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Monday, January 20, 2025

Addressing unemployment through a plan lifting youth out of hopelessness


EDWIN NAIDU

South Africa looks back on another concluded Youth Month with a rallying call urging the youth to beat the deepening unemployment crisis by adopting a Mandela-like entrepreneurial spirit the iconic leader often spoke about.

However, with Mandela Month and Mandela Day upon us, South Africa is staring down the barrel of an unemployment headache, with the outlook considerably worsening for the youth.

For the first quarter of 2023, young people experienced underemployment at far higher rates than older persons.
Underemployment is described as the total number of people in an economy who are unwillingly working in low-skill and low-paying jobs or only part-time.


This underscores the youth crisis, corroborated by StatsSA, which recorded South Africa’s unemployment rate in the first quarter of 2023 at 32,9 % and among the highest in the world.
One of the success stories of a national campaign to address the job challenge has been establishing a government programme to support youth to build their own enterprises.


To date, 45 988 financial and non-financial enterprise opportunities have been provided by the Department of Small Business Development and the National Youth Development Agency.
But this success story has been buried under shocking unemployment statistics. In the first quarter of 2023, the underemployment rate was 6,3% for those aged 15-24 and 5,2% for those aged 24-34, which is higher than the national rate of 4,9%. The lowest underemployment rate is recorded in the age groups 35-44 years and 55-64 years, at 4,6%.


In the first Quarter of 2023, the Quarterly Labour Force survey found 32.9% of South Africans jobless. Many more have given up looking for opportunities. In the first quarter of 2023, 44.7% of young people between 15 and 34 years were outside of employment, education or training.
Signs of improvement are not evident when one considers that in 2021, South Africa’s youth unemployment rate was 64.18%, a 4.56% increase from 2020.


“Unemployment among young South Africans is a national crisis that demands urgent, innovative and coordinated solutions. It is, therefore, essential that we implement a comprehensive plan to create no fewer than 2 million jobs for young people within the next decade,” said President Cyril Ramaphosa in 2020, announcing a national strategic plan to address this growing challenge.
Emerging from the global Covid-19 pandemic, South Africa has unprecedented levels of unemployment, prompting Ramaphosa to decide that the persistent and structural nature of youth unemployment means that the issue can no longer be addressed through isolated initiatives.
The situation requires an extensive, coordinated and sustained effort to respond to both the changing needs of the economy and those of young people in South Africa.


The persistent and structural nature of youth unemployment means that the issue can no longer be addressed through isolated initiatives; hence the presidential priority is to create the country’s most comprehensive effort to address youth unemployment to date.


In his 2020 State of the Nation Address, the President launched the ambitious multi-sector action programme, the Presidential Youth Employment Intervention (PYEI), expanding the range of opportunities for young people in South Africa.


Driven by a Project Management Office (PMO) in the Presidency, this initiative targeted youth, whether in further education or training, work experience, youth service, employment, or entrepreneurship. It recognises the great potential of South Africa’s young people and works towards a society where every young person has a path to progress.


Another success story has been the private sector-led Youth Employment Service, a core partner of the PYEI, which placed 30 535 young people in work experience opportunities in various sectors of the economy. YES has placed over 100,000 South Africans between the ages of 18 and 29 in local businesses for a year of work experience.


Through YES, R6 billion has been injected into the economy, enabling participants to support their families – making a real dent in youth unemployment in the country.


Against this backdrop, the PYEI Presidential Youth Employment Intervention (PYEI) was launched to accelerate the transition of young people from learning to earning.


Through a strong commitment to partnering and mobilising stakeholders in the ecosystem, the PYEI has made significant progress towards achieving this objective in the past financial year.
This involved driving systems change to address the barriers that young people face, aggregating existing opportunities and creating new opportunities for young people, and linking young people to opportunities and available support in a single network.


YES Chief Executive Officer Ravi Naidoo told Inside Education that in the past 12 months, 32 578 new jobs had been created, the total for the full period standing at 113 911, with 5 298 new jobs created in June.


“This is good, considering the economy is flat. YES, is the biggest programme with social impact that is 100% paid for by the private sector, without taxpayers’ money. A growing number of corporates, currently 1 517, corporates have paid to support the programme,” Naidoo said.


He said that after their training, a large number of YES candidates (43%) get work in the companies they trained at or in the same sector, 15% open their own business, while the remainder return to training, and some still cannot find jobs.


But through ensuring that the candidates placed in YES programmes are given relevant skills for the future, Naidoo said they hope to create marketable skills, such as drone pilot training, coding, barista making and creative career options.


One of the success stories is Chulumanco Lonwabo Nomtyala, a trailblazing developer and creator of Soft 4IR Apps, an app streamlining housing subsidy applications. Lonwabo aims to partner with municipalities, empowering individuals to access housing grants conveniently. His vision is to bring convenience and knowledge to those in need.


Another success story, Thobani May has had a transformative journey from struggle to success, fuelled by his participation in the YES programme. Now the owner of Eco Char, a charcoal production company focused on environmental restoration, Eco Char employs five people and contributes to uplifting its community.


As part of a revitalised National Youth Service (NYS), interventions focus on priority growth areas with employment potential for young people in digital, technology and global business services; agriculture; installation repairs and maintenance; social services; and the automotive sector.


This initiative sought to link young people to opportunities through a national network, the National Pathway Management Network, linking a growing number of young people to learning and earning opportunities.


Currently, more than 4 million young people are in the SA Youth platform network and the Employment Services South Africa (ESSA) platform.


During the financial year 2022/23, 330 181 earning opportunities were secured by young people on SA Youth, and a further 50 375 earning opportunities were secured.


The Department of Basic Education’s School Assistants programme, a flagship programme of the Presidential Employment Stimulus, created most of the opportunities secured by young people in the network. SA Youth facilitated all recruitments for this programme.


SA Youth is reaching young people who are most in need of support. The PYEI’s Revitalised National Youth Service created 47 234 opportunities for young people to engage in paid community service in 2022/23. For many, the opportunity was the first time in their lives they earned their own money and could enhance their contribution to their communities.


SA Youth reaches many of the poorest young people, with 73% reporting that they attended poorer-resourced schools (quintile 1-3). Moreover, 65% of the young people registered on the SA Youth network, who responded to a question about social grants, reported that they live in households where at least one member receives a grant.


In a recent report discussing the project’s impact, 47 234 young people secured earning opportunities, while 10 431 have moved into other opportunities.


The Department of Higher Education and Training placed 14 504 TVET learners and graduates into workplace experience opportunities, enabling many to complete their qualifications.


Additionally, the private sector-led Youth Employment Service, a core partner of the PYEI, placed 30 535 young people in work experience opportunities in various sectors of the economy in the last financial year.


YES has placed over 100,000 South Africans between the ages of 18 and 29 in local businesses for a year of work experience. Through YES, a total of R6 billion has been injected into the economy, enabling participants to support their families. Nearly two-thirds of participants come from households reliant on social grants, and 40% are employed upon programme completion.


In the next quarter, the PYEI is launching a pilot of a pay-for-performance mechanism to test whether a different financing model for skilling can improve employment outcomes for young people.


Instead of receiving payment for training activities and outputs, appointed contractors receive the bulk of their income only when they demonstrate that they have placed young people in earning opportunities.


Led by the Department of Higher Education and Training through the National Skills Fund, the pay-for-performance mechanism will see the NSF play the role of an Outcomes Funder.


The outcome of interest is the placement of young people into sustainable earning opportunities. The pilot will train and place a targeted 4 500 young people into earning opportunities in 2023/24. This proof of concept will inform a scale-up phase that will crowd private investment to reach more young people.


Basic Education Minister Angie Motshekga also said last month that the Department of Basic Education is implementing the Presidential Youth Employment Initiative to tackle unemployment among youth in South Africa.


“We also have a responsibility to create employment opportunities, particularly for the youth who are neither in employment, education, nor training,” said Motshekga.


In a rallying call for the Black Business Council and the private sector to join South Africa’s skills revolution, Minister of Higher Education, Science and Innovation, Dr Blade Nzimande, has reiterated the government’s commitment to creating opportunities for the country’s youth.


A sum of R1,7 billion was disbursed by the National Skills Fund towards its bursaries programme in 2021/22, benefiting students enrolled in undergraduate and postgraduate programmes in scarce and critical skills.


“The central mandate of the Department of Higher Education and Training (DHET) is to develop a skilled and capable workforce whilst broadening the skills base of our country to support an inclusive growth path,” he said at the Black Business Council summit.


Capacitating today’s youth to be job creators instead of job seekers is admirable and a sign of a maturing and progressive state. However, entrepreneurship goes beyond simply training the youth to start businesses – we must invest in helping the youth sustain new enterprises and therein lies the challenge, or is it an opportunity?

INSIDE EDUCATION

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