ADDRESSING YOUTH UNEMPLOYMENT THROUGH SOCIAL INVESTMENT
Shamiso Chideme, Social Investment Specialist at Tshikululu Social Investments, unpacks how social investors can find meaningful and realistic opportunities for young people to find purpose and dignity in their lives, and at the same time, contribute to society.
The World Bank estimates that by 2050, half of the one billion people in sub-Saharan Africa will be under the age of 25.
According to the International Labour Organisation (ILO), in 2020, 20.7 % of Africans were Not in Education, Employment, or Training (NEET). The NEET rate is projected to increase slightly year-on-year, and there are more women who are NEET than men.
According to the Department of Higher Education and Training (DHET), in South Africa ~8.8 million people aged 15-34 are NEET. Approximately five million are inactive (not looking for work) and ~3.8 million are unemployed (actively seeking employment and available to work). 52% of the 8.8 million people who are NEET are female.
One of the biggest challenges in Africa is demographics. Rapid population growth combined with extremely low productivity in traditional agriculture and manufacturing has led to a wave of urbanisation at unprecedented low levels of per capita income and significantly high levels of youth unemployment.
“I think one of the most important things within the landscape of the youth in South Africa is that we need to find meaningful and realistic opportunities for young people in order for them to find purpose and dignity in their lives and contribute to the country. It’s always important for social investors to understand the landscape right now within South Africa with relation to young people, particularly those that are within the NEET,” says Shamiso.
“For example, young people have become discouraged from participating in the labour market, and they’re also not building on the skills base through education and training. This is largely because education and prior work experience play an important role in the labour market. Employers often prefer to employ those with previous work experience and a higher level of education. Unfortunately for the youth, the lack of work experience and the low levels of education become stumbling blocks that result in them finding it hard to secure employment, which further perpetuates intergenerational poverty and inequality in large percentage of the youth who are within the NEET space,” she says.
Shamiso adds that the possible implications of having a large ‘idle’ youth population puts young people at risk of partaking in violence and crime-related activities, threatens the safety of communities and represents a proverbial ‘timebomb’.
Key challenges in South Africa
The impact of the pandemic has been most severe for low-skilled, low-income workers – especially for those working within the informal sector. “Young people and women have been the most affected. Many of those who have lost their jobs have not regained them yet. This has been coupled by persistent failure of the labour market to absorb an ever-increasing number of youth looking for entry into the economy,” says Shamiso.
“We know that the majority of young people who are NEET have low levels of education – a large percentage don’t have matric. When you look at the stats, the post-school education and training is increasing year on year, but this is not sufficient enough to curb the high numbers of youth within that NEET bracket. They are not in education, are not in training and they’re not employed, so the increase hasn’t translated enough to actual opportunities in the economy.
“Addressing unemployment will not only require an increase in the number of jobs, but also an increase in the number of right jobs in the sector, in other words economic growth potential sectors, like horticulture, commercial agriculture, transit, and trade. There is a need for jobs that can provide employment to people with lower levels of education in particular.”
Although Post School Education and Training (PSET) is increasing year-on-year (in 2018, 2.5m people aged 15- 24 were enrolled in PSET), this is not sufficient to curb the high numbers of NEETs and has not translated into enough actual opportunities in the economy.
What can social investors do within this space?
According to Shamiso, social investors can focus on three areas to help increase opportunities for the youth.
Number one: Employment growth and labour market opportunities. In South Africa there are three sectors – financial business services, tourism and trade that account for three quarters of growth in employment. However, recent trends suggest that there may be considerable employment growth potential in tourism, horticulture, commercial trade, and transit trade. This gives social investors an opportunity to invest in demand-led skills development initiatives that can increase the employability of young people in identified sectors with high employment growth potential.
Number two: Education skills and training. There is a need to upskill, rescale, and provide basic skills to young people. Social investors should invest in initiatives that not only provide education and training opportunities, but also offer social support and mentorship to young people in sectors that have high economic growth potential, and that are labour intensive. In this case, tracking, monitoring, and evaluating whether programmes have actually helped make young people successful in accessing the economy is critical. For example, focus more on the outputs and not on the input.
Number 3: Digitisation. The pandemic has ushered in substantial changes, including accelerated digital transformation. Post-pandemic, companies have concentrated on digital services and products to compete in a changing market, and social investors should look at investing in digital skills programmes to help promote the sector as a sustainable employment option for the youth.
Without addressing the systemic issues in the economy, the struggle to address youth unemployment will continue unabated. Because the structure of the economy and education will never be changed by social investments alone, social investors need to adopt a more pragmatic approach to investing in employment creation. We need to be creating jobs, businesses and industries that are as sustainable as possible.