By Saul Molobi
In a powerful address at the Drakensberg Inclusive Growth Forum – convened by the Kgalema Foundation on 25-27 October 2024 at the Drakensberg – Asanda Luwaca, Executive Chairperson of the National Youth Development Agency (NYDA), confronted the critical issue of youth unemployment in South Africa, emphasizing the urgent need for systemic change and economic inclusivity. With youth unemployment rates remaining persistently high, Luwaca urged leaders to tackle the structural problems underpinning the crisis, rather than relying solely on conventional solutions.
“Every year, around 900,000 young people, aged 15 to 19, enter the labor market,” Luwaca noted, “yet too many of them face a lack of economic opportunities and find themselves sidelined from meaningful employment.” Highlighting the barriers that young South Africans face, she attributed high unemployment to factors such as economic concentration within limited sectors, skills mismatches, and geographic inequalities in economic activity. “We see industries like agriculture underdeveloped, while sectors like wholesale and retail remain dominated by a few players,” she explained.
Luwaca called for a “comprehensive industrial plan” that could counteract the trends of deindustrialization. She urged the government to focus on developing industries beyond major urban centers and to reduce high costs associated with labor and business operations in underserved areas. “Economic activity is often far removed from marginalized communities, forcing young people to endure long commutes and high travel costs to reach employment,” she added.
To address these pressing issues, Luwaca proposed five key shifts for job creation: prioritizing private-sector employment, encouraging labor-intensive growth sectors, supporting small businesses, fostering demand-led skills development, and reducing business transaction costs. She emphasized the need to “enable a more competitive economy by lowering operational costs for small businesses and ensuring that training aligns with current job market demands.”
Publicly funded employment programs were also a focus of Luwaca’s address. “Young people cannot wait for the economy to grow at the necessary 5%,” she said, referencing recent GDP growth of only 0.4%. To bridge this gap, the NYDA supports public employment initiatives that can offer young people a pathway to long-term employment. Luwaca noted that public employment programs have already demonstrated their potential to help young individuals transition into sustainable jobs.
In addition, she outlined the need for expanded social protection and the creation of “productive livelihoods” for those outside formal employment. This, she said, would require enhanced support for entrepreneurship, better access to broadband and data, and funding for startups. “Many young people are currently engaged in the gig economy,” Luwaca observed, “but without proper recognition or support, the potential of this sector remains largely untapped.”
Luwaca highlighted the Presidential Youth Employment Intervention (PYEI) as a significant step forward. “The PYEI provides a comprehensive, whole-economy approach, aiming to connect young people from various skill backgrounds with viable employment opportunities,” she explained. Through a network of skills development, small business support, and public employment programs, the initiative aims to create a stronger ecosystem for youth employment.
Toward the conclusion of her address, Luwaca underscored the need for a “centralized structure” in public employment programs, pointing out that the current decentralized model has led to inefficiencies. “Fragmented oversight, inconsistent policy application, and underutilized budgets have undermined the potential of these programs,” she said. Luwaca argued that a centralized approach would improve coordination, ensure effective budget use, enhance accountability, and optimize resource allocation for maximum impact.
“We are at a critical juncture,” Luwaca concluded, “and the decisions we make today will determine the future for millions of young South Africans. A centralized, inclusive, and well-coordinated approach to youth employment is essential if we are to break the cycle of joblessness and build a thriving economy.”