Gordhan axing stalls launch of youth internships

A joint venture between the government and the private sector to create a million youth internships has become a casualty of the surprise cabinet reshuffle in March.

Colin Coleman, joint chair of the CEO Initiative’s unemployment workstream, said the launch, initially scheduled for July, was postponed to early 2018 as CEOs had to “remandate the team on the way forward” after former finance minister Pravin Gordhan was sacked.

Gordhan was spearheading a joint business and government grouping tasked with exploring ways to avert ratings downgrades and boost economic growth. The grouping was also tasked with launching a R1.5bn fund to support small and medium enterprises.

Coleman said work on the fund was also delayed.

A pilot phase involving large companies as early adopters could be implemented in September. Coleman said negotiations with the government about incentives for businesses were under way.

Deputy President Cyril Ramaphosa is at the helm of the initiative to reduce youth unemployment amid other reforms, with the goal of restoring the sovereign credit rating to investment grade. On Thursday night his office said it was not aware of the launch postponement.

Youth unemployment gained 1.6 percentage points in the first quarter of 2017 to 38.6%, while total unemployment stood at 27.7%, its highest in 14 years.

Coleman, who is a partner MD of Goldman Sachs SA, said the onset of the technical recession following a second quarter of negative growth in early 2017 had dampened the mood for business.

“We think the incentive package will be sufficiently attractive to motivate business to go over and above the national duty calling of the programme,” he said.

Ramaphosa’s spokesman Tyrone Seale said a task team of labour, trade and industry, the presidency, the Department of Planning, Monitoring and Evaluation, the Treasury and the Department of Higher Education and Training was finalising the business plan for the Youth Employment Service. “We estimate this process to be completed by the middle of July.”

Xhanti Payi, lead economist at Nascence Research, said: “This is the time when there’s 400,000 new matriculants leaving school. Some would have gone to training and others would have stayed at home because they didn’t get into training. If there was ever a time to implement [the programme] it would be now.”

YOUTH UNEMPLOYMENT GAINED 1.6 PERCENTAGE POINTS IN THE FIRST QUARTER TO 38.6%