South African President Cyril Ramaphosa Warns Against Job Cuts Amid COVID-19

Ramaphosa emphasized on the need to provide opportunities for entrepreneurship and self-employment, particularly among the youth

Appealing to companies that are planning to cut jobs, South African President Cyril Ramaphosa on Monday urged them to balance the livelihoods of workers and the sustainability of businesses in spite of being affected by the economic crisis brought on by COVID-19.

He also emphasized on the need to provide opportunities for entrepreneurship and self-employment, particularly among the youth. During his weekly address, Ramaphosa said, "As much as we seek to protect current jobs, we also need to create new ones, and attract new, greater levels of investment."

Companies Announce Plans of Retrenchment

The president was speaking after a number of companies last week announced plans to retrench staff. From aviation to construction, from entertainment and leisure to hospitality, companies have indicated their intention to cut staff because of heavy losses incurred over the past three months. In some cases, businesses are closing permanently. Small businesses whose turnover has been wiped out will be even harder hit.

Cyril Ramaphosa
South African President Cyril Ramaphosa Wikimedia Commons

"As a country, we have all been keenly aware of the consequences of shutting down economic activity during the lockdown that was absolutely critical to save the lives of our people," Ramaphosa said. A "job loss tsunami" has taken place around the world, and South Africa is no exception, he said.

Difficult Days And Decisions Lie Ahead: Ramaphosa

In April, the International Labour Organization had forecast that there would be around 305 million job losses worldwide. The situation of workers in the informal economy is even worse, with an estimated 1.6 billion workers in danger of losing their livelihoods. For South Africa, which was already facing an unemployment crisis and weak economic growth, difficult decisions and difficult days lie ahead, Ramaphosa warned.

"We would urge that the difficult decisions to be taken are taken with care and with due regard to balancing the sustainability of companies and the livelihoods of workers," he said. It is important that whatever is done is underpinned by ensuring a just transition to all concerned, Ramaphosa said.

The government has taken measures to protect local businesses during the lockdown in the form of loans, tax relief, debt restructuring, extended credit lines, and retail rental exemptions are continuing to provide vital support, he said. Temporary social assistance to poor households is gathering pace and providing vital relief, Ramaphosa said.

(With inputs from agencies)