Ramaphosa calls on business to hire youths from Presidential Employment Initiative

PRESIDENT Cyril Ramaphosa has urged the business community to create jobs and hire young people who are part of the Presidential Youth Employment Initiative (PYEI).

This comes as the PYEI in the Basic Education sector is coming to an end this month, which could raise the rate of unemployment among the youth exceptionally high as South Africa struggles to create jobs.

The second cohort of 245,000 young people will finish their 10-month placement in schools, joining the ranks of approximately 600,000 youths that have participated in the initiative since its launch in 2020.

Ramaphosa on Monday called on all government partners, especially business, to harness the energies, talent, skills and experience of these young people to grow the economy.

“The quality work experience and training provided by this programme addresses the concerns of many businesses that young applicants lack skills and experience,” Ramaphosa said.

“We call on businesses to participate in this process by taking advantage of the Employment Tax Incentive to hire more young people and create learnerships.”

One of the key objectives of the PYEI in the Basic Education sector was to provide the beneficiaries with skills and competencies that will enhance their prospects for future employment.

In February, the Presidential Employment Initiative was allocated R18.4 billion over the next two years to create short-term jobs for young people.

According to Statistics South Africa (Stats SA), the unemployment rate for those aged 15-24 was 63.9 percent in the first quarter of 2022 and 42.1 percent for those aged 25-34 years during the same period.

Economic growth and job creation among the youth have been identified as key issues that remain a serious threat to the country’s stability as more and more young people grow despondent.

Independent economic analyst JP Landman said on Monday that the PYEI had been a successful government intervention to the plight of unemployment but it would never solve the crisis.

“It has been a huge success without a doubt. There are a total of 250,000 young people each getting a stipend. It’s better than nothing, but is it enough? Will it solve the unemployment problem? Is it permanent? The answer is no,” he said.

Landman said that growing the economy was the solution, citing the four years in which the economy grew by 5 percent and the government created 4 million jobs as during former president Thabo Mbeki’s tenure.

“You can only imagine where we would be if we continued creating 500,000 jobs since 2007,” Landman said.

“If we double the economy now, we can add 12 million jobs and you will increase employment by 80 percent, and wipe out unemployment completely.”

The unemployment rate is expected to worsen and breach the 35 percent mark in the second quarter as the headwinds from slowing global activity, the flooding in KwaZulu-Natal and ongoing rotational load-shedding battered the economy.

Momentum Investments economist Sanisha Packirisamy said South Africa’s job crisis was at a magnitude which required the private sector to do much of the heavy lifting while the government enabled a high degree of policy certainty in the economy.

Packirisamy said a number of challenges were partly behind the structural inability of SA’s labour market to absorb the jobless into the workforce, but mismatched skills had further set back employment gains in the country.

“The SA economy has become increasingly services driven, yet a large majority of our workforce are classified as being unskilled or semi-skilled, resulting in swathes of unemployed at lower skilled job levels,” she said.

“Meanwhile, high levels of emigration at the skilled end of the jobs market has created a tight jobs market at higher-income earning levels.

“In our view, business, labour, government, civil society and academic institutions need to come together to resolve the jobs crisis in SA to produce the skills that are needed to suit an increasingly services-oriented economy.”

– BUSINESS REPORT