During the recent Absa Business Day Supplier Development Dialogues, Joanne Joseph, observed that Africa has a real crisis on its hands. Youth unemployment averages between 45% and 60% of total unemployed Africans and in South Africa the expanded youth unemployment definition is a shocking 74%!  The youth are the future and thus jobless youth represent our greatest socio-economic and political challenge.

Although 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 eight million additional jobs to stem this crisis. That’s 22 220 new jobs every day for a year, or in other words three new companies as big as Vodacom – which employs 7500 employees – each day.  Alternatively, we would need to create 2000 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 business 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 youth 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 socio-economic activity and developing entrepreneurs who can grow rapidly to scale into supply chain. Strong indicators for entrepreneurship, relate to an innovative mindset, willingness to experiment, creative problem solving, perseverance and ability to overcome fear of failure. This blended approach must prioritise resources for impact 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.  “Youth are disillusioned and need a sense of hope and direction.” said Farai Mubaiwa of Youth Employment Services (YES) which has over 55 000 alumni.  On Youth Day, President Cyril Ramaphosa launched SA-Youth-Network which centralises “Pathways for Youth” including learning, learnerships, apprenticeships, volunteering, 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. They need to balance mutual value for the supplier and themselves, to develop the ecosystem. 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 SME’s 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.  South Africa is trailing in the entrepreneurship stakes with SMEs contributing only 26% to GDP and 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 watch the full discussion, click here.

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 South Africa visit www.sdawards.co.za or email info@sdawards.co.za today. 


Key learning points

  • Everyone needs to be a part of the solution because everyone is impacted by the extremely high youth unemployment crisis in Africa.
  • Future-focused corporates must accelerate their drive to provide innovative pathways for youth to unlock opportunities throughout their value chain.
  • We need a differentiated approach between survivalist businesses and entrepreneurs with growth and export potential.
  • Business and education need to collaborate to create innovative ways to deliver work ready entrepreneurs.
  • Africa has rising youth entrepreneurial capacity and South African youth need to learn from them to overcome fear of failure and focus on entrepreneurship as a career option.
  • We can no longer work in silos.  Collaboration is needed throughout the ecosystem.
  • Markets in Africa are open with many opportunities for SMEs whose products and services are competitive.