Government has introduced a new six-pronged intervention to address SA's record-high youth unemployment, President Cyril Ramaphosa announced on Thursday
Ramaphosa presented his State of the Nation Address on Thursday with the country facing its highest unemployment rate since 2008 and gloomy business confidence levels.
Earlier in the week Statistics South Africa announced that the official unemployment rate for the fourth quarter of 2019 had remained unchanged at 29.1%, the highest level since the global financial crisis of 2008.
As Investec economist Lara Hodes noted earlier in the week, South Africa's expanded unemployment rate - which includes people who want to work but are not actively seeking work - was at 38.7% in the fourth quarter of last year. Youth unemployment, meanwhile, which includes individuals aged between 15 and 24, was at 58.1%. While this was a slight improvement from the previous quarter, it remains at a "critically high level."
Calling youth unemployment a "crisis", Ramaphosa said that of the 1.2 million young people who enter the labour market each year, approximately two thirds remain outside of employment, education or training."
"More than half of all young people are unemployed. We need to make this country work for young people, so that they can work for our country," he said.
The Presidential Youth Employment Intervention will entail six priority actions and span five years, he said.
The 6 approaches are:
- Create pathways for young people into the economy: Government is building "cutting-edge solutions" to reach young people where they are, online, by phone and in person, Ramaphosa said. This would allow them to receive support, information and work readiness training to improve employability. Starting this month, five prototypes are being launched in five provinces that will grow to a national network reaching 3 million young people.
- Targeted preparation: Young people will be prepared for the working world differently, Ramaphosa said. Shorter, more flexible courses are being offered in specific skills that employers in fast-growing sectors need.
- Better support: "New and innovative" ways are being developed to support youth entrepreneurship and self-employment, Ramaphosa said. He did not give further details.
- Expanded efforts: The Youth Employment Service – which to date says it has created over 32 000 jobs – is being expanded and will work with TVET colleges and the private sector to give more students practical workplace experience.
- More opportunities: A Presidential Youth Service programme will be established to give young people the opportunity to earn an income "while contributing to nation building", Ramaphosa said.
- Budget reallocation: Lastly, 1% of the national budget would be reallocated to finance a youth employment initiative. "This will be through top slicing from the budget, which will require that we all tighten our belts and redirect resources to address the national crisis of youth unemployment," Ramaphosa said. Finance Minister Tito Mboweni would give more details during his Budget Speech, said Mboweni.
The interventions will not be the first attempt to tackle the country's persistently high unemployment rate. Since taking office, Ramaphosa has made creating jobs a key part of his economic recovery programme. Previous interventions include the Presidential Jobs Summit, which included multiple strategies in a bid to create 275 000 new jobs a year.
In February last year, Ramaphosa said during his State of the Nation Address that the Employment Tax Incentive aimed at improving youth economic activity would be extended for another 10 years.
On Thursday, meanwhile, Ramaphosa announced that The National Youth Development Agency and the Department of Small Business Development would also provide grant funding and business support to 1 000 young entrepreneurs in the next 100 days, starting immediately, said the president.
* This article was updated on Friday 14 February to reflect the latest figures from YES.