OPINION : How to help youth boost our economy
IOL / OPINION / 23 OCTOBER 2018 - 20:00 / WASEEM CARRIM
Durban - In many ways, the history of South Africa can be understood through the labour of the South African people. For centuries, under colonial and then apartheid rule, their toil was often used to enrich others as opposed to the people who were doing the work.
We need to change the structure of the economy. To do this, we need young people to become the owners of capital. This needs to be done through youth entrepreneurship.
Waseem Carrim, Chief Executive of National Youth Development Agency
Our National Development Plan refers to small and medium enterprises being responsible for most of the jobs created. There are three elements that need to exist to have viable youth entrepreneurship - a skills set, including business literacy, access to capital and access to markets.
Young people raised the issue of retailers purchasing imported goods rather than local products. We therefore urge the government, through the Department of Trade and Industry, to consider the impact imported supplies are having on the economy and whether the tariff system offers sufficient protection to young entrepreneurs.
We further urge the government to consider providing electricity and other subsidies to youth manufacturers in order to lower the cost of production and boost output in the manufacturing sector.
Capital funding for businesses remains a challenge as most commercial entities are not willing to fund businesses that have the risk profile of youth entrepreneurs.
The development financing institutions have a significant role to play in the entrepreneurship ecosystem. In young people’s view all available development finance needs to be communicated in a singular format as this will harness the communication and uptake of opportunities.
Furthermore, South Africa needs to consider venture capital as a public-private partnership as there is limited funding for start-up ventures.
We recommend that the Treasury and the Department of Economic Development consider a venture capital fund together with private equity partners.
The public procurement system also needs to have a youth agenda. This has been partially achieved through the amendments to the Preferential Procurement Framework. The following should also be a requirement:
Government departments and public entities should be required to publish their spend on youth-owned enterprises quarterly.
overnment departments and public entities should also publish all beneficiaries of public procurement in order to encourage the rotation of suppliers.
A database of young entrepreneurs should be developed in order to provide youth with adequate representation and a platform. The private sector should be encouraged to support youth-owned enterprises by provisioning the use of the database to them at no cost.
The private sector should be required to publish their spend on youth-owned enterprises annually.
In order to transition businesses from the informal sector to the formal, a team made up of the South African Revenue Service, the Department of Trade and Industry and the National Youth Development Agency should work with township and rural young entrepreneurs to harness their potential, assist them with registration processes and build a pipeline for the entrepreneurs to start participating in the formal sector.
Youth entrepreneurship is an investment in the future because businesses that start small can grow into some of the world’s most successful companies, and change the way we work and the way we live and connect with one another.
That’s the spirit of entrepreneurship. And that’s what we’re encouraging.
* Carrim is the chief executive of the National Youth Development Agency
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER