measured. The private sector is compensated for offering apprenticeships to those who have only completed basic education.

Coming to Sweden, the same EC report noted that the current YGS was implemented in 2013 and revised in 2014. It is regarded as one of the most advanced YGS in Europe. During the launch of the YGS in 2013, the youth unemployment rate was at 23.5%; by 2019 the figure had dropped to 20.1%. With regards to the NEET, the rate was 7.5% in 2013 with the figure declining to 5.5% in 2019 with 44.1% of the NEET having benefited from the YGS at a cost to the Swedish government of just more than R775 m.

The Swedish YGS provides a similar holistic approach to the work seeker as Finland. However the focus is area specific and responds to the local needs of employers. The public and private partnerships happen locally and employers are incentivised to give apprenticeships to school leavers. The focus is more on skills development and on the job training for the 18 to 24 year olds.

Looking at Finland and Sweden cases above, this further supports the argument that the YGS is more effective for those who have never worked before, compared to those who have been disconnected from the labour market who may not be interested in the whole process of profiling but rather want to be placed in jobs.

Improving interventions

Existing government policies in South Africa have not produced the desired outcomes where the focus seems to have been more on the number of work opportunities created rather than the quality of those work opportunities. Moreover, once the beneficiaries exit these programmes, they are currently not being monitored to track the impact of those programmes on them.

The South African government should learn from the international examples of the EGS and YGS implemented in India, Finland and Sweden by:

  • Introducing a case management approach that will profile all beneficiaries and link all programmes mandated with creating economic opportunities in South Africa. This will make it easier for government not only to track beneficiaries’ progress until they graduate and find employment but also to judge if the programmes are having the desired impact. It will also prevent duplications.
  • Ensuring that there is a strong governance structure in place so EGS can be successfully integrated into the EPWP. The governance framework will mitigate corruption and other fraud-related risks that might prevent the programme from achieving the desired outcomes.
  • Leveraging the existing programmes that target vulnerable groups. For instance the EPWP can be up-scaled using lessons learned from India’s EGS, the Swedish and Finnish YGS. The EGS should focus on the rural areas and the YGS on the NEET. Good practices on skills development in the YGS will ensure the EPWP has more impact on the youth.

It should also improve its programmes by:

  • Creating partnerships between the private sector, small businesses and Non-Governmental Organisations (NGOs) to create economic opportunities in communities that can be linked into existing value chains. This will include NGOs that work in agriculture and other sectors, international agencies and the corporate social responsibility component in the private sector. Their experience in communities can inform policy.
  • Evaluating the current EPWP framework so that new strategies can be developed post Covid-19. For example, linking the beneficiaries of the SRD Covid-19 grant with other related policies mandated with job creation.
  • Ensuring that food parcels form part of the social assistance roll-out programmes for those who do not qualify for any form of income support.

It’s time for us to learn from other countries like India and the Nordic countries who once faced similar challenges. EPWP should focus more on skills development through an integrated approach, rather than on the number of work opportunities created. The benefits of skills development are long term and will go a long way in tackling unemployment in this country.

Further reading:

  1. Bjørn Hallstein Holte, Ignatius Swart & Heikki Hiilamo (2019). The NEET concept in comparative youth research: the Nordic countries and South Africa, Journal of Youth Studies22:2, 256-272.
  2. European Commission. (2020). Youth Guarantee Country by Country.
  3. Maphanga M & Mazenda A. (2019) The Effectiveness of the Expanded Public Works Programme as a Poverty Alleviation Strategy. Administratio Publica, 27:3.
  4. Statistics South Africa. (2021). Quarterly Labour Force Survey, Quarter 2, 2021.
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