Youth unemployment, exacerbated by the Covid-19 pandemic, is a “national crisis” that requires a clear focus if it is to be resolved, says Business Leadership South Africa CEO Busi Mavuso.
She says that, although the challenges that led to June 16 being marked as Youth Day – following a dramatic time in 1976 when young people took it into their own hands to stand up against the Apartheid government – are different, current challenges posed to the youth require urgent focus.
“The statistics are often talked about, which makes them somehow feel more normal. But there is nothing normal about the fact that 65% of youth aged [between] 15 to 24 were unemployed in the first quarter [of this year],” says Mavuso.
She points out that even among young graduates, the unemployment rate was 33%.
However, Mavuso says many people are seized with the challenge of addressing the youth unemployment crisis, such as the Presidency’s Youth Employment Initiative, which is tackling the problem on multiple fronts.
The business sector is also working with government through the Jobs Fund and the Youth Employment Service, while the employment tax incentive provides a tax benefit for companies that employ young people.
“These are all worthwhile endeavours, but the numbers remain shockingly high, exacerbated by the number of young people joining the labour force every year,” she says.
BLSA is working with USAID, through the Beyond Advocacy Fund, on the problem too. In this regard, BLSA is partnering with Afrika Tikkun Services to alleviate unemployment, focused on developing digital skills among young people.
Fundamentally, Mavuso says the youth employment problem is a component of the wider unemployment problem. “The economy simply does not employ enough people of any sort.”
She says youth employment was better in the past, with the lowest post-democracy unemployment rate, in 2008, being 21.5%, down from the 36% reported for the second quarter of that year.
The same year held another record, culminating in four years of economic growth above 5% which grew the economy by 25%, says Mavuso. “Alongside that growth, unemployment fell from 28% to its record low, after 2-million more people were employed.
“This should make it obvious that the one sustainable solution to unemployment is growth – sustained growth, year after year,” she adds.
However, the economy’s expansion was halted in 2008 because of the global financial crisis, which triggered a worldwide recession that South Africa was not immune from. “But while the rest of the world recovered, we did not,” says Mavuso.
In the years that followed, “deep dysfunction” arose, resulting in, principally South Africa’s grossly underperforming State-owned enterprises, she says. In addition, the then growing lack of reliable electricity killed economic activity and chased away investment.
Further, capacity problems at domestic railways and ports snarls up logistics systems, compounded by disruptions on local roads. “Others, from the Post Office to the South African Nuclear Energy Corporation, are failing the economy while imperilling government’s finances,” says Mavuso.
“In government itself, particularly local government, good governance has become a distant memory. Many of our municipalities have become so deeply dysfunctional that businesses cannot operate and are being forced to relocate,” she says.
“The good news is that many in government and business are focused on addressing these and other problems,” states Mavuso.
She says that although the term “structural reforms” is often used, these are how South Africa can get the economy back on a high growth track. “We have to fundamentally change the way the economy works, how electricity is generated, how goods move around it, how we access data services, how we access skills from across the world, and much else.”
In this regard, Mavuso says business and government are working hard together to deliver these reforms and there are several areas where progress has been made, such as the ability for companies to build electricity plants of up to 100 MW without a licence.
“Many in the public sector are also working hard to fix government and business is committed to supporting the process. Though structures like Tamdev, business mobilises skilled individuals to support the public sector with capacity in key areas,” she says.
Voluntary efforts, such as Business for South Africa, have also been key to supporting government in the fight against the pandemic and now in determining priorities for future reform, says Mavuso.
“While our young people face an economy that is not providing space for them, I have some hope that we are beginning to turn the situation around.
“We need to keep intensely focused on following through on those structural reforms, repairing the state and getting the economy growing. If we get that right, we will be able to start seriously changing the outlook for our youth,” she concludes.