Goldman Sachs Sees South Africa Jobs Program Starting in January

JOHANNESBURG(Capital Markets in Africa) – A South African program to put 1 million young people into paid internships is due to start in January as the country grapples with unemployment at a 14-year high, according to Goldman Sachs Group Inc.

The initiative, led by the New York-based lender and Investec, will run for three years and offers participating companies tax incentives and other benefits for employing black people, said Colin Coleman, Johannesburg-based partner and head of Goldman Sachs in sub-Saharan Africa. There will be announcements by next month that will detail the results of talks between the government and business and labor groups on the Youth Unemployment Services Program, he said.

While the program initially aimed to put 330,000 people into internships each year, the first year’s intake will be less than that because of South Africa’s sluggish economic growth, Coleman said. At least 32 percent of people between the age of 15 and 24 are without employment and are not in training or an education facility, according to Statistics South Africa data, the highest proportion of whom are black as the nation grapples to deal with the fallout of racial segregation rule caused by apartheid.

South Africa’s economy will expand 0.6 percent this year after emerging from a recession in the second quarter, according to central bank estimates. Business confidence is at its lowest level in more than three decades, while mergers and acquisition activity is 55 percent lower than a year ago, according to data compiled by Bloomberg. Sentiment was roiled after President Jacob Zuma fired his third finance minister in 16 months as part of a wider midnight purge of cabinet members at the end of March.

“The target is still 1 million over three years,” he said. “We’re going to have to ramp up into it. It’s a unique package. We think it’ll be compelling.”

Source: Bloomberg Business News