By Nicholas Woode-Smith, author, economic historian, political analyst and contributing author for Free Market Foundation
SA could benefit dramatically from shifts in global demographics if we only adopted the right policies and supported the correct institutions to harness our youthful population and material resources. Unfortunately, we live under a regime that not only neglects education and infrastructure but actively restricts its youth from prospering.
SA has the potential to be a global economic powerhouse. We have the world’s largest reserves of gold, platinum, chrome ore and manganese ore and the second-largest reserves of zirconium, vanadium and titanium. We also have abundant diamonds, uranium, copper, nickel, and coal supplies. Some of the largest and most successful mining companies reside in SA, providing the industry, capital and expertise to extract these resources and sell them to a global market or jumpstart local manufacturing. This could enrich us all.
However, despite our abundant resources, pre-existing industry and need to develop, our youth unemployment remains above 50% (in 2022). This is usually blamed on a lack of education and infrastructure, but many matriculants and university graduates still struggle to find jobs. Moreover, shouldn’t a developing country like ours be able to provide opportunities for our youth, regardless of their education level? There is a place for everyone in an economy. We must not fixate on providing a university education to every South African. This will not solve our problems. We need skilled workers, tradespeople and blue-collar workers who want to work, not waste time on a pretentious degree.
The need for new policy frameworks
Education is not the root cause of our unemployment. Rather, SA lacks the necessary policy frameworks and institutions to harness our youthful population or pre-existing industries and infrastructure. SA’s government, driven by an obsession with socialist ideology and Marxism, has become fixated on policies that sabotage economic growth and actively contribute to unemployment.
BEE and affirmative action policies discourage the growth of businesses, allow the political capture of enterprises, and actively dissuade companies from employing anyone at all. The political empowerment of unions into local superpowers ensures that while union members will become privileged and overpaid, there will continue to be far too many barriers to entering the workplace for young prospective workers. This situation is exacerbated by far too many regulations that complicate conducting business unnecessarily. Labour regulations unfairly benefit the employee, discouraging employers from hiring new blood. The Reserve Bank tightly controls money transfers into the country, making it difficult for South Africans to seek remote work because it leads to increased taxes.
The path to success
If SA wants to harness its youthful demographic, it must make this country friendly to businesses and employers. That means making it easier to hire and fire workers, removing political interference in business, and cutting swathes of regulations that only chase companies and skilled workers away.
We should consider eliminating the minimum wage to make it as easy as possible to get a job and encourage workers to keep seeking better employment so that deserving employees are rewarded for their efforts while newer workers are given a chance.
The path to success isn’t for everyone to get a degree. It is for jobs to be created that people can then fulfil. If we become friendly to businesses, SA’s demographics and resources will finally be able to elevate the country to the economic status it deserves.
All it takes is a commitment to free market principles and the realisation that employment requires an employer to create a job.
