Minister Lindiwe Zulu: Launch and Networking Session of the Youth Chamber of Commerce and Industries South Africa

Speech by the Minister of Small Business Development on the occasion of the Launch and Networking Session of the Youth Chamber of Commerce and Industries South Africa

Programme Director,
Executive Mayor of the City of Tshwane, Kgoshientsho Ramokgopa, Deputy Executive Chairperson of NYDA, Mr Kenny Morolong,
CEO of the Youth Chamber of Commerce and Industry, Mr Naren Rau All dignitaries present,
Distinguished guests,
Ladies and gentlemen

A few weeks ago, I had the privilege of speaking to a group of young entrepreneurs. During that occasion, I recalled the profound words of Moses Kotane, one of the greatest sons of this country when he addressed a group of young South Africans many years ago. He said:
 
“At this hour of destiny, your country and your people need you. The future of South Africa is in your hands and it will be what you make of it.”

When expressing these sentiments, Moses Kotane was speaking on a different platform and in a different epoch. However, his sentiments are still relevant today as they point to the role that the youth of our country have to play in society.

As we launch the youth chamber of commerce and industries South Africa today, the words of Moses Kotane are still reverberating in our midst. Indeed, the youth have a critical role to play in shaping the future of our country. Like generations that came before them, what our youth do today will have a direct impact on our future as a nation.

The actions of our youth will ultimately determine whether or not our vision of a non-racial, non-sexist and prosperous South Africa will be realised. Their actions will determine whether or not we are able to erode the legacy of many years of apartheid, dispossession, underdevelopment and economic exclusion. Indeed their actions will determine whether or not the radical economic transformation that we are talking about will become a reality or just an elusive dream.

As a department we stand ready to work with all legitimate youth businesses as part of our broad agenda to ensure economic inclusion and empowerment. For our young people to become a formidable force and to have a strong compelling voice, unity is critical. It is easier for the department to work with organised formations that are internally coherent. Disunity is a recipe for failure. The success of radical economic transformation depends on unity of perspective and united
 
action. Unless we embrace this simple understanding, youth economic empowerment will remain a distant and elusive mirage.

The fundamental story of the youth of our country is that South Africa has undergone dramatic change over the last two decades.  Before 1994, young people were in the streets fighting for the liberation of their country and its people. In the post-liberation era, young people are on the streets, but this time looking for employment and the opportunity to taste a better life.

Thirty years since our freedom, the participation of young people in the country’s economy is still less than adequate. This is partly a result of constraints and obstacle placed in the way of youth economic empowerment as well as lack of access to information.

As we enter the Second Phase of our Transition, let us boldly assert that the economic empowerment of young people is not an option, but a national imperative. South Africa is a youthful country. The majority of its population is young. The youth (14-35years) constitute 41.2% (20.5 million) of our total population. When we look at the demographics and include children between the ages of 1 – 13 years in the equation, then 77.6% of the South African population is between 1 – 34 years old. This reality challenges the whole of government, civil society and the private sector to redouble our collective effort to ensure that our future leaders are sufficiently empowered to approach the future with confidence.

Let us pause and reflect for a moment on these disturbing and unpalatable statistics: Youth unemployment constitutes 73% of the total unemployment  in  the  country.  Employment  of  young  people  aged
 
between 18 and 24 years has fallen by more than 20% since December 2008. The long-term solution to the nation’s unemployment crisis is to create a nation of entrepreneurs and not a nation of job-seekers. While South Africa has an acute youth unemployment problem, it is perhaps important to acknowledge that youth unemployment is a global phenomenon.

Given the current state of youth unemployment in our country, the question is not whether we should encourage our young people to look in the direction of entrepreneurship, but rather, can we afford not to? The current reality is that young people between the ages of 16-35 years own approximately 33% of all businesses in South Africa. About 63%) of youth entrepreneurs are self-taught or acquired their skills from spouses (14%). In addition, less than 2% of the youth entrepreneurs reported tertiary institutions as a source of skills and training. Over 80% of youth owned enterprises are not registered.

Today, as we seek to consolidate the gains of our liberation struggle, the country is looking up to the youth to once again play a leading role in the national effort to confront the triple challenges of poverty, unemployment and inequality. As a country, we expect our youth to contribute with the same determination that they displayed in the fight against apartheid, towards the creation of a better life for all our people.

Young people must continue to occupy the front trenches in the reconstruction and development of our country. They must continue to be a force for progressive change and radical transformation. They must be empowered to occupy their rightful place as change agents, rather
 
than being mere spectators in the unfolding story of economic emancipation in our country.

We must challenge young people of today to seize the opportunities created by our democracy in order to create a better life for themselves and their fellow compatriots. In line with the spirit of vukuzenzele, our young people we must stand up and do things for ourselves. They must seize the opportunities brought by our freedom and democracy to empower themselves and their compatriots. We now live in a different world. The world has now changed. We are now on our own. Those who used to nurse us are telling us that twenty years down the line, we must now stand on our feet. They say we are now their competitors looking for the same markets.

Young people must not expect government or other people to do things for themselves. Government is there to create an enabling environment for young people’s businesses to thrive. Twenty years since our freedom, we can no longer afford to be passive recipients of government services. As  young people,  we must  utilise all  institutions and opportunities that have been availed since 1994 to advance small businesses and co-operatives. I have travelled across the world and the African continent. I have seen small businesses struggling without any form of state support or institutional recourse.

As a result of the self-evident poor economic participation of young people in the economy, government introduced an array of policy interventions in order to bring young people into the mainstream of the economy. The recent signing of the Youth Employment Accord represents a comprehensive approach to address youth unemployment
 
based on; the need to expand the number of jobs in the economy; the need to develop holistic, integrated and comprehensive responses to youth unemployment; the need to address structural limitations within the economy that impede youth economic participation.

More specifically, the Youth Employment Accord focuses on six key areas of intervention, namely; Education and training programmes that improves the transition from school to work; work exposure that connect young people with work opportunities through job placement schemes and work readiness programmes; public sector measures, that aim to increase the number of people employed in the public sector, through coordinating and scaling-up existing programmes under a ‘youth brigade’ programme coordinated with the National Youth Service programme; Youth Target Set-asides in priority industries identified in Industrial Policy (IPAP2), that have the potential to draw in large numbers of youth because of the high job creating potential and ability to contribute substantively to GDP, for instance, Renewable energy, Green Economy, Government’s Infrastructure Development Programme, Information Communications Technologies and Tourism Development; Youth Entrepreneurship and Youth Cooperatives – Public agencies like SEFA, SEDA and the Jobs fund will develop and strengthen dedicated programmes for youth enterprises and youth cooperatives.

Furthermore, the Revised BBBEE Codes will be used as an additional measure to encourage private sector supplier development initiatives aimed at growing youth enterprises and cooperatives; and Private Sector Measures aimed at expanding the intake of young people with targeted youth support and incentives approved by all constituencies that are party to the Youth Employment Accord.
 
Collectively, we must work towards building a nation of entrepreneurs. The entrepreneurial revolution must succeed if we are to meet the target envisaged in the National Development Plan. Entrepreneurs are vital to a healthy economy. They look for unmet needs in society and then try to fill them with a new good or service. They take risks without any certainty of reward. They push forward new technology. They try things that others might consider unlikely to succeed. We must also make this unpalatable point that entrepreneurship is not something you do because you have run out of options to make a living. It must be a matter of conscious choice, passion, commitment and training.

Our economy needs entrepreneurs, but what do entrepreneurs need? This is the primary question that my Ministry will try to answer as it builds an effective nurturing and enabling environment for small businesses in South Africa. As a department, we are developing unique programmes/instruments aimed specifically at addressing gaps in youth enterprise development or creation. We are also mainstreaming existing departmental programmes and instruments, like those concerned with Export Promotion, to ensure we reach our youth enterprises.

The youth have limitless potential to own successful enterprises and employ people, despite monumental obstacles that stand on their way. I am mindful of these challenges and the need to act with speed and more energy to address these challenges. We pledge to support young people with viable business ideas.

Government recognises the problem of poor economic participation by young people in the economy and has put in place numerous policy interventions meant to bring young people into the mainstream of our
 
economy. Our approach towards youth unemployment hinges on the following policy principles:

  • We will aggressively target Youth Entrepreneurship and Youth Cooperatives with holistic and integrated business development services supplemented by access to funding to develop and strengthen dedicated programmes for youth enterprises and youth cooperatives.
  • Business Incubation for Young Entrepreneurs
  • Entrepreneurship mentorship and coaching
  • We will pursue Youth Set-Asides in procurement across the three spheres of government to ensure that young entrepreneurs have abundant opportunities to grow and develop their enterprises in an environment that nurtures the development of these enterprises and enhances their job creation potential.


Working in partnership with all stakeholders, including youth entrepreneurs, we will begin to develop a plethora of programmes, both financial and non-financial to assist our youth enterprises, and thus create opportunities for job creation to reduce youth unemployment.

We have no doubt that the much-needed economic growth and employment opportunities will come from a practical policy that enables small businesses to thrive and grow into profitable enterprises. The ANC’s point departure is that small businesses are the key economic growth drivers and job creators in South Africa.
 
SMMEs can be the backbones of any economy and the main driver of economic growth,  poverty reduction and job creation.  Currently,  the SMME sector contributes more than 45% of the country’s GDP.

In fulfilling our mandate, we will seek to promote a co-ordinated and integrated support across government spheres and institutions for SMMEs. We will pursue an aggressive entrepreneurship drive and create an enabling environment that will make it easy for South Africans, particularly the youth, to start and sustain their businesses.

Our ultimate goal is to reduce obstacles to doing business wherever possible, particularly in areas such as compliance and regulation, transport and infrastructure, water and electricity supply, telecoms connectivity, licencing and labour. We will review the current policy and legislative environment governing the small business sector in order to remove whatever constraints that undermine their success and to open the way to co-ordinated and integrated support to small businesses.

Our specific support mechanisms to small businesses will, among other things, include; access to finance, business skill development, market access, competitiveness, easing the regulatory burden and advancing localisation, particularly leveraging on public procurement.

As a Ministry, we will continue to encourage the youth to open their own businesses and to apply and benefit from services that we offer. The youth need to seek better opportunities and grab them as they come. Working together with the NYDA, we will continuously seek better ways of supporting and uplifting youth businesses.
 
To address the socio-economic challenges facing our nation requires a collective effort. Together we can move South Africa forward through radical economic transformation.

I thank you!

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