We are gathered to celebrate a milestone for the youth of South Africa. Business, acting through the Youth Employment Service (YES), in partnership with the government under the President’s leadership, and all roleplayers in the youth employment ecosystem, can today announce that we have successfully placed more than 200,000 young people in one-year paid internships in close to 2,000 South African businesses.
YES has generated about R12-billion in salaries for the youth, provided invaluable training, mentorship and work experience, and resulted in 40% of these YES youth being absorbed into full-time jobs in host companies. In addition, about 15% of them have created their own small businesses, in turn creating additional jobs for many. This has made YES one of the most consequential job creators in the South African economy.
I am also pleased to tell you that the second 100,000-intern milestone was reached in half the time of the first. This is testimony to both YES firing up the engines of the organisation, and the tremendous partnership with the government where we continuously work together to identify and remove obstacles, while putting in place, refining and gazetting meaningful, smart incentives such at the Employment Tax Incentive, and BBBEE levels up for companies meeting YES targets.
YES is therefore today, during the darkness of structural unemployment, a ray of light for young people.
This has been a patriotic effort by many over the years since we launched YES with the President in 2018.
We must immediately call out and congratulate the champions: the companies that have led the way. Since inception, Nedbank and Shoprite have each taken more than 15,000 interns. A thumping round of applause for them. Foschini, Toyota and Mercedes-Benz have each taken on between 4,700 and 6,000 interns; Investec, Volkswagen, Absa, Bidvest, BMW and Anglo American Platinum more than 3,000 each; and Motus, Ford, Spar, Eskom, MultiChoice, Telesure, Nestlé, Famous Brands, Safripol, Sage and Discovery between 1,000 and 3,000 each.
These are our 22 YES lifetime champion companies, many represented here, that have each contributed in excess of 1,000 interns, making up 44% of our 200K total! Without the commitment and leadership of these companies, YES would not be able to stand proudly in front of you tonight.
Yet, we must temper our joy at breaching this milestone by reminding ourselves of the desperate plight of unemployed young South Africans. For each of these 200,000 lives changed for the better by YES, we are all too aware that there are many lives dashed by the failure of our society to provide enough economic opportunity, the dignity of a work experience, and the repeated closing of doors in the face of every effort by the youth to open them.
These doors slamming in the face of the 12.5 million unemployed, of whom 69% are youth, is the biggest threat to our constitutional democracy today.
I know, Mr President, that you spend all your waking time focused on this critical issue of youth unemployment, and indeed you were the person who called out to business leadership, to Stephen Koseff and myself, at the Union Buildings in 2016 to take on this challenge.
It is common cause that the sustainable solution to ending structural unemployment is massive job creation through stimulating economic growth, and that in order to absorb the current net 300,000 entrants into the economy each year who cannot find jobs, we need a minimum of 3% economic growth.
In fact, to create a tidal wave of additional jobs to add to the 17.1 million currently employed, which is required to then precipitate the decline in the unemployment rate, we need economic growth closer to 5% per annum.
It is to be welcomed that today we can agree that green shoots are now appearing in the economy after a decade and a half of disappointing growth of only about 1%. The stabilisation of government debt, upgrade in the sovereign credit rating (albeit to two notches below investment grade), FATF grey listing being lifted, introduction of a 3% inflation target, which has since seen a drop in bond yields and a strengthening of the currency, steady improvements at Eskom and early signs of the same at Transnet are all welcome indicators of a potential turnaround of our economic fortunes. This is good news for confidence, investment and, ultimately, job creation.
For this sentiment to be sustained, and proven to be real for those outside the economic mainstream, in particular the jobless, we all (business, the government and civil society), I believe, need to unite on three fronts:
1. A common single-minded effort to drive much higher rates of productivity, investment and economic growth. Key here is a deep and probing exercise to cut wasteful consumptive state expenditure, and recycle savings into high-multiplier, productive investment (such as supporting SARS, micro-enterprise grants and capacitating the NPA) to make our national budget work harder for taxpayers, and all South Africans. Also key is ensuring our industrial policy defends jobs currently under attack, such as in the automotive sector, using incentives, subsidies and even, yes, tariffs to protect the competitiveness of local manufacturing. At the same time this policy should support new investment and open the growing African market seamlessly to investors, and act to bring down the cost of doing business. Functioning and well-priced logistics and energy infrastructure is a necessary, though insufficient condition for confidence, investment and growth. Ongoing efforts in this regard are welcome, even if more boldness and speed can only be encouraged;
2. Crime and corruption are the enemies of a functioning, job-creating economy. I know you will agree, Mr President, that at the heart of our war on unemployment must be a battle plan to target and eliminate organised crime, corruption and incompetence wherever they are found. The Madlanga Commission is exposing the attempts by criminal elements to infiltrate the state. These attempts at criminalisation of the state, like State Capture, represent a clear and present danger to business, to workers, to the jobless; because they threaten to slow economic activity, inflates the cost of public service and robs honest South African citizens of a functioning economy that employs and provides income to millions. Yes, it is true that joblessness and inequality create conditions for a rise in crime, yet there is no more urgent task if we are to defeat unemployment and inequality than ensuring the overhaul of related law-and-order institutions such that the full might of the law is brought against gangsters, the corrupt and the various mafias extorting our economy; and
3. Smartly, optimising our position in Africa and in the world. Mr President, your masterful leadership at the G20 made us proud, and set the stage for us to build further. I have called before for economic diplomacy to lead our foreign policy, because where we may not succeed on every geopolitical stage, we can find friends and win hearts and minds among investors, leading corporates, investors, financial institutions as sources of technology, innovation and capital. Throughout capitals of the world, Africa is increasingly seen as “the next frontier of global growth” (the subject of the course I teach at Columbia Business School), and South Africa, despite being a small economy on the world stage, is one of Africa’s primary engine rooms. Smart global economic diplomacy is the route to attracting investment into South Africa, and with almost half of the world’s economy in the US and China, we need to turn up the dial on economic diplomacy in these and all G20 nations. This is critical to our economic growth prospects.
As co-chairperson of YES, I can confidently tell you that we believe that uniting around driving much higher economic growth, cracking down on lawlessness and employing smart economic diplomacy on the global stage is a recipe to sustain this current promising turnaround, and produce conditions for the creation of millions of jobs for our people.
We are proud of the almost 2,000 companies participating in YES, grateful to our implementation partners and pleased to share with you that we have now created a robust and sustainable business-only-funded and operated organisation, in partnership with the government, that is determined to ramp up the quality, quantity and speed of our internship programme. We are also now providing our young alumni with financial and other support to support the entrepreneurs emerging from our ecosystem, and hope to agree on more areas of cooperation with you, and agree on further smart incentives to fast-track YES, alongside the government.
With the right focus, we have the makings of a partnership that is setting world records, just like our rugby and cricket teams of late.
We now have much more work to do. We must remove obstacles to speeding up our success. We must persuade the many companies who have not yet participated, to do so. And we must continue to design smart incentives linked to transformation, employment equity and empowerment legislation to incentivise companies to take in ever more YES youth for one-year internships.
Let’s continue to do all we can to be the ray of light for our young people on their all-too-often troubled journey. DM
Colin Coleman is co-chairperson of the Youth Employment Service.