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NATIONAL YOUTH ECONOMIC EMPOWERMENT NATIONAL YOUTH ECONOMIC EMPOWERMENT POLICY & IMPLEMENTATION FRAMEWORKPOLICY & IMPLEMENTATION FRAMEWORK

PRESENTATION TO THE PORTFORLIO COMMITTEEPRESENTATION TO THE PORTFORLIO COMMITTEEBY JEFFREY NDUMO; CHIEF DIRECTOR BY JEFFREY NDUMO; CHIEF DIRECTOR

DATE: 18 JUNE 2008, 09H00DATE: 18 JUNE 2008, 09H00

NATIONAL YOUTH ECONOMIC EMPOWERMENT NATIONAL YOUTH ECONOMIC EMPOWERMENT POLICY & IMPLEMENTATION FRAMEWORKPOLICY & IMPLEMENTATION FRAMEWORK

PRESENTATION TO THE PORTFORLIO COMMITTEEPRESENTATION TO THE PORTFORLIO COMMITTEEBY JEFFREY NDUMO; CHIEF DIRECTOR BY JEFFREY NDUMO; CHIEF DIRECTOR

DATE: 18 JUNE 2008, 09H00DATE: 18 JUNE 2008, 09H00

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Outline

Economic challenges facing the Youth

Economic Implications of the Youth Directorate

Youth Economic Empowerment Legislative Framework

National Youth Economic Empowerment Policy

National Youth Economic Empowerment Programmes & Projects currently being rollout and implemented

Tracking Performance on Youth Economic Empowerment

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Economic challenges facing the Youth

• Young people between the ages of 14 and 35 years constitute 34.6% of the South African population (Stats SA, 2007).

• 2007 Labour Force Survey registered unemployment as measured at 23%, youth constitute 73% of the unemployment figure.

• Employment concentrated in the service sector – mainly temporary work, which constitute limited benefits and employment security

• CATEGORIES MOST AFFECTED BY UNEMPLOYMENT INVOLVE:

– African youth

– Youth with lower levels of education, especially those with secondary education constituting the greatest proportion of unemployed youth

– Unemployed graduates – especially African graduates

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Economic challenges facing the Youth, cont…

• Possible reasons for youth unemployment: – Lack of enough available jobs to absorb unemployed youth – 57%– Lack of adequate work experience among youth– 25%– Inadequate and inappropriate educational skills (i.e. covering areas

such as entrepreneurial and various technical skills) – 23%

• South African youth own less percentage of the economy and remain marginalised in the mainstream economy (particularly black young women and men).

• Poverty among young people aged 25 to 35 stems from unemployment

• Lack of start up capital for young entrepreneurs

• The private sector has not played a role in contributing to youth development, particularly, financial institutions through extending access to capital to young entrepreneurs.

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Economic implications of the dti Youth Directorate

• The dti has long recognised the significance of fostering youth economic empowerment as integral part of South Africa’s economic transformation.

• The dti last year has established the Youth Directorate

whose main task is to promote youth economic empowerment in South Africa.

• The youth directorate comprises of a director and two deputy directors

• The dti through the youth directorate is currently in the process of finalising the Youth Economic Empowerment Policy that will guide the dti’s drive to promote youth economic empowerment.

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Youth Economic Empowerment Legislative

Framework

• The dti’s Youth Economic Empowerment Policy will form an integral part and aligned with several youth focused legislative and policy frameworks adopted by government aimed at creating conducive environment for youth economic empowerment in South Africa. These, amongst others, include:

– The Constitution of the Republic of South Africa, 1996;

– National Youth Commission Act, No 19 of 2006;

– National Youth Policy (2000);

– National Youth Development Policy Framework, 2002-2007;

– National Youth Enterprise Strategy, 2006

– Reviewed National Youth Development Policy (2012); and

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National Youth Economic Empowerment Policy

• Contribute towards increasing the level of youth participation in the mainstream economy

• Contribute towards increasing youth income through skills development and promotion of youth entrepreneurship

• More youth participation in the mainstream economy through youth enterprise development and employment creation

• Contribute towards increasing the real market in the economy and the growth of the SA economy

Mainstream Economy

Mainstream Economy

You

th

Up

liftmen

t

Second Economy

Second Economy

More economic participants through mainstreaming youth in the economy

Higher Economic Growth through promoting Youth owned and managed Enterprises

A Bigger Market for All

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Principles guiding the National Youth Economic Empowerment

Policy

• Promote competitive youth owned and managed enterprises

• Redressing the imbalances of the past through youth enterprise development

• Promoting a culture of youth entrepreneurship

• Promote gender inclusion and youth participation

• Promote transparency and accessibility

• Promote accountability and evaluation of youth economic empowerment

• Entrepreneurship & enterprise management and ownership must be encouraged as a viable career option for young people

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Youth Empowerment programmes & projects currently implemented

Projects Desired Outcomes

National Youth Economic Empowerment Policy & Implementation Framework

(still to be approved by the Minister of Trade & Industry)

• To create a conducive environment for the promotion of youth economic empowerment.

• Create youth owned enterprises and employment

• Promote youth entrepreneurship & skills development among the youth

The dti’s National Youth Service Programme (NYS)

Opportunities to young people to learn, skills training and gaining work experience through services Engages young people in activities that benefit communities and fosters in them a sense of patriotism and nationhood. Fosters responsible citizenship and ensures that young people are not marginalised in the overall national development effort.

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National Youth Service Programme

Community Enterprise Development Officers Project (CEDOP), 2008/09

• Promotion of NYS through the Community Enterprise Development Project in partnership with Umsobomvu Youth Fund. – To train a pool of 138 Community Enterprise Development Officers (CEDOs)

through a structured training programme culminating in them acquiring a Certificate in Micro-finance pitched at NQF level 5 & 6.

– These cadres of young people will be capable of deal origination, loan administration and assist in entrepreneurial development aspect.

– The CEDOs will be sourced from 63 district municipalities. These districts are also expected to mainly provide opportunities for services to these CEDOs.

– The dti and its agencies will also uptake some of these CEDOs in terms of opportunities for services.

• The project will run for 12 months and is currently being rollout.

• When successful, it is anticipated to be scaled up in the next financial year.

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The dti National Youth Service Project, 2009/10

• Promotion of the National Youth Service within the dti divisions and agencies. – Young volunteers will be provided with opportunities for services

within the various dti programmes and projects involving all the dti relevant business units and agencies.

– Relevant programmes and projects will take young volunteers in line with their requirements and also add value to the young people in terms of training and acquiring experience.

– Preparation for the implementation will be completed this year.

– Due to the high number of programmes and projects that may qualify a substantial number of youth are anticipated to receive opportunity for service.

• The project will be carried out in partnership with Umsobomvu Youth Fund.

National Youth Service Programme, cont…

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Projects Desired Outcomes Aligned youth economic empowerment to all dti policies, strategies and programmes.

• To mainstream youth economic empowerment in all policies, strategies and programmes being implemented by the dti.

• Ensure the promotion of youth economic empowerment in the economy.

National Youth Business Chamber

• The dti in partnership with youth chambers and organisations is facilitating the formation of a National Youth Business Chamber, a national umbrella chamber for all youth business organisations and associations

Youth Entrepreneurial Promotion and Awareness Programme

• Aim to increase promotion and awareness of youth entrepreneurship and enterprise development opportunities

Youth Empowerment Programmes & Projects currently

implemented, cont.

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Projects Desired Outcomes

Aligned youth economic empowerment to all levels of government policies, strategies and programmes.

• To mainstream youth economic empowerment in all policies, strategies and programmes being implemented by all tiers of government.

• Ensure the promotion of youth economic empowerment in the whole economy.

Youth Owned E-Cooperatives

• The dti & the DoC are promoting a programme aimed at creating E-Cooperatives owned by the youth in South Africa

Mechanism to monitor Youth Economic Empowerment

• Development of the monitoring instrument aimed at tracking policy implementation on youth economic empowerment across all tiers of government

Youth Empowerment Programmes & Projects currently

implemented, cont.

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Tracking Progress on Youth Economic Empowerment

Performance of the National Empowerment fund on Youth Economic Empowerment

NEF invested portfolio June, 2004- 31 March 2008

•Out of a portfolio of 117 transaction by number, the NEF has invested in 6 enterprises that are wholly or partly-owned by Black persons under the age of 35 years.

Name of company Province Sectors

Adega Restaurant Gauteng Food and Agro-processing

Barcelos Mthatha Eastern Cape Food and Agro-processing

Perfect 10 Gauteng Services

Valueline 145 (PTY) Ltd. Gauteng Transportation

Garlo World CC. Gauteng Transportation

Roseko Caterers & Cleaning Services CC. GautengServices

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Tracking Progress on Youth Economic Empowerment, cont.

Performance of the National Empowerment fund on Youth Economic Empowerment

BEE retail product, Asonge Share Scheme,2007/08

•10,640,000 MTN shares, worth R1,14bn, were offered to qualifying investors, which include investors between the ages of 18-35 years of age, plus one bonus share for every 10 held after 24 months. THE NEF ASONGE SHARE SCHEME OFFER AGE ANALYSIS

PROVINCE NUMBER OF INVESTORS 35 OR UNDER

Eastern Cape 2,697

Free State 2,930

Gauteng 27,031

KwaZulu Natal 9,333

Limpopo 4,550

Mpumalanga 3,508

North West Province 3,554

Northern Cape 827

Western Cape 5,182

TOTAL 59,612

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Tracking Progress on Youth Economic Empowerment, cont.

Performance of The South African Microfinance Apex Fund (SAMAF) on Youth Economic Empowerment, 2007/08

• The approval for transfers was 55.2 million vs. R65 million budgeted

• On lending disbursement: R 9 million

• Capacity building: R 10.7 million

• Borrowers: 4 346

• No of savers: 14 353

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Tracking Progress on Youth Economic Empowerment, cont.

Performance of The South African Microfinance Apex Fund (SAMAF) on Youth Economic Empowerment, 2007/08

DEMOGRAPHIC DISTRIBUTION OF samaf LOANS

21%

1%

11%

67%

MALE

DISABLED

YOUTH

WOMEN

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Tracking Progress on Youth Economic Empowerment, cont.

Performance of Khula on Youth Economic Empowerment, 2007/08

315

378

494462

746

0

100

200

300

400

500

600

700

800

R'm

il

2003 2004 2005 2006 2007

Business approvals to Channel to partners up by more than 60%

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Tracking Progress on Youth Economic Empowerment, cont.

Performance of Khula on Youth Economic Empowerment for 2007/08 still to be determined in the future: SMME Client

profile 68%

32%Male Female

35%

65%

White Black

34%

23%

13%

3%4%

8%7%1%2%

Gauteng KwaZulu Natal Western CapeNorth West Mpumalanga LimpopoEastern Cape Northern Cape Free State

• Significant increase in disbursements to Black SMEs• Investments in GP/WC/KZN account for 70% • Disbursements to women at 32% • 3 558 end-user facilities (ex group loans)• Youth client to be determined in the future

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Tracking Progress on Youth Economic Empowerment, cont.

Performance of SEDA on Youth Economic Empowerment, 2007/08

( Statistics for youth beneficiary base was not recorded before, but will be recorded in the future)

• A total of 140,779 small enterprises assisted through branches and EICs

• 20,853 entrepreneurs benefited from training programmes

•19,314 through branches and EIC’s

•1,539 through National Programmes

• 783 clients assisted through Sector specific programmes on tourism, agribusiness and cooperatives support

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Tracking Progress on Youth Economic Empowerment, cont.

Performance of SEDA on Youth Economic Empowerment, 2007/08

( Statistics for youth beneficiary base was not recorded before, but will be recorded in the future)

• 15,117 clients assisted through the call centre

• 349,406 unique visits recorded on the seda web-site

• 98 new SMME’s established through seda Technology Programme

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Tracking Progress on Youth Economic Empowerment, cont.

Performance of ITHALA Development Finance Corporation Limited on Youth Economic Empowerment

R 50 million reserved for funding of youth owned enterprises through a range business products by ITHALA Financial Services, 2007/08

Eleven young graduates and diplomates have also been taken into ITHALA’s Business Centres under a learnership programmes, exposing them to a variety of administrative and financial skills.

650 youth delegates have received SMME training throughout the four regions of Kwazulu Natal.

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Concluding Remarks

• The dti has recently established a fairly new Youth Directorate designed to promote youth economic empowerment in South Africa.

• Currently, the dti is finalising the Youth Economic Empowerment Policy & Implementation Framework anticipated to be approved by the Minister of Trade and Industry this year.

• Programmes and Projects that have recently been conceptualised are highlighted with some already in the early phase of implementation.

• Tracking of youth economic empowerment has started within the dti development agencies and is expected to be extended to cover other key role players involving all tiers of government (i.e. national, provincial and local level of government).

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Mr. Jeffrey NdumoChief Director: the dtiEnterprise and Industry Development Division (EIDD)Telephone: 012 394 1608/1631Fax: 012 394 2608/2631E-mail: JNdumo@thedti.gov.za

Contact Details

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THANK THANK YOUYOU