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Budget speech adresses the crisis of youth unemployment in South Africa

28 February 2013

As noted by President Zuma in the 2013 State of the Nation address, our country, like many others, has a crisis of youth unemployment. Intimately linked to this is the South African skills challenge, which is both systemic and complex.


President Jacob Zuma notes that South Africa is facing a crisis in youth unemployment (Image sourced from

What has become clear over the past few years is that the great financial investments which government has made into education are not producing sufficient yields. South Africa has consistently spent about 4.5% of our GDP on education, compared to 3.1% and 2.9% in developing countries and sub-Saharan countries respectively.
This year education once again received the biggest slice of the budget. The breakdown in spending for the 2013/14 financial year will be:
– R164bn for basic education;
– R28.7bn for tertiary education;
– R20.1bn for vocational and continuing education;
– R10.6bn for education administration;
– R9.1bn for recreation and culture


Simple and bold. This banner paints a clear picture of how important quality education is to your success later in life. (Image sourced from

As noted by Minister of Higher Education and Training, Dr Blade Nzimande in his recent speech to the International Peace College of South Africa, the most concerning feature of the South African unemployment landscape is the steadily growing number of young people between the ages of 18 and 24 who are ‘not in education, employment or training’ (NEETS). These individuals have not found a job or have even given up looking for a job and lost interest in improving their skills. This group can be seen as the lifeblood of the country haemorrhaging from our inefficient school system.

The total number of NEETS in South Africa currently stands at approximately 3.2 million of a total population of 6.8 million for that age group. Yet even those that are privileged enough to reach tertiary institutions seem to have been let down by the education system. The results of the National Benchmark Tests Project (2009) revealed that the majority of our first year tertiary students are functionally illiterate or innumerate and furthermore, lacked workplace readiness and abilities to do even basic paper-work in the workplace.

If the nation were to set itself a single goal for the next two decades, the schooling system should be accorded top priority. It is the inefficient school system which carries the largest responsibility for very low throughput rates in our country’s colleges and universities.

The Budget Review states that over the next three years, the basic education department will focus on “improving numeracy and literacy levels, expanding enrolment in grade R, and reducing school infrastructure backlogs” while the department of higher education and training will “seek to improve throughput rates at universities and further education and training colleges.” It is hoped that these words will translate into action.

With regards to the widely debated youth wage subsidy, Finance Minister Pravin Gordhan said a revised youth employment incentive would be tabled in the National Assembly.

Addressing a media briefing before he tabled the budget, Gordhan explained that it would include a tax break for employers, who would “get some money back through the PAYE system”. For more detailed insights into how this revised youth employment incentive would be implemented, click here

Gordhan stated that “the incentive is a further development of the idea that there needs to be cost-sharing – that is the key word. How by sharing costs do we encourage employers in South Africa to employ more young people, and by doing so how do we give young people their first exposure to work?” Yet even such a small measure to boost the demand for youth labour is once again likely to be bitterly opposed by organised labour who worry about companies firing older, more experienced workers.

The statement that the measure will be tabled for consideration in Parliament however gives no indication of a sense of urgency or deadlines. This is indeed disappointing since it has been just under a decade since the idea of such a subsidy was first conceived. In essence, the crisis of youth unemployment is rapidly expanding and the country can simply no longer afford to stall on this issue.


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