YOUTH DIVIDEND OR TICKING TIME BOMB:
Why telling youth ‘Just start your own business’ is not a practical solution to youth unemployment.
Africa’s population of around 1.2 billion people is expected to more than double within the next 30 years, meaning over a quarter of all the people on Earth will live on our continent. Already the world’s youngest region, Africa will contain 38 out of the 40 youngest countries by 2050, with an average age of under 25.
On paper, a predominantly young population is encouraging for the prospects of any country.
In reality, however, it doesn’t always work like that.
With over half its population under the age of 30, South Africa boasts what economists call a “youth bulge.” This should bode well for increasing innovation, economic growth, and development.
The key word there, however, is “should.”
Sadly, South Africa has so far failed to reap the demographic dividend its youthful population has the potential to offer. Why? Because, as with much of the rest of the continent, vast swathes of our young population are unemployed.
The Human Sciences Research Council (HSRC) describes the unemployment rate among African people in the 15-24 age group as “staggering,” and reports that, of the roughly one million South Africans who leave school each year, approximately 57% remain unemployed years later.
Only 15% secure employment immediately after school.
Again, we ask why?
The answer, as with so many root causes of any country’s problems, lies in education. Or, more accurately, the lack of it.
In South Africa, there is a gaping chasm between the skills employers need and those our young people have.
Much of the blame for this phenomenon can be laid squarely at the feet of our school system, which continues to fail tens of thousands of our youth every year. Many learners pass through the education system without even managing to acquire the literacy and numeracy skills that are essential to all but the most menial kinds of employment.
According to an article in the Mail & Guardian, only six out of every 100 young South Africans who start Grade 1 complete some kind of tertiary qualification. Three out of four unemployed young people have been without a job for a year or longer. And close to 10 million young people are currently not in any kind of education, employment, or training.
There is a strong connection between your education level and the opportunities you have as a young person in this country. But there is also an equally strong correlation between how much money you have and the quality of education you have the potential to receive.
Millions of South Africans are dependent on social relief grants or funding from government schemes, private companies and educational institutions if they wish to pursue any kind of post-school qualification.
But even though more funding for tertiary education is becoming available, this can be a problem in itself. More funding means more students applying for places at our colleges and universities, but these institutions simply can’t keep up with the demand.
There is an oversupply of wannabe students, all demanding seats in classrooms and beds in accommodation. And we’ve all seen the rioting and demonstrations that take place when they’re turned away due to lack of capacity.
But even those who manage to secure places then face the mountainous task of trying to find employment after graduation. You don’t have to throw many stones before you hit a jobless graduate in South Africa. A degree or diploma may increase your chance of finding a job, but they are by no means a guarantee.
So, if a tertiary qualification isn’t the silver bullet to address our growing unemployment, what is?
Many wave the entrepreneurship flag as the miracle cure-all for our unemployment crisis.
It’s true that, in a free market economy, small businesses are the foundation on which economic growth – and greater employment – are built.
In Singapore, for example, which I’ve touted previously as an example of how robust and ethical leadership can transform a once corrupt country, almost two-thirds of small business owners are optimistic for the future. Over half report positive cash flows and 63% expect their revenue to rise.
Closer to home, Mauritius is seen as an entrepreneur’s paradise, with its long history of political stability, thriving infrastructure, and favourable tax policies, labour laws and business regulations.
The picture in South Africa, however, is unfortunately not as encouraging. In fact, according to research by the University of Western Cape, we have one of the highest start-up failure rates in the world – 70% to 80% of businesses fail within five years.
Only 15% of South Africa’s small businesses grow to become profitable enterprises, and very few go on to produce long-term job opportunities.
It’s obvious then, that throw-away advice such as “Oh, just start your own business” is neither practical nor helpful for any young person looking for a viable way out of their unemployment nightmare.
So, what is?
Unfortunately, so many hopeful initiatives are doomed to fail before they start because unless we address the root cause of the issue, all these “solutions” are doing is tackling the symptoms of the disease.
And the name of this disease is CORRUPTION.
What many in South Africa are guilty of doing, no matter how well-intentioned their ideas may be, is tackling the problem from the wrong end.
We’re papering over the cracks, but the foundations are still shifting. And they will continue to do so until the whole building falls down.
You can put whatever spin on it you choose but there’s no escaping the fact that South Africa is a failed state. Corruption, crime and shrinking international investment will continue to define our country’s trajectory for as long as people in positions of power continue to hang out with the wrong friends.
Load shedding is one of the most insidious results of corruption we face right now, costing our country almost R1 billion every day. In a desperate attempt to reduce it, we burn untold litres of diesel and continue to run ageing, polluting coal-fired power stations.
This failure to adhere to global environmental guidelines puts us at risk of becoming a global pariah and losing access to the EU, our largest trading partner. The strategy to continue using dirty fuel, thus delaying our transition to cleaner energy, also delays our access to billions of Rands in funding – a financial incentive from wealthy nations to close coal plants.
And just to rub salt into this gaping wound, many of our skilled, high-earning (and thus high-tax-paying) workers are leaving the country to ply their trade overseas in countries where the lights stay on. This further erodes our already limited tax base – and less money going into government coffers means a further reliance on credit we have no realistic chance of ever being able to fully repay.
It’s not an exaggeration to say that almost every one of the problems facing South Africa today – particularly when it comes to the crippling unemployment of our youth – can be attributed to the ripple effect of years of rampant corruption.
We have to stem the tide – locally, regionally and nationally. There’s no point telling our young people to start a business when there are not enough people with enough money to buy what they have to sell.