Addressing Unemployment Through the Jobs Fund in South Africa

Despite periods of strong economic growth over the last decade, South Africa s level of unemployment remains high The official unemployment rate taken from the Labour Force Survey Q1 2015/16 sits at 26.4% Roughly one in four South Africans in the labour force is unemployed If discouraged workers are included (those who have given up searching for employment) the unemployment rate rises to approximately 34%

To address the challenge of unemployment sustainably, South Africa requires (amongst other things) high rates of sustained economic growth The macro-economic policy environment, infrastructure asset base, schooling system and regulatory frameworks are all key determinants of the growth path The Jobs Fund is not intended to tackle these long-term, structural causes of low growth and unemployment Many other government initiatives are directed at these challenges Rather, the Jobs Fund is an opportunity to complement these efforts with a limited and targeted programme of support for effective labour market interventions that promise job creation in the short to medium term

The primary mandate of the Jobs Fund is to support initiatives that pilot innovative approaches to employment creation To create 150 000 new jobs To learn from these innovative models and build a knowledge base that can be used to contribute toward evidenced based policy making The impact it seeks, is to contribute toward achieving positive systemic impact on poverty reduction, through the catalytic projects the Fund supports

R9 billion fund administered by the National Treasury - GTAC Launched in June 2011, completed 5 calls for proposals Operates on challenge fund principles allocation process is: Competitive Transparent Co-finance innovative public and private sector projects with the potential to contribute significantly to sustainable job creation Jobs Fund Partners share risk and costs by matching the Jobs Fund allocation: Emphasis on partnership and collaboration Overcome barriers related to: cost, technology and infrastructure Create 150,000 sustainable jobs (over the project portfolio implementation period) Focus on projects that benefit women and youth

Challenge Fund Principles - open, transparent and competitive allocation of funding Open Transparent Competitive Public sector entities, local authorities, NGOs and business can apply Leveraging private sector capacity to achieve public sector goals Clear application and assessment processes Clearly communicated criteria Independent investment committee Applications compete against one another for funding Open, public calls for proposals targeted windows (Innovation) Matched Funding Funding Criteria are designed to maximise job creation i.t.o: - Innovation, Impact, Sustainability and Value for money Good practice project performance tracking, grant management, and Evaluation & learning

Cross-sectoral

Innovation is defined as a new product or process that either unlocks long term job creation, or removes barriers to job creation. The product or process does not have to be new in absolute terms, but must be new to a given society.

New product, process or commercially viable business model that either unlocks long term job creation, or overcomes barriers to job creation. The product or process does not have to be new in absolute terms, but must at least be new to a given society. This definition includes developments of adaptations of existing products, processes and business models for use in new applications or contexts. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need(in this case job creation). In summary, innovation is creating new value or capturing value in a new way which consequently leads to job creation.

Product/Service Introduces a new product or product improvement; or A change in what the product offers. Process Developing a new way of doing things; or Changes in the way in which products/services are created or delivered. Paradigm Changing the participants or direction of what is presently the dominant paradigm. i.e. community ownership vs. commercially driven. Market New or different structure / adding new participants Organisation New or different organisational structure New or different participants within an existing organisational structure/value chain

Stage of innovation: 1 - Initiate begins with identification of a problem define vision, strategic intent 2 - Ideate source ideas, brainstorming, seek inspiration 3 - Pilot - testing phase 4 - Operationalise when pilot is successfully implemented 5 - Optimise innovation can be improved 6 - Scale replicate

Competitive applications from development stage 4 (operationalisation) Limited funding may be made available for applications within development stage 3. Documentation must be available with reference to all the stages the initiative has concluded Clear timelines on how project will progress

Initiative must be well documented Designed for scale Be collaborative Designed for sustainability Designed with the user in mind Do no harm Re-use and Improve Source Rockefeller Foundation & UNDP

Allow for accurate recording and measurement of: Accounting /administration Milestones Key project indicators Evidence

No preconceptions for innovation a wide range of interventions to be supported Innovation can be manifested in: Products Services Funding model Business model Projects should achieve: Long-term, sustainable job creation Innovative, scalable models of job creation Skilled employees Reduced barriers to job creation

Minimum grant size of R10m and maximum of R100m Matched funding - 1:1 cash co-funding ratio Compliance with administrative requirements (tax clearance certificates and annual financial statements for two years) Applicants must be solvent, have been operating for more than two years (these criteria apply specifically to the lead applicant) Applicants or partners to have a track record of more than three years of technical experience in the area of interest

Innovation: Initiatives must comply with Jobs Fund definition of innovation Contribution to systemic change: Applications that facilitate long term, sustainable, systemic change to the labour market will be given preference. Potential for job creation: Initiatives should demonstrate clear ability to create and sustain new permanent jobs in the long run, either directly or indirectly Sustainability. Initiatives should be able to convincingly demonstrate a path to commercial sustainability beyond the term of the Jobs Fund grant.

Additionality: The Jobs Fund aims to support initiatives that would not have taken place without Jobs Fund support and risk sharing, because other funders consider the risk of failure too high or the projected financial return too low. Matched funding and value for money: The Jobs Fund aims to leverage existing resources available within the economy. The amount of matched funding provided within the proposed intervention will be a key assessment criteria. Capacity to implement: Applicants must demonstrate relevant experience, organisational capacity and key capabilities.

Private sector Non-governmental organisations Government departments Municipalities Cost and risk sharing required for: - Ownership - Impact - Sustainability Matched funding benchmarks to be met Applications that exceed minimum matched funding ratios may be considered more favourably

Bail out of distressed companies Start-up companies Initiatives/applicants with no proven track record Training activities not linked to job placement Initiatives with large capital investment but minimal job- creation potential Double dipping of funding, leading to double-counting of jobs or duplication of government initiatives

Await opening of the relevant call for proposals Access the online application form on the Jobs Fund website (www.jobsfund.org.za) Register on the site and create an application (online applications are open & editable until call for proposals closes) If a concept is approved, a full business case will be required Contracting takes place once the business case budget and monitoring plans are approved Once the contract is signed, an up-front portion of the grant value is disbursed; subsequent tranches are disbursed on a quarterly basis pending achievement of targets over the project lifespan The Jobs Fund website provides guidance

Select the Registration Link Submit the applicable information Email Confirmation sent to applicants email address provided

Click the green (+) to start your application (Home page) Complete Registration (Application Type, Business Sector, project name etc.) Being the application process Jobs Fund Learning

11 Nov 2015 Road show PPT 6

Validate the CN Application to check that all the mandatory fields have been completed GMS will return a validation report. When the validation report is blank, the CN Application will be complete and ready for submission.

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SURNAME TELEPHONE CELLPHONE EMAIL ADDRESS Sonja Loggenberg Rulleska Singh (012) 315 5349 060 965 1984 Sonja.Loggenberg@treasury.gov.za (012) 406 9040 082 402 4825 Rulleska.singh@treasury.gov.za Sean Scott (012) 406 9113 083 440 6723 Sean.scott@treasury.gov.za 081 400 2369 Pieter Botes (012) 315 5705 Pieter.Botes@treasury.gov.za