Siviwe Economic Participation Entreprenuership FS 2012

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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
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
1
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.
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????
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???
4
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
“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 Pieterson museum
POST 1994
51% of South Africans between 15 and 24 are unemployed:
SAIRR, 2011: Photo by Independent News Papers
6
3.Policy Environment- South African Government Efforts
National 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 youth who are able to realise their full potential
and understand their role and responsibilities in making meaningful contribution
to their own development, that of their immediate communities, and broadly to
the society.
7
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 Efforts
National Youth Policy (NYP) 2009- 2014
8
3.Policy Environment- South African Government Efforts
National Youth Policy (NYP) 2009- 2014

Key strategic focus areas of the NYP 2009-2014
1.
2.
3.
4.
5.
6.
Economic
ParticipationEmployment
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.
9
3.Policy Environment- South African Government Efforts
NYDA 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- 2009 formation 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:
1. To develop an Integrated Youth Development Strategy (IYDS) for South Africa;
2. To co-ordinate the implementation of an integrated national youth development policy;
3. 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;
4. To co-ordinate, direct and monitor the implementation of such principles and guidelines as a matter of priority;
5. To initiate, co-ordinate, monitor and evaluate all programmes aimed at integrating the youth into the
economy;
6. To facilitate economic participation and empowerment of the youth;
7. 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;
8. 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;
9. To make any recommendations to the President relating to any other matters which may affect the youth.
10
3.Policy Environment- South African Government Efforts
Other 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.
11
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.
12
4. Economic Activity of South African Youth in 2012- In and
out school youth in RSA- An ignored fact
4. Economic Activity of South African Youth in 2012- Narrow
Youth Unemployment (15–35) by Province, 2007–2011
45.0
30.0
15.0
0.0
Western Cape
Eastern Cape
Northern Cape
Free State
KwaZulu-Natal
North West
Gauteng
Mpumalanga
Limpopo
South Afrca
Lfs 2007
27.3
36.2
31.3
33.8
31.7
38.0
28.3
28.4
41.8
31.6
Qlfs 2008
25.7
34.9
31.4
33.9
29.5
33.6
30.1
32.2
42.8
31.5
Qlfs 2009
28.8
37.3
37.3
36.7
28.3
37.7
33.7
36.2
37.7
33.4
Qlfs 2010
29.6
36.9
37.5
40.2
27.9
38.5
37.9
38.7
32.8
34.7
Qlfs 2011
29.9
36.7
38.8
37.6
28.3
39.3
37.6
40.4
30.0
34.6
14
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
4. Economic Activity of South African Youth in 2012- State of Youth
Entrepreneurship
Age distribution of small business ownership, 2010
16%
14%
12%
10%
8%
6%
4%
2%
0%
Percentage
16-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60+
11%
10.90%
11.10%
14.30%
14.60%
12.50%
8.80%
6.70%
9.90%
16
4. Economic Activity of South African Youth in 2012- State of
Youth Entrepreneurship
Youth owned businesses by province, 2010
25%
20%
15%
10%
5%
0%
Eastern Cape
Free State
Gauteng
KZN
Limpopo
Mpumalanga
Northern
Cape
North West
Western Cape
16-35 yrs
11%
9%
20%
17%
10%
9%
4%
9%
11%
35 yrs and older
13%
7%
20%
15%
9%
8%
6%
8%
13%
4. Economic Activity of South African Youth in 2012- State of Youth
Entrepreneurship
Business ownership and education
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
No Schooling
Some Primary
School
Primary
School
Completed
Some high
school
Matric
apprenticeshi
p
Post matric
Qualification
University
degree(hon/
masters etc
35 yrs and older
2%
6%
8%
24%
15%
1%
5%
3%
16-35 yrs old
0%
1%
2%
15%
14%
1%
3%
1%
4. Economic Activity of South African Youth in 2012- State of Youth
Entrepreneurship
Sources of Start-up Capital for Youth Entrepreneurs, 2010
Business partner
30
Family/Friends
436
Partner/Spouse
128
Loan on house
5
Business loan
10
Pension loan
22
Stokvel payout
39
Salary
118
Inheritance
26
Pension/retirement fund
9
Government grant
69
Retrechment package
46
Savings
560
Sold assets
25
Money from another business
60
0
100
200
300
Number
400
500
600
4. Economic Activity of South African Youth in 2012- State of
Youth Entrepreneurship
Skills Training resources of small business owners in SA 2010
Mentor/Advisor
1.20%
Spouse
14%
University/Technikon/ College tertiary
1.80%
Training programmes/Courses
5%
Previous job or work experience
8.10%
Whilst managing the business
8.10%
Family
10.40%
Self Taught
63%
0%
10%
20%
30%
40%
50%
60%
70%
4. Economic Activity of South African Youth in 2012- State of
Youth Entrepreneurship
Awareness of business support organizations
SAB Kick-start
1%
National Empowernment Fund
1%
None
71%
Pick 'n Pay Foundation
1%
Setas
3%
SABS
1%
Khula Enteprise
3%
NAFCOC
4%
SEDA
5%
SARS
6%
The Banks (Absa, FNB, Nedbank,Std)
10%
UYF/NYDA
14%
0%
10%
20%
30%
40%
50%
60%
70%
80%
4. Economic Activity of South African Youth in 2012- State of
Youth Entrepreneurship
Motivation to start a Business
Family expected me to
2%
Inherited the business
2%
Took over from previous owner
1%
To make more money/provide to my family
14%
To be my own boss/have my own business
9%
Wanted to-it makes me happy/use my skills
6%
Interested in particular product/Service
5%
Saw an opportunity
24%
Could not find a job/unemployed
29%
Lost a Job
8%
0%
5%
10%
15%
20%
25%
30%
35%
4. Economic Activity of South African Youth in 2012- State of
Youth Entrepreneurship
Obstacles to grow a business (16-35yrs)
Bad weather
66
Competition
212
Harrasment by officials
28
Crime and theft
166
Corruption
19
Cost of finance
94
Access to finance
214
Business licencing
26
Skills and education
60
Labour regulations
10
Costoms and trade regulation
21
Tax
13
Access to land
19
Transportion
62
Electricity
66
space to operate
385
0
50
100
150
200
250
300
350
400
450
4. Economic Activity of South African Youth in 2012- State of
Youth Entrepreneurship
Business registration by Age Group
4000
3500
3000
2500
2000
1500
1000
500
0
Registered
Not registered
Don’t Know
Total
16-35Yrs
279
1732
39
2050
36 and above
913
2660
53
3626
4. Economic Activity of South African Youth in 2012- State of
Youth Entrepreneurship
Business owner’s Financial Records keeping by Age Group, 2010
4000
3500
3000
2500
2000
1500
1000
500
0
Registered
Not registered
Don’t Know
Total
16-35Yrs
279
1732
39
2050
36 and above
913
2660
53
3626
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.
Siviwe Mkoka|Executive Manager| 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: [email protected]
Call centre: 0800 52 52 52 or
08600 YOUTH (96884)
THANK YOU
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