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South Africa’s youth unemployment challenge is arguably the biggest threat to the country’s social and economic development.
This past week, 250 leaders of government, business and social partners worked together on practical solutions that can move the dial.
In his message of support to the gathering, President Cyril Ramaphosa said “our youth – with their talents, optimism and energy – are our greatest asset”, but to unlock their human capital and lead them into work in growing sectors in the economy “we need breakthrough solutions”.
Through collective action between all social partners at the Accelerating Inclusive Youth Employment conference, we are driving solutions and partnerships to get millions of young people into earning, despite our low economic growth and poor educational outcomes.
Many of these solutions are found in the Jobs Summit framework.
But to deliver on the national targets we’ve set we need to coordinate and focus our collective efforts, and redirect our national spending towards more demand-focused programmes that stimulate new youth jobs in growth sectors like tourism, green economy, agroprocessing, digital tech, business services and installation, repair and maintenance, and the social economy.
READ: Job creation requires bold thinking, transformation and partnerships
We also need to scale up effective and inclusive skilling solutions that do not require tertiary qualifications and are alternative pathways into skilled work.
Currently, both the public and private sectors are spending a combined R200 billion on skilling.
For every 100 children who start school, only six get some kind of undergraduate qualification within six years of leaving matric.
Young people, especially the 85% who don’t access tertiary education, struggle to progress from learning to earning.
So despite our massive – and growing – annual investment in skilling, our youth unemployment rate is sitting stubbornly at a staggering 52%.
How can we fund skills training in a way that is demand-led and actually delivers impact and inclusive growth?
We need breakthrough solutions – routes to getting young people work-ready and competent – that are fast, agile and relevant to what the economy needs, and which often don’t require the onerous qualifications and long formal tertiary study to get there.
Conference participants formed “action labs” and coalitions of employers, funders and skilling providers to create jobs and build breakthrough solutions to skill young people in the short to medium term.
We’ve created a new model where rather than paying for training – and hoping it will make someone more employable – you only pay for results, meaning when the young person who is being trained actually gets a job.
Yellowwood and Harambee Youth Employment Accelerator, together with partners in government and the private sector, have incubated an innovative new impact bond called Bonds4Jobs.
As a social impact bond, Bonds4Jobs is a funding model for skilling solutions where socially motivated investors provide working capital to organisations that skill excluded youth and get them into jobs in growth sectors.
The performance metric for the organisations is that they need to place the young people into jobs and not just train them.
Government funders only pay the organisations – and thereby the investors – to the extent that the results have actually been delivered.
The first four years of the model will raise working capital from investors and outcomes funding to place 6 000 excluded South African youth in high-value jobs that can attract global investment to South Africa.
This is a real way to get our economy growing and our young people earning.
Galombik is executive director at Yellowwood, an investment holding company of several businesses in the financial services sector. She is also founder and chair of Harambee Youth Employment Accelerator
