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INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
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UNCLAS SECTION 01 OF 03 PRETORIA 002328 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/S/MTABLER-STONE; AF/EPS; EB/IFD 
USDOC FOR 4510/ITA/MAC/AME/OA/JDIEMOND 
TREASURY FOR OAISA/JRALYEA/BCUSHMAN 
USTR FOR PCOLEMAN 
 
E.O. 12958: N/A 
TAGS: ECON EAID EINV PGOV SF
SUBJECT: SOUTH AFRICA: SKILLS, THE ESSENTIAL INGREDIENT 
 
REF: Pretoria 698 
 
¶1. (U) Summary.  In March, President Thabo Mbeki and 
Deputy President Phumzile Mlambo-Ngcuka announced the 
Joint Initiative on Priority Skills Acquisition (JIPSA) 
as an integral part of the Accelerated and Shared Growth 
Initiative for South Africa (ASGISA).  JIPSA is a attempt 
to rectify the growing concern within the private and 
public sectors that the country is simply not producing 
the skills it needs to grow and alleviate nearly 40% 
(broadly defined) mostly black South African 
unemployment.  Mlambo-Ngcuka is pursuing JIPSA as a stop 
gap measure, leaving "no stone unturned" in an effort to 
alleviate the skills shortage in the near term.  A long- 
term approach, however, would have to focus on increasing 
the number of teachers and the quality of education, as 
well as incentives to shift students toward science and 
technology.  USAID may have a role to play here.  End 
Summary. 
 
¶2. (U) In March, President Thabo Mbeki and Deputy 
President Mlambo-Ngcuka announced Joint Initiative on 
Priority Skills Acquisition (JIPSA), a multi-stakeholder 
working group through which the government, business, 
labor, academics and civil society will address the 
country's skills shortage, as part of the Accelerated and 
Shared Growth Initiative for South Africa (ASGISA) 
(reftel).  JIPSA is a clear attempt to rectify the 
growing concern within the private and public sectors 
that the country is simply not producing the skills that 
the country needs to grow.  Despite high unemployment, 
there is a dearth of South African workers with skills. 
Since the transition from apartheid, the country has lost 
engineers, scientists, doctors, nurses, university 
professors, teachers, and even welders to retirement and 
emigration during a time when these numbers should have 
grown.  Moreover, red tape and poor implementation has 
stalled the effort to "train up" the majority black 
African population. 
 
¶3. (U) The country's "lost generation," (those denied 
work opportunities during apartheid and subjected to poor 
quality Bantu education) has been asked to assume 
leadership in government, education, and the private 
sector, but are often ill equipped to do so.  Throughout 
government and society, the lost generation is losing the 
opportunity of a lifetime.  The economy is growing at 
between 4-5%, but needs people with skills to keep it 
going and to raise growth past the government's 6% 
target.  The situation has become so dire that top policy 
makers believe that economic growth and the medium term 
success of the nation may hang in the balance. 
 
¶4. (U) The generally accepted conclusion within 
government circles is that without skilled workers, the 
South African economy will not grow fast enough to 
alleviate the nearly 40% unemployment (using the broad 
definition of unemployment that includes persons who have 
not actively sought employment in the past four weeks) 
that exists in the country.  Most of these 40% are 
unskilled, blacks, but the majority of workers are also 
semi or unskilled and poorly educated.  Discouraged by 
decades of apartheid and "Bantu education," the majority 
of black South Africans have not completed high school. 
Today, roughly 60% of the South African workforce does 
not possess a high school degree -- 80% of them are 
black.  Ideally, the Government would want to match 
unemployed black workers with skilled job opportunities, 
but the educational and training system have not been 
producing the numbers. 
 
¶5. (U) Mlambo-Ngcuka realizes that structural 
unemployment is a medium- to long-term problem, but 
believes that something must be done in the near term. 
For this reason, she designed JIPSA to be a stop gap 
measure, leaving "no stone unturned" in the effort to 
alleviate the skills shortage in the near term.  Mlambo- 
Ngcuka has asked former public sector and parastatal 
employees to consider coming out of retirement to help 
with planning and construction of new power plants and 
local government management, among other critical tasks. 
Mlambo-Ngcuka also wants to lure former South Africans 
with needed skills back to South Africa through a "come 
back home" campaign.  In addition, the Government will 
 
PRETORIA 00002328  002 OF 003 
 
 
spend an extra R2 billion (approximately $300 million) on 
vocational training in the near term. 
 
¶6. (U) To provide much needed experience to young South 
African graduates, Mlambo-Ngcuka has asked foreign 
governments and the business community to pony up 
hundreds if not thousands of six to twelve-month 
internships in government and/or industry.  Her own 
office will manage the database of unemployed graduates. 
Priority areas are foreign languages, engineering, 
architecture, project management, information technology, 
tourism, public administration and municipal management, 
and finance. 
 
South Africa's Skills Profile 
----------------------------- 
 
¶7. (U) A South African Reserve Bank study entitled, "An 
Overview of Skills and Formal Employment Dynamics in 
2003" published in September 2005 issue of Labor Market 
Frontiers, confirmed what everybody already knew, i.e., 
the lopsided nature of the South African work force. 
Statistics reflect an abundance of low skilled labor 
alongside an acute shortage of highly skilled labor.  In 
2003, the percentage of workers with post graduate 
education in the manufacturing, engineering, and 
technology fields was only 2.5%.  Only 1.2% had post 
graduate education in the physical, mathematical, 
computer, and life sciences.  The majority of those with 
a post graduate education had a non-science background. 
Roughly 30% of those with graduate education studied 
education; 22% studied business. 
 
¶8. (U)  According to the South African Department of 
Labor (DOL), South African universities have been 
graduating too few students in science and technology and 
producing too few academics to train the next generation 
of South Africans.  The proportion of professors aged 55 
and above has been increasing while the proportion of 
academics aged 45-54 has not.  Just as striking is that 
the majority of graduate students are in the humanities, 
as opposed to engineering, science, and technology - 
skills that are in great demand.  Only 33% of master's 
degrees and 39% of doctoral degrees issued in South 
Africa between 1995 and 2002 were in the natural 
sciences.  Ominously, university graduates in engineering 
have actually declined since 1994.  DOL went one step 
further to identify the following list of scarce skills 
and occupations: business and project managers, 
engineers, financial specialists, researchers, 
entrepreneurs, technicians, electricians, plumbers, and 
public safety employees.  In short, South Africa is not 
producing the graduates that its labor market demands. 
 
¶9. (U) It may not be surprising, then, to see that South 
Africa compares unfavorably with other countries in 
global rankings.  In the latest World Economic Forum's 
Network Readiness Index, South Africa ranked in the lower 
third in the quality of math and science education 
(105th), engineers and scientists (90th), and education 
system (81st).  Recent Department of Education (DOE) 
figures revealed that although 58% of schools had 
computers, only 28% used them for teaching - despite the 
fact that DOE's new curriculum assumes that all pupils 
have access to computers. 
 
Has Migration Been a Factor? 
---------------------------- 
 
¶10. (U) A recent paper by Stern and Szalontai, 
"Immigration Policy in South Africa," calculated South 
African migration (by using South African and recipient 
country data).  Stern and Szalontai estimated that South 
Africa lost a net 6,900 skilled professionals per year 
between 1989 and 2002, with the loss worsening after 
¶1994.  On average, South Africa lost 2,300 skilled 
professionals per year from 1989 to 1993, rising to 9,300 
a year since 1994.  The largest net outflows were in 
engineering, medicine and the humanities (which includes 
lawyers and accountants).  Still, these figures seem 
relatively tame, given the generally accepted belief that 
a million former South Africans now live in places like 
Great Britain, Australia, Canada, and the United States. 
 
 
PRETORIA 00002328  003 OF 003 
 
 
¶11. (U) Before the transition from apartheid, South 
Africa attracted a larger number of skilled workers - 
mostly from Europe.  After apartheid, South Africa began 
attracting most of its skilled immigrants from other 
African countries, but in lesser numbers.  Moreover, 
emigration continues to be a problem.  In 2004, StatsSA 
estimated that professional emigrants accounted for 27% 
of total emigrants, while professional immigrants 
accounted for only 4.7% of total immigrants.  Stern and 
Szalontai report that 118,000 skilled professionals left 
South Africa between 1989 and 2003 - more than eight 
times the number of professional immigrants coming to 
South Africa. 
 
Bureaucracy Hinders Immigration 
------------------------------- 
 
¶12. (U) Foreign investors complain that the 2002 
Immigration Act, amended in 2004, has not helped the 
situation.  Immigration of skilled foreigners appears 
hamstrung by poor regulatory design and implementation. 
For example, the Act contains no definition or sector 
limits for what is termed "exceptional skilled 
foreigners," and this has hampered implementation.  In 
addition, investors argue that red tape, program 
monitoring, and a bureaucratic desire not to import 
workers have greatly slowed the issue of work permits. 
 
Comment 
------- 
 
¶13. (U) One of the unfortunate legacies of apartheid is a 
majority black population without the skills it needs to 
lead and build a new South Africa.  While workers lack 
skills to take advantage of opportunities in the new 
South Africa, recent graduates lack the experience to 
step into available mid-level positions.  In the short 
term, attracting skills from abroad and creating relevant 
training opportunities for black South Africans may help 
to alleviate the country's acute skills shortage. 
However, a long-term approach will have to focus on 
increasing the number of teachers and the quality of 
education, as well as providing students the incentive to 
enroll in science and technology academic programs. 
USAID may have a role to play here. 
 
TEITELBAUM