The forgotten jobs boom: How SA created 500K jobs a year – and how to do it again

South Africa stands at a crossroads. Unemployment, particularly among the youth, remains our single most pressing economic and social crisis. Yet, there was a period in our democratic history not long ago, when South Africa proved that large-scale job creation was possible. 

Between 2004 and 2010 a remarkable achievement was recorded: South Africa created close to 500 000 jobs annually for six consecutive years, under and following the so-called Mbeki Era — a moment when economic conditions, government policy, and business confidence aligned to produce employment growth not seen before or since.

The question that must preoccupy us now is this: what can we learn from that period to unlock mass job creation today?

The ingredients of the 500 000-Jobs-Per-Year Era: 

Economic Tailwinds and Policy Stability: The mid-2000s were marked by robust global growth, fuelled by the commodity super-cycle. South Africa, as a major exporter of minerals, benefited from soaring demand from China and India. But crucially, macroeconomic stability — low inflation, prudent fiscal management, and a growing infrastructure spend — created a platform for investment. Policy certainty and a perception of steady leadership built business confidence.

Massive Infrastructure Investment: The government’s Accelerated and Shared Growth Initiative (AsgiSA) and preparations for the 2010 FIFA World Cup injected billions into construction, transport, energy, and stadiums. This did not just create short-term construction jobs but also left behind roads, airports, and ICT infrastructure that continued to support economic activity.

Expansion of Services and Retail: The rise of a black middle class, supported by Black Economic Empowerment (BEE) and rising disposable incomes, boosted retail, finance, and services. Retail chains expanded aggressively, banks opened branches, and mobile operators employed thousands to meet demand. Service-sector jobs proved a powerful counterweight to manufacturing decline.

Public Sector Hiring: The state itself played an active role in absorbing labour, especially in health, policing, and education. While not all of these jobs were sustainable, they cushioned social pressures and gave many young people an entry point into the workforce.

Partnerships Between Business and Government: There was an unspoken social compact during this period. Business invested with confidence, and government pursued redistributive policies without being overtly hostile to capital. This uneasy but functional partnership held long enough to drive growth.

Why It Did Not Last

By 2011, domestic policy uncertainty brought the momentum to a halt. Mining strikes, electricity shortages, and a loss of confidence in governance eroded investor trust. The public sector wage bill ballooned, but productivity gains did not follow. Infrastructure plans slowed down, and corruption scandals dampened the optimism that had driven earlier expansion.

The lesson here is stark: job creation at scale cannot be sustained without structural reforms, continuous investment in infrastructure, and a transparent, trusted state.

Lessons for South Africa Today

Macroeconomic Stability is Non-Negotiable: Inflation, fiscal discipline, and debt management matter not only to ratings agencies but to ordinary South Africans. Stability builds confidence; confidence drives investment; investment creates jobs. Today’s rising debt-to-GDP ratio and anaemic growth need urgent attention through credible fiscal consolidation and growth-oriented reforms.

Infrastructure is the Job Multiplier: Every R1 billion spent on infrastructure can generate thousands of jobs directly in construction and indirectly in supply chains. The success of the 2010 World Cup build-up shows that targeted, time-bound infrastructure projects can mobilise both public and private sectors. South Africa must accelerate renewable energy, logistics corridors, and digital infrastructure to repeat that success.

Harness the Services Sector for Youth Employment: Retail, financial services, and digital platforms remain the fastest absorbers of youth labour. With the right incentives, call centres, e-commerce hubs, fintech, and tourism could employ hundreds of thousands. South Africa’s location and English-speaking youth give it a global advantage in business process outsourcing — but we are under-leveraging this opportunity.

A New Social Compact with Business: Just as in the Mbeki era, business must feel confident that investing in South Africa will be met with predictable policy, protection of property rights, and efficiency in regulation. Government must provide clarity on issues such as energy policy, labour laws, and trade facilitation. In return, business should commit to localisation, supplier development, and inclusive hiring.

Education-to-Employment Pathways: The earlier jobs boom still left too many young people out because skills mismatches persisted. Today we need to double down on technical and vocational education, short-term digital upskilling, and partnerships between corporates and TVET colleges. An economy can only grow jobs if its people are equipped to take them.

The Future of Jobs Summit: A Call to Action

If there is one lesson from the Mbeki Era, it is this: South Africa creates jobs at scale when government, business, and labour pull in the same direction. The challenge now is how to rebuild that spirit of alignment in an era of distrust and division.

This is precisely why the 2025 Future of Jobs Summit™ has been convened for the 7 November this year, coinciding with and aligned to the G20 Plenary Summit. It is more than a conference — it is a platform for building the coalitions South Africa urgently needs. The Summit will bring together CEOs, entrepreneurs, government leaders, and civil society to co-create solutions in the industries with the highest potential for job absorption: green energy, digital services, tourism, agriculture, and advanced manufacturing.

The Summit is designed to go beyond discussion. It will launch The Trailblazers of Tomorrow Awards to showcase business leaders creating jobs now; it will build an Employment Playbook for scaling proven solutions; and it will forge new public–private growth compacts to accelerate hiring.

In short, it will revive the very principles that enabled the 500,000-jobs-a-year boom — and adapt them to today’s context. If we commit to learning from history, aligning around a national employment plan, and giving business the confidence to invest boldly, then creating 500,000 jobs a year is not just a story of the past.

It could be the story of our future.

Dr Nik Eberl is the Founder & Executive Chair: The Future of Jobs Summit™ (Official T20 Side Event) and author: Nation of Champions: How South Africa won the World Cup of Destination Branding

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

BUSINESS REPORT