South Africa’s economic reconstruction and recovery success depends on how the country responds to the high youth unemployment rate and invests in its informal sector.
This is according to Deputy President David Mabuza, who was speaking on Thursday at the Informal Sector Symposium in Port Alfred, Eastern Cape.
“Youth unemployment has reached an unacceptably high level,” Mabuza said.
Mabuza cited Statistics South Africa (Stats SA) data, which show that 12.3 million people are jobless in the second quarter of this year. Many jobs, the Deputy President said, were lost both in the formal and informal sectors during the COVID-19 pandemic.
According to the statistics, eight million people are still looking for employment, 3.6 million are discouraged, and 700 000 have given up looking for other reasons.
“The results continued to show that young people remain vulnerable in the labour market,” Mabuza said.
In comparison to the first quarter of 2022, he said young people between the ages of 15 and 34, who were without jobs, rose by 2% or 92 000 to 4.8 million in the second quarter of 2022.
Meanwhile, the country’s unemployment rate is currently sitting at 33.9%.
To assist young people, Mabuza believes that the country needs to realise the full potential of the rural and township economies, and create jobs in the informal sector.
“We need targeted support to youth-owned businesses through the provision of mentorship, funding, key infrastructure and access to markets. Youth-owned businesses should be creators of entrepreneurship and jobs.”
COVID-19
As the global economy slowly recovers from the unprecedented COVID-19 pandemic, Mabuza said communities are still counting the social, economic, and infrastructural devastation that has been left behind due to the lockdown.
“This affected both the economy and jobs,” he said, adding that the pandemic paralysed the livelihoods and well-being of those who were already on the margins of society, with the majority being primarily low-income households.
“The decimation of the informal economy, as a result of COVID-19 restrictions, brought about misery for many of those who derive their incomes and sustainable livelihoods through active participation across key sectors of the informal economy.”
However, Mabuza hailed organised business, labour, and community in their respective constituencies, and the National Economic Development and Labour Council (Nedlac) for their contribution to fighting the COVID-19 pandemic.
“We would have been in a worse position when it came to our response to the pandemic and the nationwide lockdown,” he said.
Informal economy
The Deputy President acknowledged that at municipal level, regulations of the informal economy are usually “obstructionist”.
“Even though municipalities are in charge of trading rules, market rules, street trading by-laws, and beach by-laws in their areas, it is important to make sure that these rules are always enforced with the utmost respect for everyone's dignity and human rights, including hawkers.”
Mabuza said government is working around the clock to cut unnecessary paperwork and bureaucracy.
This includes the removal of burdensome regulations and arbitrary barriers to participation, such as those that make it difficult to get permits.
“We need to enhance the overall capacity of the State to fast-track applications and administrative approvals to regularise trade and economic activities of the informal sector.”
Meanwhile, Mabuza said registration and compliance processes need to be simplified to avoid unnecessary confrontations between informal traders and municipal authorities.
“We need to improve access to modern technologies and platforms that enable informal traders to modernise their businesses in terms of sourcing goods, bulk buying, and conducting safe financial transactions.” – SAnews.gov.za
