SA firms ask for overhaul of $7bn jobless fund

South African businesses and labour unions have asked the government to overhaul the nation’s $7 billion Unemployment Insurance Fund after the agency failed to pay thousands of claimants.

Read/listen: Busa calls for UIF to be placed under administration

The UIF has yet to pay about 87 000 people after they were temporarily laid-off, according to Sanelisiwe Jantjies, acting director at Business Leadership South Africa, one of the nation’s biggest business associations. The number of jobless individuals applying to access the funds have been rising daily, she said.

Paramount among the host of problems at the UIF are “administrative issues, which are internal and deep-rooted systemic issues,” said Jantjies. “So far, we have found that the efforts to modernise the UIF have either been contrary to its mandate or just taking us 10 steps back.”

Read: Place UIF under administration – Busa

South Africa hasn’t been able to generate enough jobs as rolling blackouts and logistical bottlenecks hold back economic growth. A gauge measuring manufacturing sentiment in the nation fell to the lowest level in more than two years in September because of weaker demand and constrained production.

Read: The struggle to claim from the UIF continues

Finance Minister Enoch Godongwana is expected to warn of a widening budget deficit and declining revenues when he presents a review of South Africa’s fiscal position on November 1.

Read/listen: UIF: 115 Ters fraud cases still under investigation

BLSA has written to the Labour Minister Thulas Nxesi to intervene. The body has asked that the fund be placed under administration.

The labour department didn’t respond to an email seeking comment.