June is Youth Month in South Africa, with National Youth Day on June 16 being the high point of this month each year. This year, as usual, there were again plenty of youth and other gatherings, political speeches and announcements, mostly focusing on South Africa’s critical shortage of jobs for young people. But all is not merely doom and gloom. Take heart that plenty is already being done, with excellent results, to bring our youth actively into the economic fold.
However, according to the official Quarterly Labour Force Survey (QLFS) for the first quarter of 2022, the unemployment rate was 63,9% for those aged 15-24 and 42,1% for those aged 25-34 years, while the current official overall national rate stands at 34,5%. Among young graduates the unemployment rate was 33%. Of course, this statistical nightmare was also badly exacerbated by the impacts of the Covid-19 pandemic.
However, as June 16 passed, the speeches and promises of youth job creation, education and skills training again rapidly receded into the background behind the noise of so many other South African crises, all deserving of priority attention.
But while we seem to know the devastating statistical scope of our youth unemployment problem some critical questions need to be asked. Is it all that bad as the statistics seem to make out, or is it even worse? What is being done to address the problem – enough, too little, or are we merely treading water? Are we looking at the correct solutions or are we missing something? How do we know who is doing what, when and where?
We seem to be fixated on the premise that accelerated economic recovery and sustainable development and growth – which imply plenty of currently absent foreign direct investment – is the key to solving our massive youth unemployment – and general unemployment – headache. And yes, while this is a major, if not the major part of solving this problem for the long term, it does not represent the full remedy required to take the sting out of youth unemployment before something gives.
For starters, we cannot wait until economic recovery has been completed and sustainable development and growth takes off on the back of a wave of investment before we start creating jobs and filling them, especially with our marginalised youth. By that time, the ticking time bomb will most likely already have exploded.
To avert such tragedy, a two-pronged approach is required. First, we need programmes and initiatives aimed at achieving immediate relief; immediately placing as many young people as possible in jobs or skills training as soon as possible to alleviate the immediate pressures. Secondly, we need accelerated economic recovery as quickly as possible to achieve sustainable growth and job creation over the long term, which will first require structural economic reforms, government facilitation, foreign buy-in and investment, and sustainable higher growth levels. I’ll come back to these.
There’s a third vital component requiring urgent attention – it consists of education, skills development, an apprentice system, and mentorships. Without going into detail here, most people will agree that basic and higher education in South Africa is in crisis and urgently needs fixing. The tried and trusted apprenticeship system this country once enjoyed, is no more. And economically and politically compelled retrenchment programmes plus ill-conceived transformation strategies have removed vital mentorships for young entrants in key professions like engineering. Highly qualified graduates with no experience cannot find jobs as a result.
Equally, corrective attention is needed to stem the flow of premature school-leavers. According to Statistician-General Risenga Maluleke, as many as 50.1% of the country’s 7.9 million unemployed people in the first quarter of 2022, had education levels below matric. Many of these are simply unemployable except perhaps in low-paid menial jobs. But the sad fact is that the bulk of these people will probably never be employed in full-time sustainable jobs in the formal sector. Also, by the beginning of 2021 approximately 3,3 million (32.4%) of the 10,2 million persons aged 15–24 years at the time were not in employment, education or training – that is one in three. Again, clearly the starting point in correcting this should be fixing basic education and providing fit-for-purpose skills training and higher education.
As part of the plans to bridge the gap between skills, qualifications, experience and jobs, President Cyril Ramaphosa and Higher Education Minister Blade Nzimande recently announced that future skills development will involve an apprenticeship based TVET college system similar to the dual system in Germany. In April the Department of Higher Education and Training started placing 10,000 unemployed TVET graduates in workplaces in this regard. The sad side of this story is that for many decades before 1994 South Africa had an excellent apprentice and technical education system that was scrapped over the last three decades – now it’s being brought back, unfortunately as an emergency response.
Which brings us to a fourth dimension of the youth unemployment problem – the need for entrepreneurial self-employment and growing the small, medium and micro enterprise (SMME) business sector. This is a topic in itself for another day. Suffice it to say that more deregulation, removal of unnecessary bureaucratic red tape and costs, and all-round facilitation by government with policies and conditions conducive to growing this sector, are needed as a matter of great urgency. There has thus far been plenty of political lip service in this regard but precious little actual implementation of anything.
To recap, to effectively address and turn around South Africa’s huge youth and overall unemployment problem, four components have to be addressed in an integrated, holistic strategic approach. These are, (1) employment programmes for immediate relief; (2) long-term sustainable job creation; (3) education, training and skills development; and (4) facilitating and growing the SMME sector and supporting entrepreneurial self-employment.
Already back in 2012 the National Development Plan (NDP) paid much attention to these matters and offered strategies and plans for achieving accelerated inclusive economic growth and development, with a target date of a prosperous new South Africa to be reached by 2030. It was stated that the NDP and its proposals will need to be implemented in the right order over the next 17 years until 2030 – unfortunately ten of those years have already passed with little or no implementation.
The NDP stated that in order to raise employment, South Africa needs better educational outcomes, a healthier population, better located and maintained infrastructure, a sound social safety net, a capable state and much lower levels of corruption. Of these, the social safety net is about the only aspect where any progress has taken place. Performance in respect of the rest scores a tragic zero. In fact, continuing high levels of corruption, the Covid-19 pandemic, destructive rioting and looting in 2021, and disastrous floods have worsened the outlook. There’s very little cheer to be found for any entity or person wanting to make a living here, it seems. Or is it really all that bad?
Nonetheless, experts seem to agree that sustained economic growth and development is the one sustainable solution to our unemployment problem, of which youth unemployment is but one part. The proof was provided during South Africa’s golden years from 2004 to 2008 when four consecutive years of economic growth above 5% annually was achieved, expanding the economy by 25%, and causing unemployment to fall from 28% to 21.5%… the lowest it has ever been in the democratic era.
That period of high, sustainable growth and lower unemployment came to a sudden end in 2008 with the global financial crisis. But South Africa never fully recovered again as it slid ever deeper into its state-capture and corruption nightmare under Jacob Zuma, followed by the debilitating Covid-19 pandemic and other troubles. So where to now?
The government has a recovery and growth plan, and a tentative start has been made with structural reforms, but arguably this is by far not enough, fast enough. Now progress is again being threatened by the Ramaphosa farm theft scandal, the race to the ANC’s elective conference in December, and the ANC policy conference that is toying with and arguing about the semantics of “new” policies… when all the tools and plans are already in place and all we need is one thing, active implementation.
However, as I mentioned, all is not doom and gloom and plenty is already being done with regard to job creation, skills development and training, should one care to take a deeper look and not just jump on the bandwagon of constantly sounding the alarm of a “high unemployment crisis”. Everyone seems to be busy actively tackling the youth unemployment bogey, from government with the Presidency’s youth employment initiative, the tax incentive scheme, the Jobs Fund and the Youth Employment Service to business across multiple schemes and programmes, privately or in conjunction with government. A myriad of programmes is already in place. As a small sample, just a drop in the bucket, consider the following initiatives:
The Youth Employment Service or YES is a South African not-for-profit organisation that works with more than 1,900 companies, has created more than 79,000 work opportunities in a period of three years, and has injected R4.4 billion into the economy through youth salaries, all without any government funding.
The Department of Basic Education last year launched a program to employ over 287,000 unemployed youth aged 18-35 as student assistants and teacher assistants across South Africa, with the minimum qualifying requirement being that candidates receive a government grant or are studying and must be South African.
Telkom has partnered with business-driven initiative Youth Employment Service (YES) to provide 499 South African youth access to job opportunities, learn future-fit skills in the ever-growing information and communications technology (ICT) sector and contribute to their communities.
Skills Empire is a youth development company funded by corporates that places young, qualified people between the ages of 18 and 30 in programmes aimed at them gaining work experience and bridging the gap between job availability and unemployed youth.
The company Servest employs over 18,000 people of whom 25% are youths aged between 18 and 29, and now plans to increase its youth employment component to 50%.
In this year’s state of the nation address President Cyril Ramaphosa announced that that the government was working closely with global business services (GBS) sector – including youth skills enhancement – and was “on track” to create 500,000 jobs over the next few years.
The Department of Home Affairs is recruiting 10,000 unemployed young people for the digitisation of paper records, enhancing their skills and contributing to the modernisation of citizen services.
The state Social Employment Fund will create some 50,000 work opportunities using the capability of organisations beyond government, in areas such as urban agriculture, early childhood development, public art and tackling gender-based violence.
Government launched its Employment Tax Incentive (ETI) in 2014 which reduces the cost of hiring young people by allowing employers to pay less Pay-As-You-Earn (PAYE) tax on behalf of qualifying employees.
According to Business Process Enabling South Africa (BPESA) the GBS sector created more than 50,000 cumulative new jobs from January 2018 up to the second quarter of 2021, while a target has been set to create between 250,000 and 500,000 cumulative new jobs in the GBS sector over the next 8 years.
Coca-Cola Beverages South Africa has spent more than R105-million on its Bizniz in a Box (BiB) initiative, aimed at transforming aspirant entrepreneurs into fully-fledged business owners, and recently also on its Study Buddy Fund (SBF) – to date over 700 entrepreneurs across the country have benefitted while the SBF has enabled 55 young people from 14 host communities to access tertiary education.
The City of Johannesburg together with business wants to introduce a 24-hour workday/night economy in the hope of significantly bolstering job opportunities, particularly for young people, based on similar successful programmes in cities like New York and Tokyo.
The Salesian Institute Youth Projects’ Waves of Change program provides education and job training to at least 200 youth between the ages of 18 and 35 each year to become seafarers.
The Johannesburg Development Agency (JDA) has established a number of projects to support job creation and enterprise and skills development for disadvantaged groups of women and youth.
The North West government is facilitating an initiative whereby 200 unemployed youths, including those getting UIF grants, have been given the opportunity to enter the hospitality industry and become part of the country’s labour force as chefs, cooks, baristas and table attendants.
The Citi Foundation has partnered with TechnoServe in investing over R14 million into a four-year programme designed to assist 270 young men and women in the townships of Durban, Cape Town and Gauteng to gain economic independence through their Youth Ideas Development Programme.
The company Ninety One supports the Youth Employment Service with its graduate and intern programmes that provide business mentoring for new entrants to the asset management industry.
Since April, the Department of Higher Education and Training has been placing 10,000 unemployed TVET graduates in workplaces.
There are literally thousands of employment and training schemes being implemented or planned, varying greatly in size, duration and scope. The problem here is that nobody is centrally monitoring and coordinating all of these projects. How do we measure the actual impact of so many job creation and training schemes on the numbers of unemployed people provided by Statistics South Africa every quarter? I would argue that this exposes a central flaw in our efforts to combat the unemployment scourge.
That flaw is the lack of central monitoring and coordination, bringing together everything that government is doing as well as the myriad private initiatives. And by this I don’t mean more centralised control as is the ANC’s ideological penchant; I am simply referring to the central monitoring and coordination of collective planning, government and private initiatives, progress being made, weaknesses being identified, assistance needed, overlapping initiatives being avoided, and so forth, so that some central record will exist of what is being done, where and by whom, so that one hand will know what the other is doing and no time and effort is wasted.
With so many schemes and initiatives already in place, both those driven by government and those of the private sector, a central coordinating function will bring it all together, cohesively and orderly. It will allow government to better perform its facilitating role and will allow private sector entities to make better, meaningful contributions to this noble fight. But, again, the good news is that plenty is already being done, which augurs well for South Africa’s ability to turn this scourge around.
Stef Terblanche is a Cape Town-based political analyst/consultant and journalist. He writes in his personal capacity.