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Reitumetse Makwea | 29 June 2023

'We cannot accelerate youth economic emancipation for a sustainable future without capital, or even support.'

With Youth Month coming to an end, youth entrepreneurship is a solution to unemployment and to create economic activity in their communities.

However, young people in SA say without capital and financial support, small black-owned business do not survive.

Youth unemployment

Rising youth unemployment rates are a critical issue that South Africa is now dealing with, youth entrepreneurial activity in the country is also low, according to South African Youth Economic Council’s Sthandiwe Msomi.

Addressing the Broad-Based Black Economic Empowerment (B-BBEE) Commission webinar, Msomi said this was reflected in the latest Global Entrepreneurship Monitor report, which shows that youth constitute only 0.9% of South Africa’s total early-stage entrepreneurial activity rate of 8.9%.

“About 60.5% of youth aged 15 to 24 years old live in low-income households,” she said.

“For youth aged 25 to 34, the percentage of those living in low-income households was 44%. This has an impact on the propensity to start a scalable business.

“Lack of access to markets and finance continue to stifle participation of young entrepreneurs.”

Pretoria business owner Prince Sebape said government failed to support businesses and ideas initiated by the youth.

“We are always told that given the state of the economy, it is important that young people look for other options outside of getting formal employment,” he said.

“But when we do, we do not get the support we need. We cannot accelerate youth economic emancipation for a sustainable future without capital, or even support.”

Sebape said apart from the financial assistance, the other challenge for young people trying to set up their own businesses was creating a network of potential customers and credibility.

Skills shortage

He also said despite many initiatives to give people skills and “try to empower” young people, “they do not give people skills that they can use for the businesses”.

Msomi said enhancing enterprise and supplier development (ESD) for young entrepreneurs was important in ensuring entrepreneurial activity increased.

Meanwhile, B-BBEE commissioner Peter Koape said since 2017, the commission, through the annual national status and trends on B-BBEE, noticed measured entities implement between 50% to 60% of the ESD funds. He also said at the same time small- and medium-sized businesses continued to raise concerns over the limited access to funding.

“The aim of the research was to measure how ESD funds can be implemented in promoting the development and growth of black owned enterprises,” he added.

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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