National plan needed to address youth unemployment?

The importance of youth economic inclusion, and unpackaging key solutions to drive it

How greater economic inclusion and youth empowerment are key to building social cohesion in South Africa was discussed in a webinar held in partnership between Coca-Cola Beverages Africa (CCBSA) and the Mail & Guardian. The key takeaway was that although many organisations are working towards these goals, they should be working together, in a more coordinated way, to become truly effective. 

Other issues that came up were: 

• young people often can’t get to places where they can possibly find work, so helping them with transport fees is effective;
• training potential entrepreneurs when they are young is optimal;
• using social media for information on establishing businesses is where the youth are most likely to find it; and
• establishing the real needs of communities is far better than assuming that they all require the same form of help.

Moderator Thembekile Mrototo opened proceedings by reflecting that there is drastic unemployment in South Africa. More than eight million people who could be working are not. Among the youth, unemployment is around 59%; many have also, in despair, given up on looking for work altogether. 

The roles of the organisations

Mrototo directed his first question at Tsholofelo Mqhayi, Head of Social Transformation at CCBSA, asking her what the company is doing in terms of economic inclusion for young people? 

Mqhayi said that the main objectives of the company are twofold: how to refresh the country, and how to make it a better place for all. The latter entails enabling employability and entrepreneurship, as part of building economic inclusion. 

Mqhayi pointed to CCBSA’s Bizniz in a Box initiative, which the company launched in 2016 with a view to create a platform to support emerging and small businesses, particularly those run by youth and women, and especially in informal and rural areas. 

Bizniz in a Box aims to create an ecosystem of viable micro-businesses offering complementary products and services in a community, using a spaza shop as the anchor. Each business operates out of a custom-designed container and helps cover the various needs of the local community, including a business centre/internet café, a car wash, a fast-food shop, or a mini baker. To date, the BiB initiative has supported over 800 entrepreneurs across a number of provinces.

She added that the initiative was an example of cooperation between the private sector and state entities such as the National Youth Development Agency (NYDA). 

“Education is also extremely important, so we also support learners who are going to university, and help them to gain employment after graduation,” said Mqhayi. 

Walter Bango, Senior Manager of Monitoring and Evaluation at the NYDA, said that the agency helps young entrepreneurs not only with seed funding, but also supports fledgling businesses in their early stages, through mentorship and linkages. In addition, the NYDA supports youth who cannot access NSFAS funding, and helps them to attend TVET Colleges. 

“The SETAs [Sector Education and Training Authorities] are in partnership with NYDA, as well as various companies such as CCBSA.” 

Cleola Kunene, Head of SME Development at the JSE, said that it provides platforms to develop enterprises, but also creates partnerships to foster engagement between them and young entrepreneurs. The JSE has several initiatives, such as the Investment Challenge, a key confidence builder for those who want to learn how the market works, available at all schools and institutions in South Africa, which have been running for more than 50 years. 

“We also have an SME development opportunity initiative for medium-sized companies, as well as a Funding Readiness Programme, which helps SMEs with training on how to access funding.”

She added that it was beneficial to assist and support entrepreneurs when they are still young.

Sipho Claassen, Managing Director of Boundless Consulting, said he has seen the power of private-public partnerships in action through various programmes they are involved in. His company provides funding to young entrepreneurs, which is far better than them going to loan sharks. “The youth are hungry to participate, and they need the correct information and support to help them do so.” 

Mqhayi said it is often a challenge for young people looking for jobs to get to places where they can apply or attend interviews. As a result, CCBSA partners up with NPOs in “host” communities — the communities the company has operations in — to help young people gain access to the jobs and information that they need. 

She stressed that it is important to do “social mapping” so that one knows the true needs in each community, in order to walk the journey with them, as one size does not fit all. 

Kunene agreed and added that collaboration and on-the-ground engagements are essential. This is particularly important when it comes to “filling the gaps”, particularly for funding. The JSE convenes an ecosystem of funders, and takes them to the organisations in the provinces where people require funding. The JSE has learned that it makes the most sense to invest in creating jobs in industries that are essential and required most to grow the economy. 

Bango said the NYDA funds thousands of young people with sizable grants, which don’t have to be paid back. These are meant to start businesses that range from ICT to car-washes. The NYDA partners with government and provincial departments to fund such initiatives. He added that the organisation also encourages young people to participate in volunteer programmes, which pays them a stipend, to enable them to gain work experience. The organisation has decentralised its offices to ease the process of accessing information and training needs. It has also made a lot of information accessible online, and on social media.

‘Stop working in silos’

Claassen said that many organisations working in the field of empowering youth have the same objectives, but they are all working in silos, instead of pooling resources together to achieve a lot more. 

He said it was important to support young entrepreneurs through the journey as funding alone is not sufficient. He cited the example of one start-up that received R8 million in funding and still failed three years later, because of a lack of mentorship. “Funding can easily be squandered where there is no proper guidance.” 

Kunene concurred, and said that in India there’s been a lot of success stories with start-ups, because of the philosophy of helping them at all stages, not just getting them started. “A national plan may be advantageous, where each organisation brings different resources to the table. Each organisation will play a specific role they can liaise on what outcomes they are aiming to achieve.”

Mqhayi gave the example of a beneficiary who started as a waste collector, and following CCBSA’s collaboration with other organisations, supported him to establish two waste collection centres where he does separation at source, and provides employment for young people. 

She added: “Bizniz in a Box has seen a high success rate, as we actually walk the journey with start-up businesses.”

Noting some of the challenges, Claassen highlighted the importance of understanding that government can’t solve the unemployment problem on its own, and that corporates must come on board, particularly in remote rural areas. 

Diversity and inclusion

Speaking about CCBSA’s approach, Mqhayi said the company has specifically targeted people living with disabilities, women and youth, and that it does a lot of work to support development in rural areas.   

Bango said: “The NYDA is targeting people with disabilities, women and the youth, especially when it comes to percentages of these groups in tenders. We have also been lobbying the Development Bank of South Africa, Treasury and the government to remove experience as a prerequisite for job applications, because how can you expect youth who have just matriculated to have years of experience? We also support initiatives like giving young people vouchers to travel on buses so they can access opportunities.” 

Kunene reflected that economic inclusion is difficult when there are areas that still don’t have access to power or the internet, which are key for any development to occur. 

Closing remarks 

In conclusion Mrototo observed that recent research shows that young black women are still struggling to find employment more than young black men.

Kunene said: “Partnerships are essential, but we must also be more outcomes focused to get results, and actually give young people real hope.”

Mqhayi added some words of encouragement: “Popcorn kernels don’t all pop at the same time; for those young people who are committed to their craft and businesses: keep at it, your time will come!”