JOHANNESBURG: Margaret Magondo negotiates the busy streets of central Johannesburg with a drum of smouldering coals delicately balanced on a plank on her head as she makes her way to her trading spot.

The 57-year-old mother of five will spend the day with fellow single parent and friend Sarah Pahlele roasting peanuts which they sell for one rand ($0.149) a packet. During summer, they roast corn, with a cob selling for five rand.

“I have been doing this for the past eight years. There are no jobs. Life is really tough. On a good day we make 50 rand. Our biggest problem is harassment by the metro police,” said 37-year-old Pahlele who is raising four children.

A few blocks away, streetwise Jabu pushes a trolley packed with soft drinks and snacks, whistling and yelling to attract the attention of shoppers in the crowded city centre. He also says he cannot find a formal job.

Unemployment, officially estimated at 26.2 per cent, has forced an estimated 2.4 million people to eke out a living in the informal sector, also known as the second economy.

Pressure is mounting on the government to review labour legislation, seen by analysts and the International Monetary Fund as too rigid and responsible for hampering job creation and the economy’s capacity to attain higher growth rates.

“The need for labour market reform is especially pressing. Tackling high unemployment is difficult everywhere and South Africa is no exception,” said IMF First Deputy Managing Director Anne Krueger during a recent visit to the country.

“A review of labour legislation and regulations ... with the aim of increasing job creation, would help raise employment levels and the rate of economic growth.”

For the first time, the ruling African National Congress (ANC) party has acknowledged that some clauses in the labour laws could contribute to joblessness and has proposed adjustments which could lead to a dual labour market.

The issues of the second economy and unemployment will come up for discussion at the ANC’s five-day national general council meeting starting on Wednesday (June 29).

The party has drawn up a discussion document, which among other things proposes that South Africa considers some flexibility in labour legislation.

“Let’s go back to the drawing board and review the laws that have been put in place since 1995. We are not going to overhaul the law, but to adjust and throw away what is not necessary,” said Sankie Mthembi-Mahanyele, ANC deputy secretary-general.

“These laws have done some significant things for our society, but part of the unemployment level may be intensified by a clause that we included in the labour laws. The high cost of labour is starting to impact on some sectors of the economy.”

The ANC proposes the waiving of minimum wages and other collective bargaining arrangements and making it easier for employers to fire non-performing workers. It says this will help reduce the high rates of unemployment among young people.

Analysts agree, but argue that relaxing labour regulations will only work as a short-term solution and say there is a need for the government to improve the education system so that it produces people able to handle technically oriented jobs.

South Africa is battling to mend the damage inflicted by so-called “Bantu” apartheid-era education policies that served the black majority poorly.

Noting that services account for 64 per cent of GDP, a sea change from the resource-based economy of the past, Reserve Bank Governor Tito Mboweni has said “the skills required for (this) sector are much higher than was the case previously.—Reuters