Youth vital for growth
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
Visit www.idc.co.za or call 0860 693 888