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Socio-economic challenges are in the spotlight as President Cyril Ramaphosa tonight delivers this year’s State of the Nation Address (Sona), with participants in the youth sector calling for the president to outline an “actionable plan”.
Nkosinathi Mahlangu, Youth Employment Portfolio head at Momentum Metropolitan, said young people were hoping for solutions to the many socio-economic challenges they were faced with as there had been many promises made in the previous address, which were not kept.
“The Sona comes at a time when the youth of South Africa is still battling with high unemployment and this is parallel to challenges on access to tertiary education for the matric class of 2023,” he said.
Ravi Naidoo, the CEO of the Youth Employment Service (YES), said the prevailing economic environment in 2024, with more than 4.5 million unemployed youth, was depressing for the young people and dangerous for society.
“We know this is the result of bad education and a low growth economy, in turn caused by poorly capacitated government departments and failing economic infrastructure (electricity, ports, rail, roads, water, etc.),” Naidoo said.
Mahlangu concurred with Naidoo, saying the starting point would be to report back on previously made promises on getting the youth skilled and economically active.
“Sona needs to outline an actionable plan with realistic timelines on how youth unemployment can be addressed. Social and relief grants are not sustainable and increasing them doesn’t seem possible as the economy doesn’t have enough taxpayers to service that line item. We don’t want to create a grant-dependent society,” he said.
Mahlangu encouraged the youth of South Africa to table their Sona expectations and identify key areas that were lacking or covered post the address.
He said this would also require the youth to indicate which avenues and opportunities had been explored and exhausted, by sharing their solution-focused input towards the government and the private sector.
“Public-private partnerships are the catalysts we need to address the challenges faced by our youth,” Mahlangu said.
YES’s Naidoo said education had long been the weakest link in the South African development path. He said, however, there were opportunities to substantially improve the quality of basic school education outcomes, through adopting new technologies to assist teachers to teach.
“There are approximately 500 000 teachers in public schools and the government has been unable to retrain teachers in sufficient numbers to ensure South Africa learners, especially in the more disadvantaged schools, reach an internationally acceptable competitive level.”
Naidoo said large-scale public work programmes should be mobilised to get youth to take up short employment opportunities in infrastructure maintenance and community engagement.
“Youth will be getting work that is socially useful, such as fixing potholes and unblocking stormwater drains.”
Naidoo said the government did not need to make many direct tax-funded investments, but rather needed to clear the growth path of obstacles and barriers to private investment.
“The economy is currently growing at less than 1% a year, but if it can accelerate to 4%, there will be substantially more jobs available. The government needs to work much more closely and co-operatively with the private sector, particularly to unlock large-scale investments in high-growth and labour-intensive sectors of the economy (such as tourism). Every three months, government and the private sector must announce what practical steps they have jointly taken to unlock private sector investment,” he added.
As the major sectors of the economy and economic infrastructure started to turn around through other national initiatives, more sustainable employment would result.
Unemployment was impossible to solve without consistent and higher levels of economic growth.
Naidoo said the government should be bold and double the SA Revenue Service’s Employment Tax Incentive (ETI) to R3 000 per month, making the employment of young workers even more attractive.
The ETI currently allowed companies to claim back R1 500 per month for the first year they employed a young person. This tax incentive would result in a larger pool of future taxpayers and thus pay for itself, the organisation said.
Naidoo pointed to the National Planning Commission’s (NPC) prediction that 90% of future jobs would come through small businesses.
However, he said this had not happened as there are too many burdens placed on small businesses and very little support or financing available.
“Small businesses should have a reduced tax rate, be allowed to employ young workers with fewer labour restrictions during their first 12 months of work, and be able to access cheaper working capital to expand their business (e.g. a private sector managed funding programme that can support 10 000 small businesses per year),” Naidoo said.
It was critical that the government worked with the private sector to grow the economy and create jobs.
“A partnership-based growth model is needed if actual progress is to be achieved,” Naidoo said.
Amendment to the Gazette