Private sector also to blame
NOT INVESTING: ADDING TO ECONOMIC WOES
Companies sit on R1trn in cash reserves while youth unemployment is double the national average.
What is business in SA doing to help solve youth unemployment? The democratic project is in crisis – at least the economic part – overwhelmed by the economic slump, now over four years long, with an output below 3%. The widening current account deficit is at 2.4% of GDP. Recently, the International Monetary Fund cut SA’s economic growth forecast to 0.7%. Add unpredictable quarter-on-quarter GDP data and rising joblessness, and we have wide-ranging reasons to be alarmed.
I’ve often written about government’s failures, so know I’m not picking on the indefensible private sector. The involvement of KPMG, McKinsey and SAP in state capture shows us the private sector isn’t so innocent, and is the not-so-hidden hands in facilitating and enabling collusion and corruption of the public sector and politics.
Many shortcomings can be found in SA’s leaders but on paper and through some muddled policies, they’ve tried to create a business-friendly environment.
Finance Minister Malusi Gigaba’s 14-point plan to revive the economy is an example. I concede there are companies out there trying to make a difference and I commend them. My challenge is aimed at companies that should be doing more.
The private sector has deliberately failed to support or put forward suggestions on how SA can be bettered. While the conflict between politics and the economy has never been more evident, it’s worth reminding the private sector that it, too, will be judged for its role in severely dimming the prospects of SA’s future prosperity and economic wellbeing.
Perversely, companies are sitting on cash reserves of over R1 trillion, while youth unemployment is two times more than the national average. Chronic youth unemployment has far graver consequences on SA in the long run. We know economic growth doesn’t always translate into jobs. But what has the private sector done, besides rhetoric on politics, pointing out the obvious? Business at large is part of society, not just spectators.
The greatest obstruction to fixing the economy and get it working again isn’t government alone; the private sector, with its complacency and investment strike, is also responsible. The best way to get out of this economic pit is to grow out of it. To do so, the private sector must lead the way, absorbing the youth into jobs.
Develop innovative training and skills development schemes that better align young job seekers’ profiles with the needs of local labour markets.
Partner with government in tapping into the digital economy; technology is unbridling value across sectors by creating employment that relies on digital skills that can tackle youth unemployment.
Create youth employment programmes within companies as a tool to help youths gain experience and develop their professional network. Partner with government to adapt, scale and replicate effective models.