A SOCIAL COMPACT FOR YOUTH EMPLOYMENT

Creating jobs for young South Africans is the most urgent and important task of the moment. It must be at the centre of all the efforts of social partners to grow and transform the economy. It should guide all the policies and programmes of government. Activities that create jobs should be supported; activities that have the potential to destroy jobs should be shelved. In its January 8th Statement, the ANC called for a social compact that unites government, business, labour and civil society around a programme for growth, job creation and transformation.

It said: “While this social pact will be wide-ranging, it will need to focus in particular on youth unemployment, whose devastating impact on young people is cause for major concern. Despite the progress we have made in expanding access to education, millions of young people do not have the skills that the economy needs. Even those with skills lack the work experience and readiness that most employers look for.”

This social compact is already taking form. The constituencies in Nedlac have begun preparations for a Jobs Summit to take place later this year, which is expected to agree on a range of extraordinary measures to get millions of young people into employment as a matter of urgency. The process will draw on the insights, energy and capabilities of a broad section of South African society to ensure that this is a truly national undertaking. The input of young people will be critical in making sure that the Jobs Summit is meaningful and leads to the creation of job opportunities for youth.

This task is so important not only because of the extent of the challenge – more than a third of South Africans between 15 and 34 years are unemployed – but also because a massive increase in youth employment is central to our efforts to defeat poverty, grow the economy and improve livelihoods. Employment is the most direct way for young people to escape the cycle of poverty and to achieve a better standard of living. More broadly, it contributes to the development of communities, reduces inequality and promotes transformation.

It is necessary to ensure that both men and women have equal opportunities to find employment and to advance within the workplace. This will go a long way to improving the economic position of women and thus their position in society. It will empower women and contribute to gender equality.

The extent to which South Africa addresses youth unemployment will largely determine the economic and social path that the country takes. Because South Africa is such a young country – more than half of all South Africans are under 35 years – it has enormous potential to become a centre of production, innovation and growth. South Africa has an opportunity to benefit from the ‘demographic dividend’, where a country’s productive capacity expands as more young people enter the workforce in large numbers. This contributes to faster and more sustained economic growth, while ensuring that the benefits of the growth are more broadly shared.

However, South Africa will not benefit from the demographic dividend if it is not able to create work for young people, to equip them with the skills they need and ensure that they are prepared for the world of work. Unless we move quickly to reduce youth unemployment, the economy will decline, poverty will deepen and social stability will be gradually eroded.

That is why the next few years matter. We need to move quickly and with purpose to create more jobs in those parts of the economy where young people, many with few skills, will find employment. There needs to be detailed work, as part of preparations for the Jobs Summit, to identify where jobs can be created and agree on measures to develop such industries. Such job creation depends on a growing economy, which depends on far higher levels of investment. Guided by the resolutions of the ANC 54th National Conference, government has undertaken a massive investment drive to reach out to local and international investors and to improve the ease of doing business in South Africa.

While it is essential to generate investment, any significant growth in youth employment depends on improving the skills of young South Africans. Children need to receive quality education from early childhood and need to remain in school through to matric. Even as the matric pass rate improves, it is necessary to reduce the drop-out rate. More matriculants need to get passes that enable them to proceed to universities, TVET colleges and other institutions of higher learning.

The implementation of the ANC 54th National Conference resolution to provide fee free higher education to students from poor and working class backgrounds has begun, with students entering first year study receiving a comprehensive bursary from the state. As it is progressively phased in, this policy promises to dramatically change the level and distribution of skills in the country. Not only will the economy have more of the skills that it needs, but it will be able to find those skills among the children of the poor.

Another critical task, which is receiving the attention of government and the private sector, is ensuring that institutions of higher learning, particularly TVET colleges, produce relevant skills that are needed in the economy. There are several initiatives to ensure that companies are more integrally involved in determining skills priorities, designing courses and providing workplace experience for students. We should follow the example of other countries, such as Germany, where the theoretical aspect is reinforced through practical artisan training.

In addition to these efforts, there is a need to create pathways for young people into employment now. Young work seekers face many obstacles. Most do not have access to networks, are not aware of opportunities, live far from places of work and lack suitable work experience. In response to this challenge, government, business and labour have launched the Youth Employment Service initiative, which provides one-year work experience opportunities for unemployed youth in participating companies. Alongside government’s Employment Tax Incentive, this initiative aims to reduce the cost and risk of employing young people with little work experience. Together with public employment schemes like the Expanded Public Works Programme and the set-aside of jobs for youth on major infrastructure projects, there is great scope for increasing youth employment now.

There is a significant challenge of graduates who cannot find employment, and whose relative lack of experience discourages companies from employing them. These graduates constitute a significant untapped pool of skills and talent. Companies and public sector institutions need to understand that it is in their best interests to take on these graduates and realise the great potential that they possess.

These efforts all depend on effective collaboration between the social partners and the mobilisation of broader society. The challenge of youth unemployment requires a response that draws on the energies, talents, resources and attention of all South Africans. This will largely determine whether our country enters a new era of inclusive growth and development, or whether it is overcome by the legacy of the past. We therefore have no time to waste and no effort to spare. Now is the time to build a social compact for youth employment.

Cyril Ramaphosa

 

THE NEW DAWN BELONGS TO ALL SOUTH AFRICANS

In the 100 or so days since the country set out on a path of renewal and rebuilding, South Africans have enthusiastically embraced the new dawn that we spoke of in the State of the Nation Address. They have taken upon themselves the responsibility to ensure that the new dawn brings real changes in the lives of the people.

This is a signal of renewed hope among South Africans that the country now has an opportunity to confront the challenges it faces and to make progress in building a more inclusive and prosperous society. Everywhere we go around the country, people say they want to be part of making change happen. It is a sentiment that is shared even by many of those we meet outside the country. The anecdotal evidence of this new mood is reinforced by the results of recent surveys. Research company Ipsos found that nearly two thirds of voters, or 63%, believe the country is going in the right direction. This is a significant improvement from a study in November 2017, where two-thirds of South Africans felt the country was going in the wrong direction.

This should give encouragement to the ANC, which, in outlining its tasks for the year in the January 8th Statement, said:

“The ANC will work with renewed determination to unite all South Africans – regardless of race, class or affiliation – around a shared vision of fundamental transformation. We need to restore the unity of purpose and sense of common destiny that was forged under the leadership of Nelson Mandela.”

We now have a valuable opportunity to build a powerful movement for social and economic change that draws on the energies and capabilities of a broad cross-section of South Africans. Most of our people accept that the future of the country requires a growing economy that is inclusive and a society that is more equal, and are prepared to be part of the effort to achieve it.

There has been some debate about the content of the ‘new dawn’, whether it is simply a slogan, or whether it has substance. The new dawn is real and tangible. It consists of clear priorities and tasks, many of which are outlined in the ANC’s January 8th Statement and elaborated in the State of the Nation Address.

A central priority in the new dawn is the creation of jobs on a significant scale, particularly for young people. This is really the only way to reduce poverty and inequality in a meaningful way. Among other things, this means that we need to grow our economy at a much faster rate and attract far greater levels of investment. For this, we need to be prepared to take extraordinary measures.

The Jobs Summit that is being held later in the year therefore needs to emerge with a social compact among all stakeholders on the contributions that each needs to make to ensure that the obstacles to job creation are removed. Preparations for the Jobs Summit are taking place alongside an ambitious investment drive that seeks to generate at least $100 billion in new investment over the next five years. This is far more than South Africa has managed to achieve in recent times and will take the country significantly closer to the 2030 targets of the National Development Plan.

Investment, from both domestic and foreign sources, is necessary to stimulate growth and create opportunities for new jobs. As the World Bank notes in a recent diagnostic report on South Africa: “Greater investment is needed to overcome exclusion.” As confirmation of the January 8th Statement, the same report notes, that for investment to increase, South Africa needs to improve investor confidence through, among other things, greater policy certainty, effective steps against corruption and crime and making it easier to do business.

Another important priority in the new dawn is decisive action against state capture and corruption. This has become a major concern for all South Africans. Not only does it deprive the state of resources that should go to improving the lives of the poor, but it also weakens public institutions and significantly erodes confidence among investors, business people and citizens more broadly. The economic effects of state capture have been dramatic, and it is therefore critical that it be stopped and those responsible held to account. The establishment of a commission of inquiry headed by Deputy Chief Justice Zondo has begun its work to investigate all allegations that have emerged of the private capture of public institutions. It expects to start public hearings in August. This is taking place alongside the work of law enforcement agencies and steps being taken by government to strengthen key institutions like SARS and clean up state owned enterprises.

Other constraints on investment include the unequal distribution of resources and low skills levels. These are the consequence of devastating apartheid policies, which the Constitution requires that we correct. Consistent with its historic mission, the ANC has prioritised the accelerated redistribution of land, both in rural and urban areas, to reduce inequality and poverty, increase agricultural production and realise the economic potential of this national asset. The ANC’s National Executive Committee recently adopted a far-reaching programme of action on land reform and agrarian revolution that will take this process forward.

Alongside ongoing work to improve the quality of our basic education outcomes and expand access to early childhood development, we have begun the phased introduction of fee free higher education for students from poor backgrounds entering their first year of study. This will significantly improve access to higher education for South Africans who would otherwise be denied the opportunity, expanding our country’s skills base and contributing to economic growth and development.

Over the next few editions of ANC Today, we will further discuss some of these priorities of the new dawn. They constitute an essential part of the shared vision of fundamental transformation around which we need to unite all South Africans. Working together over the last 100 days, we have made important progress along the path of renewal, but there is still much to do. By working together as all the people of South Africa, we can ensure that the hopes and expectations of the new dawn are realised.

 

Cyril Ramaphosa 

 

President of the African National Congress