Liezel Gordon, Client Engagement and Team Lead at Metropolitan GetUp
“An economy is a country or region’s system of production, distribution and consumption of goods and services. It includes all the activities that contribute to the overall wealth and well-being of a nation. These activities include businesses, trade, industries and financial transactions. It’s driven by the interaction between households, businesses, government and individuals.”
Gordon goes on to explain that South Africa is a complex country with many factors impacting and influencing the economy. “Our country has the highest Gini coefficient in the world, which refers to the disparity between rich and poor stemming from the historical legacy of apartheid. This unequal distribution of wealth and opportunities creates social inequalities, which result in economic imbalances.
“Uncertainty about economic policies can create instability and affect investor confidence. Inconsistent policy implementation and delays in decision-making hinder economic growth and discourage both local and foreign investment.
“In addition, high unemployment rates – particularly among the youth – driven by limited job opportunities, skills shortages and mismatches, and a large informal sector present further economic challenge.”
She adds that South Africa is riddled with energy and infrastructure challenges, which continue to disrupt business operations. “Moreover, high levels of government expenditure, systemic inefficiencies, and financial mismanagement have put pressure on public finances and economic stability.”
Are young people the victims of all this?
Sadly, a struggling economy does put youth at a disadvantage. The education system in South Africa is faced with challenges in delivering quality education to all citizens. As a result, there is a significant skills gap in the labour market, making it difficult for young people to find suitable employment opportunities.
“Moreover, sluggish economic growth, high unemployment, lack of job opportunities and substandard skills make it very difficult for young people to successfully enter the job market.”
However, Gordon says that while the challenges facing the South African economy are significant, “we should avoid painting young people solely as victims because this disempowers them.
“It’s certainly not all doom and gloom – many young individuals are actively engaged in finding solutions, pursuing entrepreneurship, and driving innovation in and outside of our country. While we may have a skills gap, we do not have a talent gap!”
How do I, as a young person, influence the economy?
You might be thinking, with all these big factors at play, how could I possibly influence the economy? “While your impact might seem small in isolation, collectively, the choices and actions of individuals shape the overall economic landscape of the country.”
She shares several examples of how you influence the economy:
- By buying certain products or supporting specific industries, you contribute to their growth and success. For example, if you buy locally-produced goods, you support local businesses and contribute to job creation.
- When you enter employment, you are part of the labour force. Your skills, productivity, and employment contribute to the overall production capacity and economic output of your company, and in turn, the country. Your income also enables you to participate in the economy as a consumer.
- When you work and earn a certain income, you are obliged to pay tax. This revenue helps fund government programmes and public services, such as infrastructure development, healthcare, education, and social welfare.
- If you decide to start a business or become self-employed, you create jobs, generate income, and introduce new products or services, thus contributing to the growth of the economy.
- Our youth are very entrepreneurial and gigging or side hustles are becoming common ways for them corner or on social media, what you are doing not only contributes to your income but also to growing the economy.
- If you make enough money to save, your investment choices affect the availability of capital in the economy. By saving money in banks or investing in financial instruments, you contribute to the pool of funds that businesses can access for expansion and investment purposes while growing your own wealth.
How youth can thrive in a turbulent economy
The current economic landscape is a rocky one, but Gordon says that there are proactive steps that young people can take that’ll help them thrive:
- Invest in you: Pursue continuous learning, be it formal education, vocational training, or skills development programmes that align with the demands of the job market. South Africa is a country that is rich in raw materials – artisan skills can help us produce and refine these raw materials into products that boost economic growth. Education is not just about classroom training – the ability to use your hands and physical strength to do work is also a significant asset to yourself and to our economy. Whatever type of skilling you choose, this can increase your chances of securing meaningful employment or better equip you to start your own business.
- Take advantage of available resources: There are many resources designed to support young entrepreneurs and job seekers, such as government programmes, incubators, and youth-focused initiatives. These resources often provide mentorship, funding, training, and networking opportunities. You can also find a mentor who is willing to share their knowledge and help you get a foot in the door.
- Skills are critical but mindset and attitude are even more important. Your willingness to contribute, make a difference and do good for the country will go a long way towards helping you thrive.