“STRATEGIES TO SUPPORT YOUTH EMPLOYMENT AND ENTREPRENEURSHIP IN SOUTH AFRICA”

1. LOCAL ECONOMIC DEVELOPMENT AND YOUTH EMPLOYMENT WORKSHOP 25th, 26th and 27th July 2012 Docklands Hotel, Durban, South Africa “STRATEGIES TO SUPPORT YOUTH EMPLOYMENT AND ENTREPRENEURSHIP IN SOUTH AFRICA” Siviwe Mkoka National Youth Development Agency Executive Manager: Research and Policy Cluster

2. OUTLINE OF PRESENTATION 1. Background- Rationale- Why Youth Economic Participation 2. Participation of Youth in the Labour Market in RSA 3.Policy Environment- South African Government Efforts 3.1 NYP 2009-2014, NYDA Act Number 54 of 2008 3.2 Other government policies and programmes specifically geared for Youth 4. Economic Activity of South African Youth in 2012 4.1 In and out school youth in RSA- An ignored fact 4.2 State of Youth Entrepreneurship 5. Conclusion and Recommendations

3. 1. Background • The World Bank report said “The employment situation is especially challenging for the younger labour force, residents of townships/informal settlements and rural areas, and the non-white segments of the population” , Reuters, July 24, 2012 • 1.2 Rationale- Why Youth Economic Participation • Economic participation – key to poverty alleviation and redistribution of resources; • Economic participation takes two primary forms • Participation in the labour market (Jobs) • Entrepreneurship; • Entrepreneurship is central to economic growth- to eliminate just 25% unemployment rate RSA needs 7% GDP growth- Impossible!; • Data shows that SA has very low youth entrepreneurship; • There is a high number of youth who are not in employment or attending an educational institution.

4. 2. Participation of Youth in the Labour Market in RSA Official or formal Statistics 17.66 Million- South African Labour force estimate; 74% (13.13 Million)- Total labour force employed; 25.7% (4.36 Million)- Total labour force unemployed; 73% (3.18 Million)- Contribution of Youth to unemployed South Africans; 1.3 Million Youth- Contribution to discouraged work seekers; Age 35- Excluded in these calculations; 74% (15,5 million) out of 21 million youth- number of South African youth that are economically inactive; 13,5% (2,8 million)- Official number of South African youth that are unemployed; 12,6% (2,6 million)- South African Youth that are employed; 300 000- estimated number of graduates in South Africa that are unemployed????

5. 2. Participation of Youth in the Labour Market in RSA Telling Statistics for Youth Development and Growth of RSA • 77% (38.5 Million) of 50 Million- South Africans under age 35; • 21million of 50 million-South Africans between ages 14 and 35 (Youth); • $408.24 Billion - Gross Domestic Product (GDP) of South Africa in 2011; • 3,1%- South Africa’s GDP growth forecast, November 2011; • 2,5%- South Africa’s adjusted GDP growth forecast, July 2012; • 32,8 million- South Africans between ages 15 and 64, 2012; • 18 million- Official number of economically active South Africans; ECONOMICALLY ACTIVE SOUTH AFRICANS- 32,8 MILLION??? • 13,13 million- Employed South Africans out of the economically active citizens UNEMPLOYED SOUTH AFRICANS- 22,7 MILLION???

6. 3.Policy Environment- South African Government Efforts 3.1 NYP 2009-2014, NYDA Act Number 54 of 2008, Draft IYDS, NYDP 3.2 Other government policies and programmes specifically geared for Youth

7. “Young people are capable, when aroused, of bringing down the towers of oppression and raising the banners of freedom” (Nelson Rolihlahla Mandela, Bastille Day, 14 July Paris Speech, 1996) PRE 1994 16 June 1976, a day that changed the course of South Africa’s history: Photo, Hector Pietersonmuseum POST 1994 51% of South Africans between 15 and 24 are unemployed: SAIRR, 2011: Photo by Independent News Papers

8. 3.Policy Environment- South African Government EffortsNational Youth Policy (NYP) 2009- 2014 In a nutshell, the NYP 2009- 2014 aimed to address and recognise the following: • Address holistically the developmental needs of an ever increasing SA youth population; • Recognise that youth are beneficiaries and agents of change in South Africa; • Recognise the need for development and empowerment of disadvantaged and marginalised youth categories; • Recognise and call for a nationwide response, that of an integrated approach, mainstreaming and coordinated package of innovative developmental products and services for youth. • Desired outcome- Empowered youthwho are able to realise their full potentialand understand their role and responsibilitiesin making meaningful contributionto their own development, that of their immediate communities, and broadly to the society.

9. Government • Departments (National and Provincial) • National Youth • Development Agency • Local Government • Youth focal points/ • units/ desks • in Municipalities • CSOs: • NGOs, FBOs • CBOs, IHL, Parastatals • etc. • Private • sector NYP 2009- 2014 recommended approach and coordination of youth development 3.Policy Environment- South African Government EffortsNational Youth Policy (NYP) 2009- 2014

10. 3.Policy Environment- South African Government EffortsNational Youth Policy (NYP) 2009- 2014 • Key strategic focus areas of the NYP 2009-2014 • Economic Participation- Employment and entrepreneurship; • Education and Skills Development (In and Out of school); • Health and Well Being; • Social Cohesion, National Youth Service and Civic Participation; • Sports and Recreation; • Youth Work.

11. 3.Policy Environment- South African Government EffortsNYDA Act Number 54 of 2008 1993- National Youth Development Forum (NYDF) was formed- decided on the SA approach of youth development; • NYC vs Ministry- rationale being mainstreaming and integration approach to youth development; • 1996- NYC formed- Key Mandate of ensuring that youth development is not left in the periphery but integrated and mainstreamed into government policies and programs; • Further Role of NYC- to monitor and evaluate government departments, assess the extent to which mainstreaming was happening and also lobby and advocate for youth issues to be prioritized by all sectors of economy; • 1997- South African Youth Council- Civic Society (SAYC); • Late 90’s- debate about greater economic participation of youth; • 2001-Umsobomvu Youth Fund (UYF) through Demutualisation Act; • 2008- NYDA Act Number 54- 2009formation of National Youth Development Agency (NYDA). NYDA’s Mandate The objects of the Agency as per the National Youth Development Act Number 54 of 2008 are simplified as follows: • To develop an Integrated Youth Development Strategy (IYDS) for South Africa; • To co-ordinate the implementation of an integrated national youth development policy; • To develop principles and guidelines for the implementation of an integrated national youth development policy and make recommendations to the President regarding such principles and guidelines; • To co-ordinate, direct and monitor the implementation of such principles and guidelines as a matter of priority; • To initiate, co-ordinate, monitor and evaluate all programmes aimed at integrating the youth into the economy; • To facilitate economic participation and empowerment of the youth; • To guide efforts to redress the imbalances of the past relating to the various forms of disadvantages suffered by the youth generally or specific groups or categories of persons among the youth; • To promote a uniformity of approach by all organs of state, the private sector and non-governmental organizations, to matters relating to or involving youth development and; • To make any recommendations to the President relating to any other matters which may affect the youth.

12. 3.Policy Environment- South African Government EffortsOther government policies and programmes specifically geared for Youth • Macroeconomic policy – GEAR, ASIGSA, New Growth Path etc; • Education and Skills Development, SETAs, FET colleges; • Internships; • Job Facilitation- JOBS Fund, EPWP, NARYSEC; • Wage subsidy? • Support for entrepreneurship- SEDA, KULA, NYDA, PLAS, Infrastructure Plan of Government.

13. 4. Economic Activity of South African Youth in 2012 4.1 In and out school youth in RSA- An ignored fact; 4.2 State of Youth Entrepreneurship.

14. 4. Economic Activity of South African Youth in 2012- In and out school youth in RSA- An ignored fact

15. 4. Economic Activity of South African Youth in 2012- Narrow Youth Unemployment (15–35) by Province, 2007–2011

16. 4. Economic Activity of South African Youth in 2012- Percentage of Youth Living in Households with a Per Capita Income of Less than R570 per Month by Age Group and Province, 2010

17. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Age distribution of small business ownership, 2010

18. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Youth owned businesses by province, 2010

19. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Business ownership and education

20. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Sources of Start-up Capital for Youth Entrepreneurs, 2010

21. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Skills Training resources of small business owners in SA 2010

22. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Awareness of business support organizations

23. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Motivation to start a Business

24. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Obstacles to grow a business (16-35yrs)

25. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Business registration by Age Group

26. 4. Economic Activity of South African Youth in 2012- State of Youth Entrepreneurship Business owner’s Financial Records keeping by Age Group, 2010

27. 5. Conclusion and Recommendations SA population is getting younger and younger; National statistics on the labour force indicate that the majority of the unemployed labour force are youth; Business ownership amongst the youth is very low compared to the proportion of youth population in the country; Most of youth entrepreneurs have some matric or high school education; Sources of start up funding of young entrepreneurs is from their savings or family; Most young entrepreneurs are self taught and not aware of the institutions that provide entrepreneurship support; Most of them started their businesses because they could not find a job or saw an opportunity to make money; The biggest obstacles for their businesses are space, finance and competition.

28. Siviwe Mkoka|ExecutiveManager| Research and Policy National Youth Development Agency|11 Broadwalk Avenue| Midrand |1685 | Tel: 011 651 7000 (Switch Board)/ 011 651 7150 (Direct Line )/ 071 712  8394 (Mobile)|Fax: 0867639984| Web:www.nyda.gov.za email:  siviwe.mkoka@nyda.gov.zaCall centre: 0800 52 52 52 or 08600 YOUTH (96884) THANK YOU