Naledi Pandor: Youth entrepreneurship key to job creation in South Africa

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Photo of the Remarkables mountain range in Queenstown, New Zealand.

Charles Molele

Higher Education Minister Naledi Pandor says her department will support President
Cyril Ramaphosa’s bold plan to create 257 000 job per annum by promoting entrepreneurship in the post-school sector.

According to Statistics SA, South Africa’s unemployment rate is high for both youth and adults; however, the unemployment rate among young people aged 15–34 was 38,2%. This means that more than one in every three young people in the labour force did not have a job in the first quarter of 2018

In an interview with Inside Education this week, Pandor pointed out that small business
development was one of the critical solutions to job creation and has vowed to raise the
matter with the president during the upcoming cabinet Lekgotla – a meeting of cabinet ministers, provincial Premiers, and directors-general, takes place annually to prepare for the State of the Nation Address in February.

The Banking Association of South Africa (BASA) shows has identified SMEs as productive drivers of inclusive economic growth and development in South Africa and around the world.

The association reports that some researchers have estimated that in South Africa, small and medium-sized enterprises make up 91% of formalised businesses and provide employment to about 60% of the labour force.

BASA also states that SMEs’ total economic output accounts for roughly 34% of GDP.

“While contributing significantly to the economy, SMEs foster diversification through their development of new and unsaturated sectors of the economy. In addition, innovative and technology-based small and medium enterprises can provide a platform for local, regional and international growth,” reads a BASA report on SMEs.

This is why the minister of higher education has focused some of her attention on bringing together new graduates with small businesses.

“We have a number of initiatives such as learnerships to support SMMEs and to create
jobs among the youth. The setas investments and learnership should be a significant
contribution to job creation.

“But also, we are working and talking to not-for-profit organisations that are involved in
skills development. You have organisations like Harambee for example. We are looking at what form of partnership they could have with us as government.

“At the moment they [Harambee] works largely with the private sector. They don’t work with are institutions necessarily. They receive some funding from the setas. But it is not an organised contractual partnership between my department and them.

“In order to reach the president’s objectives, I need organisations like Harambee to work so much closely with the colleges,” said Pandor.

She said more jobs for young people could be created in South Africa if the government
implemented its commitment to direct 30% of its procurement spend to small businesses.

“We have very enterprising young people. I meet them all the time. If government can
act on its decision that it will procure from small and medium entrepreneurs, we will
create lots of jobs for young people.

“If I have invented radio or computer or tablet and government decide every child at school will have a tablet and decide they will procure from small entrepreneurs, that entrepreneur is set for life and will employ many more young people,” said Pandor.

As a department, we will raise the matter with the president at the Lekgotla to say let us
support entrepreneurs to create jobs because there are many innovative young people, said Pandor.

She added that the idea that says government needed to create the bulk of the jobs for the unemployed youth needs to shift.

“We must create entrepreneurs so that they can be the ones to create jobs.  We sure can support innovative and inventive young people. The SETA investments and learnerships should make significant contribution [to job creation],” she said.

Pandor added that her department has established a number of partnerships or collaborations with the private sector to promote entrepreneurship among the youth. This was in response to the president’s call to grow the economy and create more jobs in the country.

Pandor told Inside Education her department already kick-started a pilot project that will see 36 colleges paired with businesses across South Africa to benefit about 845 undergraduates.

13 trades were targeted for this project, including: mechanical fitter, boilermaker, electrician, millwright, bricklayer, plumber, automotive mechanics, diesel mechanic, carpenter and joiner, welder, rigger, fitter and turner, and pipe fitter – all of which have been identified as key trades that meet the demand for the country’s skills.

“I’m especially excited about the [establishment] of centres of specialisation where students going to undertake the 13 programmes have apprenticeship contracts.

“For the first time, we have 845 young people coming into these 36 colleges with 13 trades and they already have a link with business. They know they will do their theory at college level and part of their studies will be in the business to which they are apprentices.

We’re starting it as a pilot [project] and should it succeed, I want it expanded,” said Pandor.

Pandor also spoke of the establishment of the Entrepreneurship Development Programme
in Higher Education Programme with the University of Johannesburg (UJ). The programme focuses on entrepreneurial students, entrepreneurship in academia which includes curricula and staff capability and entrepreneurial universities. The programme also aims to bring all partners, including TVET colleges, FET colleges and SETAs.

At a recent roundtable with business leaders, Pandor said these programmes were critical to ensure the employability of graduates.

“Universities South Africa has agreed to host the programme at their offices in Pretoria,
Gauteng Province. Processes are currently underway to set up a permanent office that
will coordinate activities across the system.

“I am inspired by the success of young entrepreneurs and innovators. Especially those who have taken advantage of the booming tourism, the booming mobile industry, the growing market in renewable energy and the evolving market in cultural and creative industries. It is our local innovators and entrepreneurs who will ultimately create the millions of jobs that we need to grow an inclusive economy.”

 

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