R42bn in four years to create jobs for young people; how their wages affect the economy

In October 2020 the South African government launched a collection of public employment programmes, initially intended as a response to the Covid-19 pandemic. The initiative, called the Presidential Employment Stimulus, has been extended since then. The total budget allocation to March 2024 was R42 billion (US$2.1 billion).

By December 2023 it had directly created 1.8 million jobs and livelihood opportunities. These have been mostly temporary jobs in public employment programmes such as school education assistants. It has also included financial support to various sectors.

Read/listen: Presidential Employment Stimulus has delivered 1.2 million jobs [Jun 2023]

An important question is how much the programme’s spending stimulates economic activity in local communities and nationally. That is, to what extent it supports job creation or higher incomes outside the programme.

South Africa has an exceptionally high unemployment rate (32% or 41%, depending on the definition), particularly concentrated among the youth. Economic growth has been stagnant for the last 15 years, and increasing pressure has been placed on the national budget. While the core objective of a public employment programme is to provide direct employment and improve service provision, in this context it is also important to understand how it might stimulate economic activity.

Basic Education Employment Initiative