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SAYEC’s Position on the 2022 State Of The Nation Address
The South African Youth Economic Council notes, with much trepidation, the lack of clarity and radical economic reforms evident in the President’s recent State Of The Nation Address. With a record high youth unemployment rate of 64.4%, we are of the belief that letting the private sector mystically absorb large masses of young people in need of jobs, without tangible legislation or additional government expenditure is a self-defeating act that will continue to perpetuate more youth unemployment and inequality.
Among the various programmes that the President announces, our council would like to raise the following concerns:
Higher Education
The President’s position of the government not being the stakeholder responsible for job creation, but rather reserving that duty for private enterprise might be endearing if the Department of Higher Education and Training was ensuring that the rising demand for higher education is met. This is unfortunately not the case. Against this backdrop, we are setting up a society where employment in the private sector will only be accessible to the few who qualify for state funding (which is also subject to the small number of students that NSFAS can afford to fund) or those who can afford to pay for university fees. The budget cuts to higher education over the past few years leave much to be desired, especially if the ticket to the private sector rests on university degrees and diplomas.
Currently student debt sits at a staggering R14 billion. A plethora of students are unable to register at institutions of higher learning due to the fees that they owe. This has led to the financial and academic exclusion of our young people. This has done nothing but reiterate the commodification and reservation of tertiary education for those with money. Our council is deeply aggrieved by the President’s nonchalant posture this issue when solutions ranging from raising bonds in the bond markets to finance student debt to increasing subsidies to universities could contribute to achieving fee-free education in South Africa.
We are also of the view that the President has let the missing middle students of South Africa down by his “deregulation agenda”, to create the ease of doing business. Within the higher education sector, student accommodation continues to incredibly expensive for students who are not funded by NSFAS or other bursaries. Red tape that we posit to the President is the implementation of price ceilings on the amount of rent imposed on students for accommodation. This would have been a tangible revolutionary decision by the President and DHET. We wait with bated breath on what the department’s budget will be following SONA and the budget speech. While we wait, our council is only left asking, “How will our young black people exploit the benefits of free markets when neither skills and capital are in their hands?”
Work Experience
The public sector must be the first sector to relinquish all work experience requirements. The sluggish rate at which this has been implemented, since its pronouncement in 2018, in the public sector for a range of entry level jobs makes the President’s remarks very disingenuous. The government must lead through a mass public employment programme that carries no work experience requirement. The President last stated in 2018 that Department of Public Service and Administration would review the current legislative framework to facilitate the implementation of a no work experience policy. The recommendations and implementation plan of this review have not been communicated to the public nor was it mentioned in the State of The Nation Address. Until such a time that the policy is not implemented through local municipalities in job openings and procurement, our young people will continue to be excluded from the world of work, both in the public and private sector.
Albeit the desire to praise the President on his plan for a future where young people do not have to accumulate experience to obtain a job is present, our council is dissatisfied with the lack of specificity and tangible action that he plans to undertake to implement this desire. The President has been urging the private sector to employ young graduates without work experience from 2018 and also introduced the Employment Tax Incentive to encourage companies to employ more young people.
Since then, youth unemployment has continued to rise. If the financial crisis of the late 2000s taught us anything, it is that the private sector does not align itself with developmental goals- not even in developing economies such as ours. We wish to see Parliament establish tangible legislation that makes the hiring of graduates without experience a law that the private sector must abide by. That will be the only way to guarantee that the President’s words materialize into work that has impact for ordinary young people.
Renewable Energy Independent Power Producer Programme
Since the inception of the REIPPP, the President has failed to report on the number of youth owned SMMEs that have been awarded tenders to contribute power to national grid. Our council understands the need to begin our transition to sources of energy that have lower carbon emissions. However, our council is resolute on the intentional inclusion of the youth in such a process. We are also resolute in ensuring that the supply chain for the renewable energy programme benefits the youth, from the machinery to the equipment needed for one to enter the market. The NYDA is significantly underfunded by the state. R545 million is not enough of a budget to fund young black entrepreneurs who would like to participate in future bid windows. The structural inequality in our country also does not make the option of funding from banking institutions realistic for a young person with very little assets and good financial standing. Once again, it will be the few with the factors of production that will be able to compete in the renewable energy sector. This does not happen to young black people. SAYEC envisions a just transition that includes young people operating as owners of the firms that supply energy. The lack of regular reporting and accountability of the state on the inclusion of young people in the sector is a cause for much concern.
Basic Income Grant
In the wake of hunger, poverty and unemployment, the State of The Nation should have announced the official launching of a Basic Income Grant. In a country where the food poverty line sits at R624 and more than 13.4 million people live below the food poverty line, immediate interventions are needed to support the most marginalized in society. In a profit led economy such as ours, the private sector has failed to employ and pay young people enough money to live a dignified life. It Must be the moral imperative for the government to come to the aid of those who are unemployed and establish a basic income grant, while embarking on radical economic reforms to create a future where jobs are available. The R350 grant is way too little for any young person to survive in the face of rising interest rates and price increases. We must draw young people into the economy by stimulating demand for goods. In the interim, with many young people being unemployed, that will not happen unless this form of state intervention in implemented.
Cannabis Commercialisation
As the state looks for ways to diversify the economy, we are of the view that the commercialization of cannabis will only change the lives of young people if they are afforded the opportunity to actively participate in the supply chain of the industry. We will have to start looking at farm and land ownership before we even get to cannabis sitting on shop shelves. The General Household Survey 2018 indicated that only 5.4% of South African own land. If we have dismally failed to execute a land reform programme that puts land in the hands of our young people and we still live in a time where young black people in rural areas are exploited in farms that harvest other crops, how can we possibly deem the commercialisation of cannabis as an industry that will tangibly change the lives of our young people. We do not wish to see the young people of the Eastern Cape and KwaZulu-Natal be the ones to farm the cannabis for measly wages while larger corporations with access to diverse private funding options make exorbitant profits. Land reform, business financing and skills development for young people must be the agenda of the state if we are to not leave the youth behind in the commercialization of cannabis.
Conclusion
The 2022 State Of The Nation Address presented very little immediate and bold interventions in the economy that the government will act upon. The liberalism and increasingly capitalistic nature in our economy will only deepen inequality between members of our society. The President’s plan fails to recognize that the factors of production required to enter the private sector are still concentrated in the hands of a few, while many of our young people earn little to no wages at all. The suitable business environment consistently emphasized by the President may keep the markets and international investors at bay. But as for the ordinary poor and working-class people of South Africa, unemployment and poverty will persist. If a welfare is all that the President can provide as a solution to youth unemployment, we will be on the trajectory of killing a future cohort of middle-class citizens.
Issued by the South African Youth Economic Council
Sthandiwe Msomi: National Spokesperson & Communications Manager
081 413 5999
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