If the government is serious about ending unemployment, it needs to deregulate the labour market. (File photo)
COMMENT
The coronavirus pandemic has once again exposed the rife corruption and disregard for governance, accountability and transparency by senior officials in South Africa. Corruption erodes the trust we have in the public sector to act in the best interest of the citizens. It also wastes the taxes that have been earmarked for crucial development projects for infrastructure, education, economic advancement and activities for the youth through education and entrepreneurship opportunities, as well as delivery of basic services for our local communities.
At the Financial Times Africa Summit in London in 2019, President Cyril Ramaphosa said corruption had cost South Africa as much as R1-trillion — a staggering amount of money that could have made a positive impact on the lives of millions of young people across the country.
The recent alleged irregularities and nepotism over the awarding of the Covid-19 personal protective equipment (PPE) procurement tenders are no different. The impact of corruption is felt way beyond the fiscus. These acts of criminality set undesirable precedents. It steals the aspirations of young people who want to venture into business, entrepreneurship or thought leadership, as corrupt people enriching their lives through flawed tender processes and other irregularities.
The World Bank reports that South Africa still lacks clear data about the extent and nature of corruption charges, as cases of corruption are usually hidden within the category of commercial crimes. It says an increase in cases pursued by the police could reduce the perception that perpetrators of corruption act with impunity.
South Africa faces challenges ranging from poverty, inequality, poor access to adequate education and few entrepreneurship opportunities. It is mind-boggling to have to deal with irregularities and improper awarding of tenders for self-enrichment in this context.
What will it take for the corruption and looting of the public purse to end? When South Africa is running dry of funds and there is nowhere else to turn?
This Youth Month, entrepreneurship opportunities remain hamstrung by red tape for budding entrepreneurs. Promises were again made to develop and grow young people, but little action is seen. Poverty remains a burning issue, and contributes to the cycle of high youth unemployment, inequality, and poor access to the entrepreneurship opportunities that could lead to better lives and economic emancipation.
With the coronavirus changing our lives and the economy of South Africa, a bleak future confronts young people. We must reflect on the lived experiences of many young citizens. Youth Month should not be the only time issues facing young people are addressed. But meaningful engagement and youth participation in policy design, coordination and implementation is crucial to tackle these challenges. The year 2020 may be one of catastrophe, but it may also be the time to push the reset button. Investment in young people must be emphasised.
Unemployment
The unemployment rate among young people aged 15-34 is 38.2%. More than one in every three young people in the labour force did not have a job in the first quarter of 2018.
Youth unemployment has been a national crisis for many years. Youth aged 15-24 years are the most vulnerable, with an unemployment rate of 55.2% in the first quarter of 2019. According to the International Monetary Fund, South Africa’s unemployment rate is forecast to be 35.3% in December 2020, up from the 28.7% in December 2019.
Asia and Africa have the highest populations of young people. About 62% of the world’s youth live in Asia. The second-largest population is in Africa.
South Africa is facing a national crisis that stems from the country’s other two enormous socio-economic challenges: poverty and inequality. Our history created vast economic inequality, leading to a cycle of increased poverty, lack of economic opportunities and poor access to proper education for many young people, especially in the communities. Although apartheid ended 26 years ago, recovery from systemic racial discrimination is a difficult and on-going process. While South Africa’s democratic legislature is undoubtedly progressive and efforts are being made to redress historical inequalities, there is still a long way to go.
Professor Vimal Ranchhod of the Southern Africa Labour and Development Research Unit at the University of Cape Town says if people are not willing to invest in a country, it is almost impossible to generate new jobs. With South Africa’s youth making up almost half of our population, the youth bear the brunt of unemployment.
In reality, there is a surplus of entry-level jobs at any given time, but not enough strategic resources dedicated to ensuring job longevity, according to entry-level employment recruiter Lulaway. So it is important to prioritise strategies and investment plans that will ensure sustainable youth employment. New policies for developing a fresh environment for investment and economic growth to accommodate young people need to be prioritised too. The youth unemployment question can only be solved when South Africa has a decent leadership corps in place and we, as citizens, learn to work together. The announcement by MultiChoice in partnership with Youth Employment Service to invest R50-billion in youth employment to create 400 jobs is what the public and private sectors working together should look like.
Access to entrepreneurship opportunities
The national treasury said South Africa’s GDP growth slowed from 1.3% in 2017 to an estimated 0.7% in 2018. This poor growth has meant that sufficient employment opportunities have not been created. Many young people have opted instead to try their hand at entrepreneurship.
Jacqui Kew, an associate professor at the College of Accounting at UCT, says that the formal and public sectors have not created enough employment, and as such focuses on the critical importance of promoting entrepreneurship, enterprising behaviour and an enterprise culture that supports aspirations of self-employment.
A common diagnostic has been that start-up finance is inadequate and should be supplemented. The National Youth Development Agency (NYDA) is a significant to aid youth entrepreneurship, but instead the agency has itself been accused of corruption, mismanagement of funds and maladministration. How can entrepreneurship among the youth thrive under these conditions?
As much as entrepreneurship amongst young people is emphasised, adding financial literacy and entrepreneurial training into the school system earlier is also crucial. Investing in mathematics, science and technology education that will help young entrepreneurs succeed is essential.
We must also invest in skills development that will enable young entrepreneurs to excel beyond the need to survive. Dr Sam Koma, a researcher at the Milpark Business School, says, “Development finance institutions such as the Industrial Development Corporation, Small Enterprise Finance Agency and commercial banks should start to design and package funding products specifically aimed at enabling the generation of young entrepreneurs who require funding to kick-start their businesses in manufacturing, telecommunication, financial services, retail, agriculture and mining. Young entrepreneurs should not be despondent by rejection of their ideas, business plans and failure.”
Entrepreneurship in the country impacts our economic growth, therefore, investing in the youth and heeding the call to entrepreneurship for the creation of jobs and inclusive economic activities must form part of economic transformation policies. This will require strong collaboration between education, the private and public sectors, and financial institutions.
Investment in young people is crucial. The national youth policy for 2015-2020 urgently needs to be put into action. It is a duplicate of the previous policy. Private and public sector partnerships to accelerate youth employment initiatives is crucial. Youth employment accelerators such as Giraffe, Harambee and Youth Employment Services, among many others, need better resources and participation to ensure coordination and consistency of policies and implementation, and ensure monitoring and evaluation processes track the progress made on targets. The economy as a whole will reap the benefits of rigorous investment to emancipate the South African youth.