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Accelerating Efforts to Solve Unemployment Challenges

KIZITO OKECHUKWU | AUGUST 5, 2019

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In May this year, I penned a piece on South Africa’s unemployment crisis. If my memory serves me, at that time Statistics South Africa had just released the quarterly unemployment rate – a staggering 27.6%, which shocked us all to the core. Barely two months later, and the number has now ballooned to 29% (although many experts argue that it’s well over 30%).

In my May article, I listed four key points on what we can do to curb this red-alert challenge. I won’t regurgitate all my previous content, just paraphrase the four points, these are:

Advance an open economy to allow new entrants to enter it, easily and quickly without bureaucracy; increase access to strategic resources, as the lack thereof cripples many start-ups and SMEs trying to launch and scale; make empowering start-ups and SMEs a national priority – at this stage, most stakeholders just pay lip service to empowering this sector and not many really understand the intrinsic dynamics of the start-up/SME environment and market; and lastly, develop a clear and coherent understanding of the country’s consumption and production patters (i.e. who buys what, when, where and why) and use this data to create opportunities for new entrants, while advancing the country’s competitive edge.

After watching a recent insert on ENCA, I would also like to add a 5th to this article. Many analysts agree that much of the education system’s content is quickly becoming redundant and not usable or relevant to today’s market characteristics and its job requirement criteria. Stats also show, depressingly, that what most young learners read, they don’t comprehend.

So, once we committedly dive in and address these issues and have the right personnel in place at various Development Financial Institutions (DFIs) and agencies that support small businesses, then we will be a lot closer to eradicating (or even just lessening) our unemployment rate. However, I still stress that we must not ignore and disregard, but rather applaud the various existing government initiatives like the Expanded Public Works Programme (EPWP) and the Youth Employment Service (YES) programme, among others. But the reality remains that these are all short-term initiatives and do not directly address the long-term challenges.

For example, just three months ago, a major financial service provider enlisted a few thousand youths to gain hands-on work experience, which was much lauded. Yet, just last two weeks, the same company announced cutting some 1500 jobs. The solution simply lies with a masterfully-crafted strategy for SME support.

Since last week’s justifiable panic and media mayhem, I have read many articles and opinion pieces, watched numerous interviews and attended a plethora of events, most of which professed that doomsday is nigh for South Africa. Even some articles spoke of many investors moving their money offshore.

But amidst this, and being a glass half-full guy, I think of hope, I think of success, I think of opportunities and I believe that if any country can get it right, it’s South Africa.

The reason being, is that our young population remains hungry and eager for a chance, a break so to speak – and they are not lazy, they are desperate for self-worth. I believe our young people do not want to be in the streets. We have a reasonable amount of infrastructure, which is easily upgradeable and there are existing resources available to support SMEs, which can also be increased. Our challenge is how to implement and who must lead this deployment into, and in collaboration with, the various private/public sector agencies and civil society. The deployment of this should be strategic and sustainable.

Over the weekend, I read an interesting opinion piece, authored by Andile Sangqu, the head of Anglo American, in which he listed the Indlulamithi Scenarios for 2030 and I think that it genuinely inspires hope. He wrote, “Using a new barometer that analyses existing datasets, Indlulamithi has now shed light on which scenario the country is most trending towards. And it is clear that if South Africa maintains its current status quo, it’s heading towards the worst-case one”. He mentions that social cohesion must exist amongst us. One of the underpinnings of Indlulamithi is that South Africa’s economic future is inextricably linked to its levels of social cohesion. Social cohesion refers to the degree of social

integration, inclusion and mutual solidarity in communities. As a diverse country with generational burdens of division and inequality, South Africa depends on this cohesion for progress. Without it, any economic development and job creation strategies will flounder.

He continues, “In Gwara, for example, South Africa’s low economic growth is the direct result of poor social capital. In this scenario, weakened leadership capacity causes all-time low levels of trust among fellow South Africans, immigrants, the state and social institutions”.

At this point in time, the country is facing a big trust deficit. We do not trust one another and even those entrusted with resources for programmes or capital to support SMEs do not even trust either the providers of those programmes or the SMEs themselves. We live at a time where we need to rebuild trust and give hope to the hopeless. Hope is crucial to give our dreams a chance.

In ending, I think that the country must create a private lobby group to invite and secure international investment from start-up focused VCs and other financial providers. This initiative is crucial for South African start-ups because right now most of these foreign VC investments are going to Nigeria, Kenya, Ghana, Egypt, Rwanda, Senegal, Ethiopia, etc. Countries and Institutions with grant funding are now looking elsewhere to deploy these grants. South Africa can no longer afford to miss the boat because there are SMEs that still require this support.

We have the potential and capacity – and it’s right in front of us. I’ve always believed that Africa’s development trajectory must be shaped by South Africa and Nigeria, the continent’s two economic powerhouses. Yet, I guess other African countries are no longer waiting for anyone to shape their future, they are just doing it themselves. Leaders are waking up to the reality that they must leave a legacy for their children, country and continent. The competition for foreign investments is high and we must compete with 53 other African countries for these resources. I must say, it’s not as easy as it used it to be and the goal post is certainly changing.

As the American entrepreneur Gary Vaynerchuk said, “People are better at creating a ceiling for themselves than any outside force”. We must not blame anyone; our challenges can be solved if we do things right and do things together.

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

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