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IN PICTURES | The Occupation Of Unemployment In South Africa

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At the end of the third quarter last year, South Africa recorded a high unemployment rate of 27.5%. Townships and informal settlements are at the helm of this problem where the youth lack resources to even apply for jobs.


A young, unemployed man crosses a busy street on 12th Avenue.

Dragging a greasy trolley filled with trash, he looks at us blankly as he continues to lug his garbage to the nearest junkyard.

It is a regular sight and a regular weekday on the streets of Alexandra, eight kilometers from Africa’s richest square mile, Sandton, in South Africa. 

Sixteen-seater minibus-taxis dash from corner to corner, packing their vehicles with enough passengers before making their way out of the township.

It is 10.30AM on this sunny Wednesday morning in December.

The street corners are adorned with colorful tuckshops; they stand out against the backdrop of the grey homes around them.

An Alexandra resident collects trash in order to make a living in the over-populated community. Picture: Gypseenia Lion

One of the spaza shops is bright blue with light textures of yellow paint; a man sits behind a mesh by the sales counter. It is almost impossible to see his face.

He offers a young man a cigarette via a peep hole through the mesh.

Three men gather to smoke the same cigarette before making their way to the multi-purpose community center on the other side of the road.

Each carrying a sling bag and an A4 envelope, they disappear into a building located at the end of a twirling staircase. Young and old ceaselessly walk in and out.

The yard is filled with a number of service centers: the local clinic, revenue service offices, the post office, multiple internet shops and the Youth Advisory Centre (YAC).

At the end of the hallway, Themba Mafuya sits collecting dozens of résumés from the eager youth who are desperately in search of employment.

He gathers the pile of documents and hands it over to his assistant.

“People are hungry for jobs,” he says as he looks at the unending stream of visitors walking in and out of the center.

Mafuya’s institution creates a database of unemployed youth within the community with the sole purpose of  collaborating with companies that are looking to hire.

By working closely with government, YAC reports to the City of Johannesburg on the state of unemployment in the community.

Dressed in casual wear, the 29-year-old has a friendly and positive approach when he advises potential employees.

“Go and correct the mistakes on your résumé that I explained to you. Make sure your documents are certified and bring it to me as soon as possible. Don’t worry, they will hire you,” he tells a young lady.

With Gauteng province being the economic powerhouse of South Africa, contributing 35% to the country’s GDP, according to recent figures released by Stats SA, unemployment remains an area of concern – 29.6% of people live in the province without jobs.

But the province is not among the lowest performing in the country. With an unemployment rate of 36.6%, the Free State has the highest provincial unemployment rate according to StatsSA, in 2018.

Limpopo, with a prominent rural population, surprisingly, has an unemployment rate of 18.9%, making it the lowest in the country.

Townships in the surrounding areas of Gauteng are still faced with an influx of challenges relating to unemployment.

Adding to the lack of jobs, social issues play a big part.

“We need to start doing follow-ups. Ask how many youth have been employed? Who are not employed? Why are they not employed? Maybe they do not have a correct résumé and we need to figure out why the employees do not choose them,” says Mafuya.

Just a few streets away is a compound adjacent to a block of fading pink apartments.

The yard is divided by a muddy passage with small dwellings on either side.

A smell lingers far beyond the cracks of the cement block as two buckets get noisly filled with hot water to clean chicken.

A scene depicting a busy street corner on a late Wednesday morning in Alexandra. Popularly known as Alex, the township has one of the most highest concentrated unemployment rates in Gauteng.
Picture: Gypseenia Lion

Alfredah Phuloane introduces herself after she wipes the chicken remnants off her hands using her multi-colored t-shirt.

With Phuloane is her uncle Velile Ndlovu who is her business partner.

“As long as I have chicken, they are going. If I have 55, all of them will be bought. I’ve already sold 25 for the day and we have just started,” she says.

A helper, who didn’t want to be named, gushes: “I love my job and I am proud of it.”

She too, like the 27.5% of the South African population who are unemployed, will celebrate any job that will help them put food on the table. 

In 2018, StatsSA announced an increase in the unemployment rate at the end of the third quarter.

According to the Quarterly Labour Force Survey, there are 16.4 million employed people and 6.2 million unemployed people between the ages of 15 and 64 years in South Africa.

The latest figures record that the number of unemployed people in South Africa grew by 127,000 from the 6.08 million in the previous quarter.

StatsSA Statistician-General, Risenga Maluleke, says unemployment, according to the statistics collected, is calculated using the 4×4 rule.

These are job-seekers in search of employment four days a week in a four-week period.

Phuloane, who has been unemployed for three years, took the iniatitive to start the business when she realized there was a demand for freshly-slaughtered chicken in her community. 

“At the time, when we were slaughtering the chicken for our own consumption, some people were coming in and asking if we were selling them. That is when we realized people needed chicken,”  Ndlovu laughs.

Ndlovu leaves the compound at 4.30AM to stand in a long queue in Linbro Park where he buys the live chickens.

On his return, at around 7AM, he places the fowl in a makeshift coop.

With the helper, who earns a sum of money for her assistance, the trio spend the day processing and packaging chicken for customers.

Three years of unemployment led Phuloane, a former domestic worker, to entrepreneurship.

“If my business does succeed, I want to hire those who do not have jobs. I want to make their lives simple. They can start their own businesses then, because you can’t wait for work. There are no jobs now and it will be difficult,” Phuloane says.

Her uncle on the other hand, who worked as a recycler in a recycling company, decided to quit his job in late 2018.

When Ndlovu rejected a job transfer to South Africa’s capital Pretoria, it suddenly made him one of the thousands without employment.

The formal sector recorded job losses of 65,000 people, and agriculture lost 1,000 employees in the third quarter of last year.

Without the promise of an increase, had he accepted the job in Pretoria, Ndlovu’s expenses would have increased by $111 to travel 41 kilometers to the north eastern part of Johannesburg.

He decided to quit.

“We realized that there is a big opportunity in the township. We are trying by all means to not rely on anyone. We can take our children to school. No one will suffer if they think about starting a business,” he says.

Social engineer Action Setaka, from the organization ACTIVATE! Change Drivers (ACD), who advocates for the unemployed, says there is a copious amount of injustice hampering access to employment.

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It is even worse in the townships.

ACD is a network of young people interested in driving change for the public good of the country through innovation and activism.

For Setaka, unemployment has become a commodity for business and institutions to exploit those desperately in search of work.

From the seemlingly endless amount of documentation required when applying for governmental posts, to the costs of printing and accessing the internet at internet cafés, money is required.

It does not end there.

“Transportation costs for traveling to interviews; posting of résumés cost money, which benefits the internet cafés; data to browse job opportunities and mobile networks make money out of this. Searching for employment requires money, yet you find people who claim that our young people are lazy and, therefore, they are not prepared to find work,” Setaka says.

The dire plight of the jobless youth in Alexandra is not in isolation.

Similar circumstances reverbarate throughout the townships of South Africa.

Another township, much like Alexandra, with compounds filled with shacks, is swarming with people seeking jobs for survival.

Located in the northern part of Johannesburg, Diepsloot has the highest concentration of unemployed people in Gauteng.

This is according to the Gauteng City-Regional Observatory (GCRO)’s Mapping Unemployment publication, released in August 2018.

The location, established in 1994, has grown into a community with a population of more than 160,000 with an estimate of “24,737 shacks alongside more than 5,000 formal housing units, such as RDP (Reconstruction and Development Programme) houses, self-built houses on serviced sites, and a small number of bank-financed houses,” as quoted in Diepsloot, a brochure compiled by the Johannesburg Development Agency.

Based on the StatsSA 2011 census, the GCRO map shows the concentration of unemployed people in areas that had rates worse than the provincial median in 2011.

According to GCRO statistics, “the square kilometer areas with the highest concentration of unemployed people are observed in townships such as Alexandra and Diepsloot and contain 4,965 and 8,758 people”.

Diepsloot’s South African Youth Project (SAYP) general manager, Clifford Legodi, says gaining access to employment for unemployed youth in townships is harder than it is for youth who grow up in urban regions. This points to a system exclusion due to the lack of access to resources.

Thus, the development programs that will meet the demands of the working environment will, in turn, open up opportunities.

It starts with breaking norms.

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“Young black people or previously disadvantaged communities are still using the traditional method of taking a taxi, printing a résumé or going to the offices. We felt that it was important to incorporate an online skills program. You look at their online presence. How they apply for a job online. Are they actually keeping a good online profile and how to secure opportunities in time?” Legodi says.

SAYP is a youth development organization aimed at the empowerment of young people by giving them the skillsets to utilize the opportunities around them.

This is done through the ‘Power Through Jobs’ program offered by the non-profit.

Life skills, work-readiness, and getting a job are some of the main points of focus for the youth of the township.

Online job-searching skills have been implemented in order to keep up with the evolving working environment.

Through encouragement and continuous skills development, Legodi says the notion of staying in one position will fade away, and the youth of Diepsloot will aspire to climb the corporate ladder.

“If they can conduct themselves in a professional manner, they will gain credibility,” he says.

The population is dominated by black people and for Legodi, the lack of opportunities within their reach means that those who are able find employment will have to travel long distances to get to work.

“Diepsloot has its own reputation that is quite limiting for young people to get opportunities out there.

“The media also has a bit of an influence, bad news sells. A lot of the things you see are about the crime, but everyone is treated equally within the community,” he says.

“The mistake we have been making in the past when it comes to addressing unemployment, is that we tried to develop a program that put everyone in the same box. We tend to forget that people come from different geographical locations and they are exposed to different lifestyles.”

Twenty-nine-year-old Thapelo Tau sits in a living room watching television.

Thapelo Tau of Alexandra.
Picture: Gypseenia Lion

It is noon and he is catching up on his favorite shows in the home he shares with his mother and two sisters.

“I have been unemployed for five or six years. It has been difficult to look for work. Many people here give up and they just sit at home and watch television,” he says.

He spends most of his time on his phone and reading.

“You may take your documents to look for work, but when you leave, they tear it up. We just give up because there is nothing we can do. I have an uncle who has been looking for work for a long time. He just stopped looking,” Tau says.

When approached for comment, the uncle dismisses the interview in vernacular.

“We are looking for work. We can’t even speak English,” he says.

English is widely considered the language of access in this nation where there are 11 official langages. Those who can’t speak the language are almost always immediately excluded from public participation.

“The problem that we have seen with people from townships is self-confidence. They get afraid when they have to leave their comfort space. They then need to present themselves in a different way, they have to adjust to a different lifestyle to showcase an approach,” says Legodi.

Afri-Berry founder and director, Relobohile Moeng, says the language barrier is one of the biggest challenges for the youth in the townships. Going the extra mile for an intern who lacked verbal communication skills, she offered mentorship and guidance. “The confidence part I had to build in, as her mentor,” attests Moeng.

Townships have the undying potential to contribute greatly to the country’s aggregate economic growth; this can be achieved only if the high populations are granted the opportunity to play their part in the economy. Alexandra and Diepsloot are testament to the facts.

In the interim, Ndlovu, much like the rest of the unemployed population, strives against all odds, hoping against hope to continue to put food on his own table whilst feeding his community.

Economy

Finances And Coronavirus: Threats And Opportunities In Lockdown Era

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Coronavirus has affected everyone in the UK, but not everyone has been affected in the same way.

This is starkly apparent when it comes to money. Eight million people are on furlough, receiving 80% of their normal pay from the government’s job retention scheme, while thousands more have been made redundant.

Many self-employed individuals and business owners are likewise under extreme financial pressure because of the lockdown.

But for others, the coronavirus has been a very different experience. Millions have been able to work from home on full pay but with significantly reduced outgoings – no commuting, no expensive coffees or sandwich shop lunches, no dry cleaning bills.

With shopping and entertainment options severely curtailed, general spending has dropping dramatically. According to pollsters YouGov, 1 in 6 people have been able to add to their savings, while 1 in 10 have managed to pay of their debts.

44% of respondents feel less secure about their financial situation
 
YOUGOV

Perhaps not surprisingly, white collar professionals have been better able to improve their finances. Those in manual occupations are more likely to have continued going into work rather than working from home and enjoying the associated cost savings.

Worryingly, YouGov found that 36% of Britons have dipped into their savings to meet their bills during the pandemic, with 44% feeling less financially secure as a result of the crisis.

Additionally, 16% have reported that their debts have gone up, while over a third (35%) have reported that their incomes have decreased.

Government intervention

The financial situation for many people would undoubtedly have been worse had it not been for swift intervention by the government on an unprecedented scale.

The job retention scheme, originally due to run until the end of July, has been extended until the end of October – although from August employers will be expected to contribute towards the cost.

Businesses are also able to access a range of loans underwritten in full or in part by the government, including the Bounce Back Loans Scheme and the Coronavirus Large Business Interruption Loan Scheme, where the maximum loan size was increased from £50 million to £200 million earlier this week.

Additional funding has also been made available to large corporations by the Bank of England.

Other government measures include the Self Employment Income Support Scheme. However, at present, this only provides payments to cover the months of March, April and May, and there has been no suggestion that it will be extended in the same way as the job retention scheme.

Mortgage payments holiday

The government is planning to extend its mortgage payments holiday initiative, whereby banks and building societies are instructed to allow borrowers to miss repayments on the understanding they will make up the accrued capital and interest debt over the rest of their loan.

The scheme was originally due to run until 20 June 2020, but under propoals expected to be rubber-stamped this week, those who have already taken payment holidays will be able to apply for an extension of up to three months, while those who have not yet applied will be able to do so until 31 October 2020.

UK Finance, which represents lenders, says 1.82 million mortgages were subject to a payments holiday as of 20 May – roughly 1 in 6 of all mortgages.

The three-month payment holiday for credit cards and other credit-based products is under active review – we may hear more on that from the Financial Conduct Authority in the coming days.

Impact on motoring

One area of the economy that has seen a huge contraction is motoring, from car sales to fuel consumption.

The number of new car registrations collapsed in April, the first full month of the lockdown, falling 97.3% year on year, from 161,064 in 2019 to 4,321 in 2020.

The restrictions imposed by the lockdown inevitably led to most people driving less or not at all, which had a knock-on effect on sales of petrol. The reduction in supermarket pump prices to below £1 a litre earlier in May was a clear indicator that supply was well ahead of demand.

Research from Lloyds Bank suggests fuel spending in April was down 58%, while day-to-day commuting expenditure was 86% lower.

Online car retailer CarWow reckons more than two fifths of Britons have spent less than £10 on petrol during the last month, with a third purchasing no petrol at all.

Vix Leyton at CarWow, said: “After more than two months in lockdown, the idea of a regular petrol station top-up no doubt seems like a distant memory to the millions of British motorists who’ve not needed fuel – or perhaps even driven – for weeks.”

With some of the lockdown restrictions beginning to easy, Leyton suggests now might be a time to fill up: “For those wanting to take advantage of low pump prices, now is arguably the time to do so – providing you can do so safely – before lockdown measures are eased even further and long queues begin forming.”

Bike use – and thefts – on the up

Another effect of the lockdown has been an rise in the number of people cycling for their permitted daily exercise, but a consequence of this has been an increase in the number of bicycles being stolen.

David Fowkes of insurer Admiral said: “Several cycle retailers have reported that they’ve sold out of many models. We’ve seen a 46% increase in the number of bicycle theft claims over the last seven weeks compared with the same period in 2019. That’s incredible when you consider that overall theft claims have fallen during the lockdown as people have stayed at home, deterring burglars.”

Admiral won plaudits in April when it became the first UK insurer to give a cash rebate (£25) to all its car insurance policyholders. Only LV has made a similar pro-active gesture, leading the Financial Conduct Authority to impose a package of measures that require insurance companies to provide support to customers in financial distress as a result of the pandemic.

Energy bills

With more people working from home and staying at home in line with government stipulations, there has been an increase in domestic energy consumption, with comparison site Compare the Market suggesting annual bills could rise by £400.

However, global demand for energy has reduced sharply, with factories and offices mothballed and travel services limited.

Stephen Murray, energy spokesperson at MoneySuperMarket, says cheaper domestic energy deals are available as a result: “A cocktail of factors have come together to make this is a great time to switch supplier. 

“There’s been a major drop in the wholesale element of domestic energy prices of nearly 40%- something partly explained by oversupply in the market due to declining business energy usage as a result of the coronavirus crisis.”

As economies gradually emerge from lockdown and energy demand increases, there is likely to be an impact on prices in the opposite direction.

Tips to keep your finances in shape

Here’s a to-do list for anyone wanting to save money and get their finances in the best possible shape:

  • Compare energy prices: use a comparison site to see if you can save money by switching. If you’ve never switched or haven’t switched for two or three years, there are likely to be cheap fixed rate deals available
  • Talk to your insurer about saving money: the regulator has told car and home insurance companies to help customer whose finances have been harmed by coronavirus, but it’s up to you to contact them to discuss the options, such as reducing the estimated annual mileage on your car insurance and getting a premium refund
  • Don’t automatically renew insurance: whenever a car or home insurance policy comes up for renewal, run a quote on a comparison site to see if there’s a better deal out there
  • Get the best broadband deal: check you’re on the best deal, especially if you’re working from home or using streaming services more than usual. You need the best combination of speed, capacity, reliability and price. See if your existing service provider can improve its offer
  • Talk to your lender: if you have debt, such as a mortgage, personal loan, credit card balance or car finance, and you are struggling to meet your repayments, talk to your lender to see what options are open to you. Don’t be tempted simply to stop making payments as this will have a long-term effect on your financial record.

If you are in financial distress as a result of the pandemic, or it has made your situation worse, contact a debt charity such as National Debtline or Stepchange for advice and support.

Kevin Pratt, Forbes Staff, Advisor UK

Contributor Group, Personal Finance

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Economy

Op-Ed: How To Be A Major Player In Global Food Markets

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Last year, Bill Gates named his 10 breakthrough technologies for the year. Among the technological developments he outlined were robot dexterity, new-wave nuclear power, customized cancer vaccines and the cow-free burger. It was the first time that the list, usually compiled by MIT Technology Review, was created by a guest editor. It is no wonder that Gates rightly predicted that home computers and the internet would infiltrate much of our lives. Yet, when I went through this list, it was not necessarily universal. Many of these breakthrough technologies made sense through Western lenses. We have to ask, which of these breakthrough technologies will have the most significant impact on the African continent?

Perhaps the most pressing issue for Africa now is agriculture. Climate change has had a devastating impact on the agriculture sector, which is particularly concerning when you consider that most African economies still heavily depend on it. A study by McKinsey & Company found that more than 60% of the population of sub-Saharan Africa is smallholder farmers, and about 23% of sub-Saharan Africa’s gross domestic product (GDP) comes from agriculture. Yet, increases in temperatures, changes in precipitation patterns and extreme weather events not only disrupt entire industries but reduce food availability and impacts food quality. This, of course, is coupled with the fastest-rising population, which places more strain on resources.

We have already observed in the last few years how devastating a drought can be. South Africa has become a significant food importer, while Kenya and Zimbabwe are on the verge of starvation. This has seen the regional and national economic growth take a severe knock. Yet, as the United Nations put it, “the continent has enormous potential, not only to feed itself and eliminate hunger and food insecurity but also be a major player in global food markets.” So how do we go about this? I would argue that tapping into the technologies of the fourth industrial revolution (4IR) does not just serve as a way of revitalizing the agricultural sector but also realizing its potential. As the American financier Bernard Baruch once put it: “Agriculture is the greatest and fundamentally the most important of our industries. The cities are but the branches of the tree of national life, the roots of which go deep into the land. We all flourish or decline with the farmer.”

I have just bought a farm and have been looking at ways in which artificial intelligence (AI) can make farming more efficient. Farmers can tap into AI to combat disease and pests, which have been made worse by climate change and pesticide use. Drones and other robots equipped with computer vision can collect data points from the farms’ existing crops. If you were to ask me to spell out some breakthrough technologies, many of them would be inextricably linked with the agricultural sector.

For instance, it is estimated that humans would need to plant over 1.2 trillion trees to combat climate change. Here, we could use AI to automate this process.

Airlitix is a South African AI software that is currently being used in drones to automate greenhouse management processes. We could take this a step further. Airlitix can collect temperature, humidity, and carbon dioxide data as well as analyse soil and crop health.

Elsewhere, similar technology has been adopted. The Third Eye project in Kenya uses near-infrared cameras mounted on drones to survey and diagnose the plants for pests and diseases, water stress and nutrient deficiencies. This requires a combination of historical data and the use of AI. Last year, IBM developed an AI-powered app to test the quality of their soil and water on location, in real-time. The AgroPad is a technology that can rapidly perform chemical analysis of water and soil samples. In California, Ceres Imaging has mapped fields using images of farms, which are analysed using AI to ascertain whether crops are getting enough water. This technology helps farmers decide when to plant, water, spray and harvest their crops.

This conversation crops up as we scrutinize what it means to have a green economy. The 4IR does not merely provide tools for efficiency, but it presents a unique opportunity to interrogate how we can transform the industry as our natural environment deteriorates.

To a large extent, we underestimate the importance of the agricultural sector. Yet, without it, we would not have food security, we would see our economies crumble and there would be untold job losses.

-Tshilidzi Marwala

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Economy

5 Tips For SMEs To Counter The Covid-19 Crisis

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It was recently reported by ratings agency S&P Global that the coronavirus outbreak has plunged the world into a recession. On the home front, a sudden surge in COVID-19 cases in the country resulted in the President of South Africa imposing a 21-day country-wide lockdown, starting from Thursday, 26 March 2020. Combine this with the fact that the country also recently announced to be in its third recession since 1994 it’s safe to say that many businesses are beginning to feel the effects of the pandemic.

The impact of the coronavirus on small businesses is likely to be substantial, especially for local businesses who are already feeling the pinch, as financial and market uncertainty can easily translate into an emotional crisis that can overwhelm our systems. However, help is on the way as the Department of Small Business Development announced that a Debt Relief Fund has been set up to assist small, medium and micro enterprises impacted by COVID-19.

While this relief is welcomed, it is still vital for leaders to step up. The world has been through crises before, but during these significantly difficult times, the economic impact may be as severe or possibly worse. As such, those in leadership positions must use past crises as examples and apply what was learnt to keep the country on course and minimise the impact of the pandemic.

Karl Westvig, CEO at Retail Capital, has pinpointed the visible areas that are affected and outlined a few pointers to help small business owners weather the storm.

Liquidity

The first victim of panic is liquidity – banks, asset managers and funders stop lending. When they cannot calculate the potential risk, they will not lend.  Therefore, it is critical to shore up cash by drawing down on available facilities and suspending any unnecessary investments. Reduce expenses and manage cash flow daily.

Get Your Best Team on It

When a business is growing, we tend to shift our best people into roles linked to growth and new initiatives. In a crisis, these people need to move into the highest priority roles. These roles would include collecting from customers, raising facilities or engaging key clients.

Morale and Communication

People need leadership. This would include authentic and regular communication about the situation, what the business requires and how this will be achieved. You can’t control the circumstances, but you can control the response and actions. This will create more certainty.

Hands-on

Events evolve quickly and every day is critical. Leaders must be hands-on. They have to be in touch with customers, suppliers, funders and staff. They have to collect data on everything – the mood, the financial metrics, even customer stories. Some of the best information is anecdotal, not just big data.

Policies

It’s tough to lead when you don’t understand all the underlying levers. These can change in a crisis. What worked in a stable environment can go out of the window in an instant. The best approach is to start again, listen to customers and then adapt your policies within your framework.

“This is not a manual on how to handle the current crisis, but hopefully, the points mentioned above can add to what you are already doing. In simple terms, it is easy to be overwhelmed, so tackle a few things very quickly and with commitment. This will create certainty and lead to action. The alternative is paralysis,” concludes Westvig.

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