Youth unemployment crisis – Jonas begs government and private sector to reconcile

CAPE TOWN — Former deputy finance minister, Mcebisi Jonas says South Africa’s 70% youth joblessness is begging the government and the private sector to get over their mistrust and antagonism of one another. While policy uncertainty, ANC party-infighting and corruption are responsible for major corporates sitting on R1.4 trillion that could jump-start the economy, Zuptoid state capture has also put paid to several pragmatic, hugely innovative job creation initiatives. One such example is the now-stalled Youth Employment Service Programme aimed at creating 330 000 jobs a year. A joint initiative of business leaders, including Investec CEO Stephen Koseff, Discovery CEO Adrian Gore, Goldman Sachs MD Colin Coleman and Deputy President Cyril Ramaphosa, it was aimed at creating internships to boost township economies. We all know what happened in the eight months since everyone got so excited about this ambitious, yet achievable initiative. Another reason to pray Ramaphosa gets elected ANC President this December. There’s also the Koseff-inspired weekend tutorial programme, delivering extra maths and science lessons to 4,000 to 5,000 mainly township kids, all from schools with substandard teachers. They’re going from failing dismally to getting A’s and B’s. When we elect a government that reclaims the service ethic instead of self-enrichment, perhaps this logjam will break. – Chris Bateman

By Lameez Omarjee, Fin24

Johannesburg – Firms are employment generating projects and their growth could address the youth unemployment problem, but there is growing antagonism towards them, said former deputy finance minister Mcebisi Jonas.

He was speaking at the launch of a series of reports by the Centre for Development Enterprise that deal with tackling youth unemployment. Jonas said youth unemployment is a national crisis and new, radical measures should be taken to confront it.

File Photo: President Jacob Zuma interacts with former Finance Minister Pravin Gordhan, his deputy Mcebisi Jonas at the 2017 Budget Speech.

He also highlighted that there is an “ambivalence and antagonism” towards the private sector.

“I feel the state is in competition with the private sector, rather than working in a symbiotic way in the interest of the economy.”

Youth unemployment accounts for 70% of total unemployment in the country. The youth have not been beneficiaries of employment. Firms have not been employing enough young people even though the youth population has grown by 2.6 million since 2008, he explained.

Jonas said firms are investing elsewhere because they want more policy certainty. “There is too much uncertainty across the system.”

“Large firms are investing elsewhere, in liquid financial markets rather than fixed capital.” This is a huge problem which needs to be addressed in a “robust way” to “lubricate” fixed capital investment, he explained. More should be done to reduce the cost and increase the ease of doing business.

Jonas added that there is an over-fascination with state capitalism. He said there is nothing wrong with state capitalism if it works. It can only work in a “corrupt-free” state, with good corporate governance which operates with the bottom line in mind.

State capitalism within the context of corruption and state capture just misdirects resources from job creation which could have benefited youth.

Other points that need addressing include the education system in order to achieve growth and sustainable job creation in the future.

The lack of diversity in the South African economy is another issue. After 1994 little effort was made to diversify the economy which is highly financialised, energy intensive and extractive and “extremely concentrated”, he said.

South Africa is also struggling with a “no-skills” problem and low skill development should be a factor in education and training.

Exceptional leadership

Lastly, Jonas explained that leadership is needed to solve the youth unemployment crisis. Good leadership will stimulate needed investment and growth to get the job numbers.

“This requires exceptional leadership,” he said. This is “authentic and accountable leadership and not a small group of powerful individuals condemning the country”.

Source: http://www.fin24.com/Economy/jonas-growing-antagonism-towards-firms-20170817