Newly elected South African President, Cyril Ramaphosa addressed the nation in his maiden speech as President this Friday. The address, widely welcomed for its focus on renewal, unity and a sense of purpose, also focussed on the youth as a key part of the South African population and economy.
“Our most grave and most pressing challenge is youth unemployment. It is therefore a matter of great urgency that we draw young people in far greater numbers into productive economic activity. Young South Africans will be moved to the centre of our economic agenda.”
Youth unemployment is a major challenge for the country and more needs to be done to absorb young people into the economy.
“At the centre of our national agenda in 2018 is the creation of jobs, especially for the youth. One of the initiatives will be to convene a Jobs Summit within the next few months to align the efforts of every sector and every stakeholder behind the imperative of job creation.”
The Jobs Summit will have to provide clear steps on how to solve the issue of youth unemployment.
“We continue to draw young people in far greater numbers into productive economic activity through programmes such as the Employment Tax Incentive.”
The employment tax incentive aims to encourage businesses to hire young people by stimulating employment for young people between 18 and 29. This reduces the amount of tax (PAYE) payable to SARS by a business, reducing the cost of employment to the employer while leaving the employee’s earnings unaffected.
“Next month, we will launch the Youth Employment Service initiative, which will place unemployed youth in paid internships in companies across the economy. Together with our partners in business, we have agreed to create a million such internships in the next three years.”
Young people are hungry for opportunities and internships increase the chances of employment for most young people.
“I will therefore be establishing a Youth Working Group that is representative of all young South Africans to ensure that our policies and programmes advance their interests.”
The President will have a youth advisory board to advice him on youth issues, unemployment and policies. This working group’s primary focus should be the execution of youth related policy.
“Government is finalising a small business and innovation fund targeted at start-ups. We will reduce the regulatory barriers for small businesses.”
Starting a business is in South Africa is relatively easy, what we need is funding, incubation and demand for our services to ensure we create sustainable new businesses. Businesses must procure from youth owned entities. This is a welcome focus.
“Starting this year, free higher education and training will be available to first year students from households with a gross combined annual income of up to R350,000.”
Although implementation for free higher education for students from poor families has already kicked off this year through NSFAS, not all qualifying students were able to apply as it was only announced in December. Hopefully the Finance Minister will clarify the funding model for this and more young people can apply for further education going forward.
So the key focus is tax benefits for businesses that employ young people between 18 and 29, a million internships over the next three years, a youth advisory board, start-up funding and incubation and free higher education for poor students.
We should hold the President accountable for these promises.