Empowering young people through entrepreneurship

During the recent Absa Business Day Supplier Development Dialogues on empowering youth through entrepreneurship, moderator Joanne Joseph observed that Africa has a real crisis on its hands. Youth unemployment averages between 45% and 60% of the total number of unemployed across Africa and in SA the expanded youth unemployment is a shocking 74%.  The youth are the future and thus jobless youth represent our greatest socioeconomic and political challenge.

Though there are many excellent youth support initiatives across the continent, we are barely scratching the surface. To put this in perspective, in SA we would need to create 8m additional jobs to stem this crisis. That’s 22,220 new jobs every day for a year or three new companies as big as Vodacom — which employs 7,500 employees — each day. Alternatively, we would need to create 2,000 new SMEs that each employ 10 people every day for a year. The task is immense, and current strategies and initiatives are not coming close to tackling it.  

Kanelani Mavundza, supplier diversity champion at Absa Group procurement, emphasised the need to nurture small businesses as these are catalysts for creating jobs, especially for young people, who are the consumers of the future.

“As corporate supply chain and supplier development stakeholders, we need to talk about what more can be done to address the challenge of unemployment. At Absa we believe that promoting entrepreneurship could be key to growing the economy and getting more people employed,” he said.  

How can Africa empower young people through entrepreneurship? 

Mmathebe Zvobwo, executive ESD at Telkom, recommended that to optimise limited resources, Africa needs an approach which differentiates between empowering youth for survivalist socioeconomic activity and developing entrepreneurs who can grow rapidly to scale into supply chains.

Strong indicators for entrepreneurship relate to an innovative mindset, willingness to experiment, creative problem solving, perseverance and an ability to overcome fear of failure. This blended approach must prioritise resources to achieve the desired outcomes.   

A huge barrier to employment and entrepreneurship is lack of work experience, the “experience trap’” where youth cannot get work without experience or experience without work. Business needs to create a new spin on internships that are entrepreneurial, combining training, job shadowing and mentorship with relevant work exposure.

“Young people are disillusioned and need a sense of hope and direction,” said Farai Mubaiwa of Youth Employment Services, which has more than 55,000 alumni.  

On Youth Day, President Cyril Ramaphosa launched an initiative, SA Youth Network, which centralises “pathways for youth” including learning, learnerships, apprenticeships, volunteering and part- or full-time work opportunities. 

This is a solid first step to multi-pathway options needed for youth, designed to help them become economically active. The platform creates collaboration by centralising resources for young job seekers into Africa. 

How can corporates help? 

Corporate SA has the buying power and commercial imperative to give youth-owned SMEs access to markets through their procurement practices. However, corporates’ influence goes beyond technical competence to scalability and a growth plan. By procuring from youth, while they train, support, build speed and resilience, corporates can develop the suppliers of the future. 

Hyper-localised procurement develops supply from local communities, circulating wealth back into that community rather than conglomerates. Young local suppliers deliver localised presence, speed, innovation and agility and are hungrier than many incumbent established corporate suppliers. 

Digital technology hubs like KKInnovation match corporates with local SMEs to source and promote viable supply chain partnerships. These hubs can manage the SMEs' performance through online tools and analytics, and empower them to function optimally and scale as their business grows.

What about youth entrepreneurship in Africa? 

The AfCFTA, signed in January 2021, promotes free trade in Africa, breaks down barriers and promotes access to open markets and new opportunities. A futures study looks at how to support youth trade opportunities to benefit youth specifically.

SA is trailing in the entrepreneurship stakes with SMEs contributing only 26% to GDP, with 32% unemployment, while Africa’s SMEs contribute 65% to GDP with 6% unemployment. We need to optimise these emerging markets as the private sector, corporates and SMEs have never been better positioned to take advantage of the opportunities to open up the economy.  

Unless our collective efforts are amplified exponentially, we all face an uncertain future. Everyone needs to do their part, whether corporate, government, organisation or individual, if Africa is to turn the tide on youth unemployment.  

To join the 2021 Absa Business Day Supplier Development Awards, an initiative of Arena, Cold Press Media and Fetola, and be part of this dynamic network of people changing the future of SA, visit www.sdawards.co.za or email info@sdawards.co.za today.