Unemployment, a ticking time bomb
Youth unemployment must be prioritised by President Cyril Ramaphosa to dispel the sense of disillusionment in South Africa’s current political landscape.
Ahead of his delivery of the State of the Nation Address (SONA) speech in June, President Cyril Ramaphosa held a pre-SONA youth dialogue in Cape Town at the Imbizo Media Centre and invited young people to share the current challenges they face in the country.
The 200 in attendance encouraged Ramaphosa to address unemployment, including the lack of job opportunities for disabled youth and the prevalent discrimination at the Department of Home Affairs offices against members of the LGBTQI+ who seek to get married.
Despite the pre-SONA dialogue, one could question how effective the youth dialogue was for the president in fully grasping South African youth issues. During his speech Ramaphosa emphasised unemployment and education, acknowledging the high unemployment rate and deeming it a “crisis”. A term that, in this context, cannot be overemphasized.
The youth unemployment rate in the country increased to 55,20% in the first quarter of 2019 from 54,70% in the fourth quarter of 2018. This means half of South Africans aged between 15 and 24 are unemployed.
Ramaphosa attributed this economic crisis to the influx of youth to the labour force each year. He stated that as part of his ‘five fundamental goals’ for the next 10 years, progress will be made to tackle unemployment, poverty and inequality by creating employment for two million young people.
According to the Stats Stats SA’s Quarterly Labour Force Survey that was released last month, the number of young people who are not working continues to rise. The president specified that the plan is to make jobs available in sectors where the demand for employment is growing. These are sectors such as “global business processing services, agricultural value chains, technical installation, repair and maintenance and the new opportunities provided through the digital economy.”
But are government interventions too little too late?
In a recent opinion piece in the Business Report, co-chairperson of Global Entrepreneurship Network Kizito Okechukwu said there are a few steps the government can take to ease the burden of unemployment. One of them is to advance an open economy by reducing bureaucracy, empowering start-ups and small to medium enterprises, as well as using data to better understand the market for new entrants.
Business Maverick journalist, Sasha Planting wrote recently that Youth Employment Service is providing countless opportunities to youth. The Youth Employment Service is a business-driven initiative with government and labour that “aims to build economic pathways for black youth and reduce unemployment. Their salaries are paid by Nedbank, which is one of 281 firms that supports the Youth Employment Service,” writes Planting.
Nedbank is providing work experiences to over 3,000 young people, 300 of them directly with the financial services group and the remainder through partnerships with other corporates and non-profits including the WildTrust. It co-ordinates the highest impact employment programme outside of government, with more than 13,504 youth employed thus far.
Another programme making a difference is the National Youth Service Programme (NYSP), a government initiative designed to engage with and help South African youth to gain occupational skills. The programme is set to assist 50 000 young people each year. Ramaphosa said that the programmes will be expanded so that it allows young people to gain paid workplace experience and work-based internships through initiatives such as the Youth Employment Service.
It seems not all hope is lost, but much more needs to be done and it needs to be done fast.
Entrepreneurship is one of the solutions to the persistent unemployment problem with thought leaders stressing that South Africa needs to create more job creators as opposed to job seekers. 702’s Joanne Joseph recently hosted a conversation with key thought-leaders focusing on the evolution of entrepreneurship to enable job creation.
Entrepreneur Zuko Tisani, founder of Legazy Technology Conferencing said local tech entrepreneurs should be creating solutions for our unique ecosystem rather than focusing on global trends. “There are world trends, but that’s a mistake that we make. We have a unique ecosystem in South Africa and entrepreneurs need to focus on those key elements and problem solve for that… instead of them trying to mimick Facebook or Uber,” said Tisani.
Thulile Khanyile, co-founder and chief operations officer of Nka’Thuto Education Propeller agrees that local solutions to local problems is essential. She teaches children about entrepreneurship and her company advances innovation, science and creativity in disadvantaged communities. “I say to children look into your community and tell me what problems there are, this is the methodology tool you’re going to use…We say to them now that you have created a solution, how do you then create a business model around it? What is the user case here? Who is going to buy it? How are you going to sell it to them? How are you going to reach them? How are you going to package this thing that you say you are going to sell to people?”
Entrepreneurs are essential to the South African economy, the amount that the informal sector contributes to the economy is proof of this. But it’s essential that entrepreneurs are able to grow in an entrepreneur friendly environment. Adcorp economist Loane Sharp estimates South Africa’s informal economy sits at 18% of GDP, making us on a par with Spain, Italy and Greece in terms of the informal economy’s contribution to total GDP. Furthermore, according to the latest Global Entrepreneurship Monitor, small and medium enterprises in South Africa contribute 36% to GDP. Both these figures could grow if the environment makes it easier for people to become job creators.
Youth unemployment must be prioritised by President Cyril Ramaphosa to dispel the sense of disillusionment in South Africa’s current political landscape. But it’s clear that government needs to work together with other stakeholders to solve the problem of unemployment.