Frontline Africa Advisory

The Growing Problem of Youth Unemployment in South Africa

The Growing Problem of Youth Unemployment in South Africa

The time for talk is finally over. South Africans are now expecting President Cyril Ramaphosa to walk the talk, and act on his promises. The President is expected to make a considerable dent on corruption, inequality, poverty and particularly youth unemployment and put the country back on the path of stability and growth.

South Africa’s unemployed youth represent a large majority of the total unemployed population. The 2019 unemployment statistics show that young people make up 55.2% of South Africa’s unemployed.  This is a ticking timebomb whose explosion will cause irreparable damage to the country’s social and economic fabric.

In his Inauguration Speech, President Ramaphosa admitted that youth unemployment was a great concern and government will put more effort into addressing this growing epidemic. In 2018, he launched the Youth Employment Service (YES), a collaboration between business and government, to improve young people’s prospects of finding employment and help build a more inclusive and sustainable economy. In addition, he announced that government was working on removing the experience requirement in entry-level public sector jobs to allow educated and/or skilled youths the chance to start working, even though they may not have a year or years’ worth experience on their curriculum vitaes.

All these initiatives are well and good.However, the reality is that South Africa has a stagnant economy that is failing to create employment opportunities for the thousands of graduates that exit the education system and enter the labour market each year.  In April 2019, The International Monetary Fund lowered South Africa’s projected GDP growth rate for 2019 from 1.4% to 1.2%, putting the country among the worst performers in sub-Saharan Africa. Projected GDP expansion for 2020 was also lowered from 1.7% to 1.5%. In late March, SARB Governor Lesetja Kganyago said the central bank expected SA’s GDP growth for 2019 to average 1.3%, down from the bank’s January projection of 1.7%. The bank’s forecast for 2020 was 1.8%, down from 2.0%. The above numbers paint a gloomy picture and tell us that we are going to have weather heavy storms before we see any signs of a rainbow.

The current initiatives by President have become more crucial in ensuring the economy gets back on track. These include the cleaning up of state owned institutions, getting rid of rampant corruption in the public sector and ramping up the R1 trillion investment drive. So far, he has managed to secure a quarter of that target from local and international investors. However, even if he manages to achieve this target, it still may not be enough to break the back of the unemployment pandemic. One of the crucial inhibitors for employment growth is the lack of appropriate skills, as well as the high price at which such can be procured. Business formations organisations have critical of the minimum wage law, stating that it will add to the costs of business and therefore unsustainable.

It is a delicate rope to walk for a government that has to ensure that citizens are not exploited in the labour market and on the other hand encourage businesses to take risks on young people who do not possess the required experience. Perhaps it is time government took a serious look at the laws and regulations that impede investment and employment in the country. The risks that come with inaction are too great and ghastly to contemplate. Failure to act soon will result in South Africa underperforming its great potential. In the long term, this will create conditions conducive to violent upheaval, economic alienation and greater social friction.

Written by Planina Tsholofelo Mokone

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