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Youth are a priority for a country's development and sustainability through economic growth is vital yet figures indicating the high rate of youth unemployment in South Africa are alarming.
The figures are in a country that displays a dual-logic economy, with a highly-developed economic sector on one hand, and an economy battling to survive on the other. Thus, the illusion of fairness flies in the face of evidence that South Africa is one of the world’s least fair and most unequal societies.
Mandela’s pleas to make poverty history is a central idea for this paper. This plea comes amidst claims by scholars that many people in South Africa still live in poverty. A full listing of all the observable signs of poverty by youth will take hundreds of pages, given the brevity needed for an article in this newspaper. Wanton unemployment and lack of financial well-being has led to eye-sore scenes in suburbs, in townships and in cities. Able-bodied men and youth in street corners begging, men sitting in scorching sun waiting to be picked up for work, young men loitering the streets and begging for financial assistance from anyone who appears to have some cash with them are daily scenes to commuters and to the walking public.
From a South African perspective, SMMEs are expected to alleviate the threat posed by unemployment since the sector is also believed to be contributing 80% of all new job opportunities. A disturbing trend is the low prevalence rate of both new and established firms. The economic implications of these findings paint a bleak picture of the SMME sector’s current potential to contribute meaningfully to job creation and economic growth. At present, South African’s entrepreneurship scenario is dominated by necessity entrepreneurs whose involvement in entrepreneurship is because they have no other choice
The South African government has been incapable of solving socio-economic issues such as the high youth unemployment and reduction of poverty levels given the existing barriers which impede entrepreneurship development. In the NDP 2030, entrepreneurship have been prioritised to foster the advancement of SMMEs growth as the catalyst for economic growth and development. If SMMEs in South Africa are given support, they can accomplish the intended goal of reducing unemployment and contributing to the Gross Domestic Product (GDP).
South Africa still ranks very low on start-ups when compared to other emerging market economies. Given the existence of socio-economic challenges such as poverty and socio-economic instability, the role of small businesses, especially within the conduit for economic growth from the perspective of a developing country becomes vital. Entrepreneurship is usually positioned as a practice with the potential to alleviate socioeconomic challenges of modern society such as poverty. In South Africa, regardless of the acknowledgement of importance of SMMEs as engines for economic growth, SMMEs have been noted to have a high failure rate. This leads to the necessity of making certain efforts to boost entrepreneurship with the potential to heighten their roles in addressing local challenges. Since SMMEs have already proven to be the answer to the above issues, for them to flourish, certain efforts are vital.
Since inequality and poverty are linked in South Africa, the one negatively impacts on the other. Unemployment and poverty have direct effects on the social instability of any country such as crime, family disorganisation, family violence, unplanned teen pregnancy, juvenile delinquency, substance abuse drugs and alcohol abuse, sexual violence and rape, gangsterism threats of compromised standards of living, low self-esteem, forced migration in search of jobs and all forms of social unrest.
To solve the above, efforts to boost entrepreneurship are vital. These should be geared towards job creation and alleviation of poverty.
First, there is need for South Africa to create a culture where youth entrepreneurship is taken seriously, including an enterprise culture and family support. Second, young South Africans need to stop their sense of entitlement and an expectation that big businesses, government and others should create jobs, rather than creating one’s own employment. Third, there should be impeccable efforts to ensure that the strict regulatory frameworks are eased. Fourth, South Africa needs to enhance access to finance, including finance for star-ups. Fifth, as revealed by a GEM report, government support for small businesses in South Africa is severely lacking. This needs to change to give support to SMMEs. Last, and to me important, those who start youth enterprises need to undergo training on business management skills.
Written By Dr. Anthony Kambi Masha for the Cape Times
Dr Anthony Kambi Masha lectures at the Walter Sisulu University (WSU). He writes in his personal capacity as a youth leadership catalyst and as a social realist.
