Youth vi­tal for growth

CityPress - - Business -

We face an eco­nomic crisis that is dif­fi­cult to ig­nore. While this crisis is one of fal­ter­ing growth amid a slow­ing global econ­omy, the more press­ing is­sue is youth em­ploy­ment.

Imag­ine, for a mo­ment, be­ing one of the 5.6 mil­lion young peo­ple who find them­selves un­em­ployed. What can be done to ad­dress this sit­u­a­tion?

Yes, we need to get the econ­omy growing at a faster rate so new jobs can be cre­ated. And gov­ern­ment has in­tro­duced the youth wage sub­sidy to en­cour­age em­ploy­ers to cre­ate jobs for the youth.

But what is des­per­ately needed is a con­certed, sus­tained ef­fort to cre­ate an en­vi­ron­ment that pro­duces jobs and al­lows young peo­ple to ac­quire skills and branch out on their own through en­trepreneur­ship.

Youth par­tic­i­pa­tion in the for­mal econ­omy is not a mere to­ken – it is at the core of the role the In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC) must as­sume.

Over the past three years, the IDC has com­mit­ted more than R1.2 bil­lion in sup­port of youth-owned busi­nesses. We are mak­ing an ad­di­tional R4.5 bil­lion avail­able over the next five years to fi­nance th­ese types of busi­nesses.

It is no se­cret that ac­cess to fund­ing is one of the ma­jor stum­bling blocks for new busi­nesses. Be­cause of the IDC’s man­date of stim­u­lat­ing the econ­omy, we are able to take a more pa­tient ap­proach and of­fer pref­er­en­tial lend­ing rates.

This is not to say we are not thor­ough. We wish to help busi­nesses grow so they can sup­port not only the founders, but also their start-up so it can flour­ish and at­tract more jobs. This de­mands strin­gent as­sess­ments of en­trepreneurs’ abil­ity to build sus­tain­able busi­nesses.

Given our role as a de­vel­op­ment fi­nance in­sti­tu­tion, we sup­port th­ese busi­nesses to en­sure they re­ceive all the nec­es­sary non­fi­nan­cial sup­port as well.

This is all well and good, but for South Africa to truly ben­e­fit from and ad­dress the chal­lenge of youth un­em­ploy­ment, ini­tia­tives such as the na­tional youth con­fer­ence – which we are con­ven­ing in Septem­ber – have to be em­u­lated by more than one in­sti­tu­tion.

I put this chal­lenge to our part­ners in the pri­vate and pub­lic sec­tors: let us join hands to ac­tively seek work­able so­lu­tions.

– Zama Luthuli, IDC

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