Expectation vs reality: Will National Budget give young people the support they need?
19 Feb, 2024

Nkosinathi Mahlangu, Youth Employment Portfolio Head

 

Youth employment portfolio head at Momentum Metropolitan Nkosinathi Mahlangu discusses what he would like to see in the upcoming Budget Speech.

 

 

In this year’s State of the Nation Address (SoNA), President Cyril Ramaphosa painted a very alluring picture, but one that could, unfortunately, be likened to an “expectation versus reality” meme.

 

 

In his version, the “expectation” one, the President laid out the South Africa we all hope for. He told the story of Tintswalo, democracy’s child. Tintswalo was the fortunate beneficiary of a well-functioning state: born in 1994 at the birth of democracy, she received government-subsidised housing, completed her studies at a TVET college and went on to find employment and a better life for herself and her family.

 

 

However, the “reality” is that – in the South Africa we currently have – 30-year-old Tintswalo is probably jobless and with little in the way of future career prospects…like 43,4% (Stats SA Q3: 2023) of our youth.

 

 

This high rate of youth unemployment remains a glaring problem, which the President acknowledged in his address. Entrepreneurship has been posed as a potential solution to this challenge, allowing young people to create their own income-earning opportunities while generating more jobs and reviving the economy.

 

 

Yet, between 70% – 80% of small businesses in South Africa fail within five years, according to research by the University of the Western Cape, while last year saw the closure of over 1500 businesses across the country. And while some young people believe there is nothing better than working for themselves, our Momentum Metropolitan research has revealed that upon leaving school, many young respondents would prefer to be employed by a reputable corporate, rather than start their own business.

 

 

Not everyone wants to be a business owner, nor should we assume that entrepreneurship is the only answer to our youth unemployment conundrum. I believe that we need to take a multi-prong approach to tackling this issue, and both private and public sectors need to come to the party.

 

 

While SoNA was a bit thin on specifics, this week we’re looking to the Finance Minister to lay out the National Budget for the year ahead, providing more clarity around the details and the allocation of resources needed to eradicate youth unemployment.

 

 

What do I want to see in this year’s Budget?

 

 

Removing the hurdles for SMEs

 

 

Removing the red tape hindering small businesses was one of the major themes of SoNA 2023, and it would be good to see some strong action here.

 

 

While many of these regulatory requirements are difficult to remove in the short term, providing better access to funding and compliance resources for SMEs and start-ups can help, specifically those owned by young people who may lack the relevant knowledge or experience in these areas.

 

 

Loadshedding is another challenge severely crippling youth-owned SMEs. While big enterprises have found a way around loadshedding, investing in costly generators, inverters and solar, most small businesses don’t have the resources to do this. An acknowledgement of this in this year’s Budget, and the necessary resources and plans that will help young people better navigate this stumbling block, would be welcomed.

 

 

Shifting the focus from job opportunity to job placement

 

 

The President made mention of job opportunities at SoNA, but there is a huge divide between ‘opportunity’ and ‘placement’. We need to shift our focus to making sure young people successfully enter – and stay – in the workplace.

 

 

At Momentum Metropolitan, we work with various non-profit organisation (NPO) partners, and job placement is a critical deliverable for us. It is not enough to train youth and send them out on their own – we need to ensure that the path is cleared for them to enter employment, which we do via our placement partners. We also continue to track those placed to ascertain their progress, and assess job retention. Government needs to do the same, and I would like to see some indication of this in this year’s Budget.

 

 

More collaboration with private sector

 

 

We would like to see government articulating a solid plan where private public partnerships could thrive. This will also give corporates a role to play in creating job opportunities and encourage various sector players to partner with SMEs as empowerment partners, giving them the much-needed exposure and market access opportunities.

 

 

For example, our company has recently partnered with My Dough, a platform for young entrepreneurs, helping connect them with resources, skills, and networking opportunities through a series of initiatives, workshops and forums. With government’s support added to the private sector’s resources, we could elevate these kinds of initiatives to new heights.

 

 

Procure from youth-owned enterprises

 

 

Both government and business need to put their money where their mouth is and focus on the support of youth-owned enterprises in their procurement chains, helping grow these SMEs into flourishing and sustainable enterprises.

 

 

 

ENDS

 

 

Author

@Nkosinathi Mahlangu, Momentum Metropolitan
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