P Mlambo-Ngcuka: South African Graduates Development Association gala
dinner

30 June 2006

The new SAGDA Board Chairperson,
CEO of Umsobomvu Youth Fund, Malose Kekana,
SAGDA Board of Directors,
Distinguished guests,
Ladies and gentlemen,

Thank you for inviting me tonight to be part of the South African Graduates
Development Association (SAGDA) where you showcase and unveil current and
proposed graduate development programmes.

We meet here tonight during the commemoration of the National Youth Month,
and this year is also the 30th anniversary of the Soweto Students Uprisings,
where we honour those young heroes and heroines who took part in the struggle
for equality in education and a struggle for a democratic dispensation. Even
though we have a long way ahead, with the many challenges we have a country
with a bright future and you are that future.

The 30th Anniversary also afforded us an opportunity to reflect on issues of
youth development since 1994 and challenged us to promote the involvement of
young people in all aspects of development. It has been an opportunity for the
nation to take stock of progress in the development of young people since the
dawn of democracy. To celebrate young people such as those behind SAGDA for
being part of building a better South Africa and seeking solutions to the
problems that our young people such, as unemployed graduates face.

Too many young people remain mired in the Second Economy, and many are drawn
to a life of crime so as we celebrate 30 years of youth courage. We want you to
learn from the courage of those youth of 1976 and commit to fight and conquer
your own challenges today. But this time we are with you and by your side to
the finish.

This involvement in crime, abuse of substances like drugs and many other
ills continue to plague our youth. We are acutely aware of the urgency with
which these challenges have to be addressed if we hope to properly honour the
memory of those who sacrificed their lives during the Soweto Uprisings as well
as to ensure that your lives are much better, so that our country can be truly
free. It is for that reason that during this year, government will focus on
intensifying youth development by:

* setting up 100 new youth advisory centres, and enrolling at least 10 000
young people in the National Youth Service Programme. (We have made progress in
this regard with 93 youth advisory centres already launched in May. We have
exceeded the ten thousand target to thirteen thousand young people enrolled in
the Youth Service Programme.)
* enrolling five thousand (5 000) volunteers to act as mentors to vulnerable
children
* expanding the reach of the business support system to young people and
intensifying the Youth Co-operatives Programme
* completing the review of youth development institutions in order to improve
service to young people.

When we talk about the Accelerated and Shared Growth Initiative for South
Africa (AsgiSA), we talk about sharing the growth, especially with youth and
women. Through AsgiSA, young people will also contribute to the development of
the economy, but we seek to ensure you benefit from that growth.

AsgiSA’s focus on the expansion of the small, medium and micro enterprise
sectors and on skills development seeks jobs for youth and will empower young
people in the pursuit of their goals. Of course, this will only happen if we
work together. The challenge is way too big for government alone. We need the
likes of SAGDA to succeed in our youth empowerment initiatives.

Government’s micro-credit programmes are enabling young people to access
financial assistance through the Apex Fund and Umsobomvu Youth Fund (UYF) and
to set up their own business enterprises. This is also supported by our
Department of Trade and Industry.

Efforts to facilitate placement in companies of unemployed young people with
priority skills on the Umsobomvu Youth Fund database will continue in 2006 and
beyond. It still has teething problems and we are working on them; improving
software and adding capacity. The Expanded Public Works Programme will also
provide skills development to young people.

The programmes that SAGDA together with Umsobomvu Youth Fund are showcasing
tonight, tie in neatly with our objectives of AsgiSA, where we seek to achieve
a rate of economic growth of 6% per annum.

We are delighted with the joint venture that SAGDA, in partnership with
Umsobomvu Youth Fund, have embraced. This is indeed a wonderful initiative of
establishing a Youth Advisory Centre, catering mainly for young graduates. We
now need to pull together with JIPSA (Joint Initiative for Priority Skills
Acquisition) so that the country will have one consolidated database that can
be used by many service providers who are working in this area.

We also need the database to provide further training and re-skilling of
those whose skills are not in high demand. Above all we have to ensure that
there is a much better match between what universities produce and what the
world of work demands; what society needs in the economy; public sector and
society in general.

A study that we commissioned in JIPSA on this matter has made the following
initial findings:

* The graduate unemployment problem in itself is not big in the context of
broader unemployment in South Africa.
* Less than 3 percent of the broadly unemployed in this country are classified
as graduates (defined as individuals with any form of post-matric
qualification).
* However, unemployment amongst graduates is the fastest growing of all the
education cohorts.
* Furthermore, in the context of increasing skills-intensity and on-going
technical progress in production, as well as the skills shortages faced by
producers, the fact that more and more graduates are failing to secure
employment, remains a serious concern.

The research conducted by the Development Policy Research Unit at the
University of Cape Town makes a number of important findings about why certain
graduates remain unemployable in the face of growing skills shortages:

1) In many instances firms feel that young South African graduates lack
certain basic soft skills, such as writing and communication skills. These
skills, they feel, are necessary for labour market entrants to function
properly within and adapt to the workplace environment. Firms are often
reluctant to employ individuals who lack these skills. However, there are some
examples of firms that have employed such young people and given them the
opportunity to bridge their skills deficit by enrolling them in
learnership-based soft skills training courses. This should be encouraged.

2) Often enrolment at tertiary institutions is biased towards academic
disciplines with low employment prospects. Some of the Human Science Research
Council "graduate tracer studies" further show that African students are often
more likely to enrol in areas where they are less likely to secure employment.
This points to two things: Firstly, the schooling system does not equip
students, especially those from previously disadvantaged backgrounds, with the
necessary skills in mathematics and science in order for them to enrol and
excel in technical disciplines with better employment prospects. Secondly,
there is a lack of incentives for tertiary institutions to enrol more students
in the "right areas". It is crucial that students are given advice and
encouraged to enrol in the right areas, not only to address the skills
shortages in the economy, but also to ensure better employment prospects for
themselves.

3) Perhaps the biggest concern remains the quality and relevance of
education offered in South Africa. Four in five unemployed graduates have
diplomas, which perhaps suggest that many of these qualifications are not
relevant for the specific needs of the economy. Information about where or from
which institutions they acquired these qualifications is lacking and certainly
necessary in order to investigate this issue further. However, anecdotal
evidence suggests that employers tend to discriminate against certain
institutions. Often historically black institutions are perceived to be of
inferior quality, with firms tending to be reluctant to employ students from
such institutions. Further investigation is required to determine whether such
discrimination is justified. It is, however, crucial that institutions be
judged not on their through-put rates but also on the quality of education
offered as measured by the success of their graduates in securing
employment.

We will use these findings to close these gaps and to work much better with
you and our partners. We trust that this partnership will thrive and be
transformed to an even greater scale, encompassing graduate development
programmes and employment opportunities for youth who have graduated but are
currently unemployed.

We also have to respond to the needs of technikon students who need
experiential learning to graduate. Of course we also need to respond to the
needs of those without degrees or diplomas.

Chairperson, I trust that the graduate summit that took place today has
yielded resolutions that will bring a meaningful impact in the accelerated
growth of our country, and the sharing part of it.

Government looks forward to the contents of these resolutions so that they
may be synchronised with the broader national priorities of AsgiSA. We must
make the work of SAGDA align with the National Youth Service. The National
Youth Service programme serves as a platform to which graduates can bring along
innovative and sustainable ideas to accelerate a better life for all. But
National Youth Service will also take unemployed graduates to give them a
starting chance with mentors.

It should be noted that employment is not the only solution for graduates,
however entrepreneurship and self-employment in the long term is a vital aspect
of sustained economic growth. Studies show that businesses run by people with
tertiary qualifications, are more likely to survive than otherwise.

Our graduates must see themselves as being trained to be drivers of the
economy, they must see themselves as more privileged because of their
education. Higher education must do much more to prepare our graduates to be
job creators and not job seekers.

We must also assist the graduates to prepare themselves better when they
seek jobs. Many employers have identified communication and presentation
skills, leadership, and assertiveness as serious problems amongst graduates
across the board. That, you will have to take responsibility to learn
yourselves. People without degrees who have drive, confidence and are able to
communicate stand a much better chance in the labour market.

The proposed partnership between SAGDA and NAFCOC (National African
Federated Chambers of Commerce) around the ‘strategy to create hundred thousand
(100 000) SMMEs’ is a platform upon which graduates can play a meaningful role,
either as entrepreneurs themselves or as technical and business consultants to
these SMMEs.

As SAGDA will be launching a database for unemployed science, engineering
and technology graduates on behalf of the Department of Science and Technology,
it should partner with relevant institutions such as Umsobomvu Youth Fund and
JIPSA that are trying to do similar things, in helping to realise the dreams of
these young graduates, who possess the scarce skills necessary to drive the
economy.

Those of you who can still change or enhance yourself by learning something
else must also consider that.

We look forward to SAGDA’s continued role in intensifying its programmes,
such as the “graduate talk”, in rekindling a moral order where graduates will
have the intrinsic desire to share their skills within their communities.

We need the private sector to play a much bigger role on this front. To see
this as a strategic rather than a favour or fruitless expenditure, for which
they will only do if there is a tax benefit.

I call upon both the public and private sector to support such initiatives
by opening the Corporate Social Investment wallets to support graduate
development programmes and skills development, and to open their doors to
employ these young people.

As I said during the launch of JIPSA earlier this year, “the most fatal
constraint to shared growth is skills! And it should be noted that skills are
not just one of the constraints facing AsgiSA but a potentially fatal
constraint!”

I am confident that if we work together in partnerships, like SAGDA and
Umsobomvu are doing tonight, we will be able to meet our objectives.

I thank you.

Issued by: The Presidency
30 June 2006