Addressing youth unemployment in South Africa: why the private sector must play a role

By: Adebimpe Ofusori

The unemployment rate in South Africa has been exceptionally high in the resent times. According to statistics agency, there is a steady increase in the unemployment rate from 34.9% in the third quarter of 2021 to 35.3% in the fourth quarter. The reasons have been attributed to losses of job mainly from the manufacturing and construction sectors. The total number of unemployed as at October-December 2021 is put at 7.921 million people compared with 7.643 million people in the previous three months as documented by Statistics South Africa. About 46.2% of the labour force was without work in the fourth quarter of 2021 compared with 46.6% in the third quarter. In the year 2021, on a global list of 82 countries, South Africa’s unemployment rate surged to the highest as monitored by Bloomberg. The latest official data according to Daily Maverick reflect that two out of every three young people (under 35 years) in South Africa are unemployed, and this rises to three out of four of the under-25s. The advent of Covid-19 pandemic has seriously affected the already distressed labour market as so many SMEs were forced to close-down due to the total lockdown imposed by the South African government.

As of 2019, South African youth’s population is put at 20.6 million, which is 35.7 percent of the country’s total population of about 57.7 million people. Most of the South African youths are not gainfully employed and despite their vulnerability, are not included in any social welfare system. This trend of youth unemployment has been the order of the day in other African countries. One of the major factor that has been identified for increase in the unemployment rate among the youths is the decline in the absorption rate of youth into the labour market. Employment rate is an economic indicator of a viable society. Youth engagement in employment opportunities have lot of implications on socio-economic development. The unemployment rate of youths has not been left out of the menace of the general unemployment in South Africa. Urgent steps are needed to boost multi-pronged strategy that increase the rate of youth employment in the society. The International Labour Organization’s recent report identifies enterprise size as a key factor determining the private sector’s contributions to the generation of jobs. The driving force of the economic development of any nation of the world are the youths. Increase in youth unemployment rate means young people are not able to contribute their developmental quota to the country’s economic growth thus imposing larger burden on the state. The continuous increase in youth unemployment rate has long been seen as a national disaster due to the rampant nature of youth’s restlessness, poverty and inequality. If the rate of unemployment among the youths is not looked into, social problems such as crime, insecurity, banditry are in evitable. To reduce the rate of unemployment among the youths, policymakers have suggested that African countries should channel most of their resources to the youth population to get them engaged and also alleviate the suffering imposed by unemployment.  President Cyril Ramaphosa, in one of his state of the Nation’s Address early this year, spoke on the issue of unemployment, emphasising that “government does not create employment but creates a conducive environment to enable the private sector to create jobs”. Reports have shown that the transformation of African economy is dependent on private sector.

In view of the current economic realities all over the world and in particular, South Africa, it is now apparent that the government alone may not be able to combat the continuous astronomical increase in the rate of unemployment among the youths. It is therefore advisable and expedient for stakeholders in private sector to massively compliment the efforts of the government in the creation of jobs. Some stakeholders in the private sectors are beginning to register their presence in mitigating the influence of unemployment among the youths. Top on the list is the Youth Employment Service (YES) which was established in 2018 as a non-profit making organization by the private sector with the sole aim of creating and providing job opportunities for the unemployed youth. During unfavourable condition such as Covid-19, Youth Employment Service engaged with 1,700 private companies (mostly large companies) and numerous implementation partners to sponsor nearly 70,000 young people. The initiative ensures salaries of R4-billion were paid to young workers (60% women, and 90% from grant-recipient households).

Three Basic reasons why private sectors must play a role in addressing youth unemployment in South Africa

• There is still continuous increase in the rate of unemployed youths: Increase in the rate of unemployment among the South African youths has continue unabated. There has been increase in skills and talents among the South African youths without corresponding labour space for engagement. The private sector involvement in the eradication of unemployment, will ensure a perfect and efficient match between the jobs provided and the available skills. Private sector can alleviate the spate of youth unemployment by providing training to unemployed youths, financially supporting training programs, and participating in planning for skills acquisition at the national level.
• Government alone cannot address the menace of youth unemployment: The task to get rid of youth unemployment in the country is a herculean one. It is now becoming a reality that government alone cannot create employment opportunities for all the unemployed youths. One of the solutions to this menace is for the government to partner with the private sector and also create an enabling environment for job creation by concerned stakeholders. It will be very difficult for government alone to attempt to formulate long-term solutions for youth unemployment without partnership with private sector. The government can leverage on the willingness of some private partners to support the creation of sustainable jobs necessary for contributing to economic growth. Knowing that Unemployment is a global challenge, government has a responsibility of tackle various changes that occur across the globe such as the Covid-19 pandemic. During this outbreak, so many jobs were lost as many industries had to retrench thereby rendering most youths jobless and complicating the already worsened rate of unemployment in the country.
• There is continous increase in crime rate: Information available according to BusinessTech suggest that the total crime rate (those reported and detected by the South African Police) has declined by 3.3%. Crimes that went down include contact crimes such as assault and sexual offences; it must however be noted that other violent crimes such as murder and attempted murder went up. For instance 6,859 murders were recorded in South Africa in the last three months from 6,279 recorded in the previous year while attempted murder went up by 3.5% out of which 645 cases were successfully tracked by the South African Police. Crime rate in South Africa has been successfully linked to increase in youth’s unemployment rate. Reports have suggested that if the increase in unemployment rate among the youths can be worked on by stakeholders, then, there will be a crime free society. This is one of the reasons for consistent call on private sectors to join hand with the government by playing vital roles that can help address youth unemployment in South Africa.

In conclusion, youth’s unemployment has continued to increase unabated in South Africa. It has however become glaring that the government alone cannot sustain the provision of job opportunities that is needed for sustainable economic growth, it is therefore necessary for stakeholders, most especially the private sector to partner with the South African government for the creation of more job opportunities and by extension, reduced the unemployment rate among the South African youths.

 Dr. Adebimpe Ofusori is a researcher at the University of KwaZulu-Natal. She writes in her personal capacity