Page 49 - IRMSA Risk Report 2023

Inability to leverage
entrepreneurship due to a
largely dysfunctional education The development and implementation of a national strategy on entrepreneurship.
system and poor training This would take the form of a unified national centre consisting of stakeholders from The employment and livelihood crisis risk are at (red flags) pertaining to this risk – key risk indicators
opportunities. government and the private sector. Together, they would align commitments and the heart of the triple challenges (unemployment, such as the poverty line report that measures the
Social factors that do not provide a common goal on a macro level, as well as lead and coordinate micro- poverty and inequality) that South Africa is faced average livelihood of an ordinary South African,
promote entrepreneurship as a initiatives across the country. with. In the face of the current unfavourable as well as the measures of unemployment rates
career path of choice. economic climate, the risk is on an upward trajectory. in South Africa provided by the Statistics South
A lack of access to finance and a There is an opportunity for the private sector to sponsor and support start up small The National Development Agency (NDA) is clear Africa. These statistics should be studied over
difficult regulatory environment business. on its intent to reduce these challenges; however, the long term, to identify the trends and better
in South Africa. the external context is making it extremely difficult manage the situation.
to do so. This includes geopolitical issues such The NDA has great potential in addressing this
as the war between Russia and Ukraine, as well risk, as it deals with harnessing the power of civil
as the trade wars between the United States of society organisations (CSOs) in poor communities
Poor and unreliable public
infrastructure due to a lack of America and China. There are also several issues to eradicate poverty. It has a mandate to raise
maintenance and improvement, The government needs to address the underlying causes. addressing skills that contribute to this risk, for example: how the resources for civil society and to grant the necessary
this because of incompetence, development especially on municipal levels. Prioritising and addressing infrastructure import inflation due to supply chain disruptions funding meant to assist with improving livelihoods.
corruption and a lack of skills in would be also be recommended as infrastructure is the backbone of our economy. pushed the cost of living and wellbeing of South In addition, the following institutions could,
government. Africans to the brink of poverty. In South Africa, we through collective and effective efforts, assist in
can never fail to mention a significant contributor eradicating the employment and livelihood crisis.
to this risk being Eskom, causing a high rate of • The Industrial Development Corporation
unemployment (especially amongst youth and (IDC), which is an organisation that deals with
One of the greatest challenges of the South African educational system is to provide women). This in turn spills over and impacts on industrialisation by funding black-owned and
appropriate learning and skill sets for learners leaving the education system, so that
they are employable in a world of accelerating change and volatility. While it is other issues, such as the high crime rate, gender- empowered companies; black industrialists;
commendable that the aspiration of most school leavers is to study further for a based violence and femicide. women; and youth-owned and empowered
white-collar job, this is unrealistic in the current environment of high unemployment enterprises.
Disparities in the distribution and low economic growth. South Africa has a great footprint of TVET colleges, There is a need for government to create a • The National Empowerment Fund (NEF), which
of resources (inequality), which provide programmes for a wide range of artisan studies that will equip school conducive environment through policies and facilitates black economic participation by
coupled with poor educational leavers with practical skills that they can earn a living from. Society in general programmes that will stimulate the economy. As providing financial and non-financial support
opportunities. should take a realistic view that there are a limited amount of ‘knowledge worker’ much as society should not be dependent on to black-owned and managed businesses,
jobs available, and that the youth should focus on upskilling and traditional artisan government, it is important that they are held and by promoting a culture of savings and
employment opportunities. This will provide a better fit for demand, with more of accountable. This involves unlocking opportunities investment among black people.
the youth being employable. It will help to improve the current unemployment and around creating investment that will facilitate the • The Development Bank of Southern Africa
livelihood crisis. The ask is for the state to continue improving and growing the creation of jobs. This includes ensuring that public (DBSA) which mobilises infrastructure
TVET College footprint it already has.
infrastructure works efficiently (including energy). development with the purpose of delivering
It will assist in creating a conducive environment, socio-economic growth that is shared and
especially for small businesses. This will greatly equitable for African countries.
Two pervasive reasons for lack of economic growth remain the continual severe assist in reducing the costs of doing business and • Youth Employment Services (YES) is the
loadshedding by Eskom and the endemic corruption plaguing our public and the red tape when it comes to establishing those collaboration between government and
private organisations, leading to high unemployment and the livelihood crisis that businesses. Another strategy that is imperative in business labour, aimed at addressing the
Lack of economic growth in the the country is experiencing. If not to create jobs, it is incumbent on the government addressing this risk is South Africa Incorporated youth-unemployment crisis through BEE
country. to create an environment that promotes business to grow, thereby creating (SAINC) assisting in enhancing the skills of the initiatives.
employment. Of the many challenges to growing the economy of the country, affected youth, so that they are employable. They
government needs to make visible and significant improvements towards a more need to be able to create a sustainable livelihood Government needs to take decisive action with
reliable power supply, as well as curbing corruption.
for themselves through businesses and otherwise. strong leadership to overcome the multitude of
challenges created locally and internationally for
Corruption is the biggest impediment that the country to reduce the risk of unemployment
The unemployment rate represents approximately 7.8 million South Africans of prevents South Africa from effectively dealing with and livelihood crisis. The institutions can then
working age. If the extended definition of unemployment is applied to include this risk, as it overshadows the efforts to deal with augment government’s efforts to turn around the
those who have given up their search for employment, the unemployment rate the employment and livelihood crises. Corruption situation to create employment and a better life
stands at ±42.6%. Youth represent 17.84 million of South Africa’s 60.6 million, of also discourages any potential investor from doing for all.
which 61% were unemployed in Q4/2022. To move the dial in the right direction, business in the country because of the country’s
both the public and private sector can act. bad reputation and appalling track record (for
• Government should create a better environment for foreign investment through
Little or no access to jobs. example: the recent grey listing of South Africa by
less restrictive labour regulation.
• Improve the ease of doing business in South Africa, to entice multinationals to the global Financial Action Task Force).
operate in the country. One should be aware of some key risk indicators
• Private sector can commit to more public-private partnership initiatives to
employ and train individuals that will eventually remain in the public sector
with the requisite skills effectiveness and efficiency.

IRMSA RISK REPORT 2023/24 49

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Improve the ease of doing
business in South Africa, to
entice multinationals to operate
in the country.

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Private sector can commit to
more public-private partnership
initiatives to employ and train
individuals that will eventually
remain in the public sector with
the requisite skills effectiveness
and efficiency.