Addressing South Africa’s youth unemployment crisis
23 Jan, 2024

Kelly Joshua, Head of Education Investing for Old Mutual Alternative Investments


Innovative new curricula options and independent impact investment in schools can play a vital role in addressing skills imbalances, argues Kelly Joshua, Head of Education Investing for Old Mutual Alternative Investments. 


South Africa’s pressing youth unemployment crisis demands urgent solutions. One area that is pivotal to addressing this crisis lies in the education system.


Collaborative partnerships between the public and private education sectors are needed to successfully implement reforms that will adequately prepare future generations to meet the skill-intensive demands of the evolving world of work.


There is a pressing need for enhanced learning environments that are accessible, in particular in low-income communities. Although significant progress has been made towards achieving the essential education outcomes vital for youth employability and economic growth, statistics from the Stats SA Quarterly Labour Force Survey (QLFS) continually show that youth aged 15-34 are more vulnerable compared to older age groups.


The youth unemployment crisis is deepening 


Unemployment has been inordinately high for many years and is one of the country’s significant socio-economic challenges. According to the latest QLFS Q3:2023, there are 4.6 million unemployed youth in the country. Youth unemployment remains high at 43.4%


In addition, the year-on-year comparisons indicated that the unemployment rate decreased for all education levels, with a significant decline observed among graduates (down by 2,2%). This population is, therefore, disconnected from the labour market and opportunities that promote future employability.


Despite the marginal economic recovery in 2022/23, the volatility has persisted due to rolling power outages and increased energy and transport costs, leading to high food inflation and elevated interest rates. Companies have had to streamline operations and find innovative technological solutions to cut overheads, leading to a further constrained labour market, especially for unskilled and entry-level jobs.


Moreover, the dismal youth employability rate reflects a national skills crisis, manifesting a mismatch between the youth skills pool and in-demand technical skills. The education system needs to be further enhanced to ensure learners have the much-needed skills and capabilities aligned with the industry’s oncoming rise of technology-based innovation.


Challenges within the education system 


Literacy and numeracy indicators amongst school learners are worrisome. It is noted from the 2023 Background Report for the 2030 Reading Panel that many students leave Grade 1 without knowing the alphabet. Similarly, 82% of Grade 4 students struggle to read for meaning.


Trends in International Mathematics and Science Study (TIMSS) 2019 further highlight the disparity, with only a third of Grade 5 learners demonstrating basic mathematical and science knowledge.


Numerous studies show that probably 50% of our Grade 8 learners have a Grade 4-level understanding of certain concepts in mathematics.


A new law recently introduced by the Department of Education (DoE) allows learners to leave school at the end of Grade 9 with a General Education Certificate (GEC) to reduce failure, repetition and drop-out rates in schools. While the GEC is not regarded as an exit point for school but a pathway to one of three streams – academic, technical vocational and technical/occupational – it is another step towards solving the skills deficit.


While this law aims to improve the quality and efficiency of education in the country, it requires careful planning, implementation and support from all stakeholders involved. The positive spin-off of the GEC is the intended changes to the curriculum, including technical occupational subjects such as electrical, mechanical, civil technologies and engineering graphics and design. It will also introduce new topics such as technical mathematics and technical science.


The first field trial for the GEC is scheduled for completion by 2024 and will be rolled out to all schools by 2025. The concern is that the reform does not compel learners exiting Grade 9 to continue with the academic stream or to enrol in a Technical and Vocational Education and Training (TVET) college or a skills development programme from a Private Training Provider.


At present, many learners exit the system with a Grade 9 pass, but are often considered very young for employability. Even those with a National Senior Certificate (NSC) without a Bachelor’s Degree pass in mathematics and science are not eligible to pursue a tertiary qualification in the disciplines that are in demand. They are, therefore, no better off than learners who do not complete matric. Additionally, these youth still need to be physically, emotionally and psychologically developed for the world of work and need more essential life skills, behavioural competencies, and soft skills.


Private sector impact investment in education 


Fundamental to workforce readiness is the basic education system. The incongruence between youth skills and the sought-after skills in fields like Finance, IT, Engineering, and Architecture are characteristic of the 4th Industrial Revolution (4IR).


Enhanced education significantly boosts employment prospects, but this hinges on alignment between acquired skills and job requirements. Learning environments and teaching strategies must evolve to support personalised learning for creativity, innovation, and problem-solving.


In addition, the quality of education in low-income and rural communities needs to catch up to urban areas and must be prioritised.


The private sector has taken significant strides to ease the pressure on the education system and has provided a platform for reform by affording these communities access to quality and affordable alternatives. Through education-focused investment funds, the education sector has prioritised efficiency in delivering quality education and infrastructure.


Through its two education impact funds, Old Mutual Alternative Investments (OMAI) currently  supports 45 schools across South Africa, catering to 23,000 learners and employing 1600 teachers. Focusing on affordability and quality education outcomes, these investments are mandated to primarily target lower-income communities to foster local employment, gender equality, and environmental sustainability.


To address the disparity between education and market needs, the curriculum has, over time, been adapted to emphasise industry-relevant skills and offers robotics, coding, sound engineering, hospitality, and many more programmes such as career guidance, work readiness training and placement, and entrepreneurship development. The portfolios consistently surpasses the national average pass rates, demonstrating the efficacy of private sector efficiency and expertise.


While not a complete panacea for youth unemployment, these steps will go a long way towards addressing the skills and youth unemployment crisis. It is our hope that they serve as a blueprint for safeguarding the potential of future generations.







@Kelly Joshua
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