Shocking youth unemployment figures revealed
The latest statistics have revealed that youth unemployment rose to 54.70% in the fourth quarter of 2018, up from 52.70% the previous quarter.
Kamal Ramburuth-Hurt, chairperson of Rethinking Economics for Africa at Wits University, said more than 60% of the youth were unemployed.
The government, he said, would require some “creativity” to alleviate the scourge.
Ramburuth-Hurt reasoned that the government should invest and develop industries aligned to the much vaunted Fourth Industrial Revolution.
“If the skills that are being developed at learning institutions do not match the direction in which the economies of the world are, South Africa will simply stagnate in its endeavour to create jobs.”
The government, he said, needed to have sound plans. “We must create jobs that are useful to growing the economy.”
He said it was important for the government to identify critical sectors that could equip young people with “relevant skills relevant to these sectors”.
In its election manifesto, the ANC committed to investing in sectors such as mining and manufacturing and expanding import markets.
Ramburuth-Hurt said investing in mining was useful in some instances, and that it's not a sunset industry in its entirety.
However, Ramburuth-Hurt cautioned that South Africa needed to develop industries that processed raw materials locally, so that the country could draw more benefits.
The ANC also promised to reform sectors with the greatest potential for growth and job creation.
It further committed to doubling the annual rate of employment by creating 257 000 jobs per year.
Wits economist Andrew Lawrence argued that effecting a guaranteed employment scheme for unemployed young people would cost the country R380 billion.
“Some estimates suggest that one percentage point of growth could be added for every five percentage point drop in unemployment.
“Thus, while employing 5% of the unemployed costs about R52.5 billion, 1% GDP growth adds R55 billion,” he said.
Lawrence termed the situation “hopeless,” adding that many unemployed young people were categorised as “not in employment, education or training”.
In an endeavour to curb youth unemployment, the DA, in its election manifesto, committed to pilot a special youth job-seeker rental subsidy voucher.
This would be aimed at graduates whose skills were in demand in cities but did not have the means to access cities.
“The voucher would be capped at one year and will only be valid for a period of two months after the beneficiary gains employment.
“This will enable young people access to a variety of housing options, given that landlords are willing to sign up for the voucher programme,” it explained
Ramburuth-Hurt said it might be a difficult endeavour to pursue given that there were so many competing priorities in South Africa.
Ann Bernstein, executive director of the Centre for Development and Enterprise, said even though the “DA is not perfect” there had been signs of economic growth.
“The DA is not perfect, but it has had an impact - the Western Cape government grew its economy and jobs. There is empirical evidence of how to move people out of poverty.”
The EFF, in its election manifesto, promised to ensure that all products and goods that contributed to state construction projects were locally produced, except in exceptional cases, where there was no capacity to produce locally.
The EFF also proposed the creation of special economic zones in various regions of South Africa.
It said investors would gain special economic zone benefits such as tax incentives if they employ and sustain a minimum of 2000 jobs.