South Africa's entrepreneurs tackle youth unemployment crisis

Some surprising initiatives are springing up to address South Africa's huge youth unemployment problem, as Lerato Mbele reports

South Africa has one of the highest youth unemployment rates in the world, and while the government tries its own solutions, entrepreneurs are coming up with new ideas to tackle the problem.

On a sweltering summer morning, a group of around 50 men pace the streets of a Johannesburg suburb canvassing for jobs.

They hold up placards marketing themselves as plumbers, painters and builders. This has become a common sight in a country where unemployment stands at 25%. The majority are under the age of 35, often with few or only basic skills.

Rudzani Richard is a 29-year-old plumber. Dressed in a beanie, jeans and trainers, he looks like most of the trendy city youth.

He waits outside a popular hardware shop, hoping to be picked up by customers who need extra hands.

Rudzani says he's been coming to the same spot almost every day for the past three years and earns between $15-$20 (£9-£12) for a day's work. "I get one day a week or two days a week, so I'm suffering," he says.

Ticking time bomb

How the big number breaks down

Region Unemployment rate



Developed Economies and EU


Central and South-Eastern Europe


East Asia


South East Asia and the Pacific


South Asia


Latin America and the Caribbean


Middle East


North Africa


Sub-Saharan Africa


Source: ILO

South Africa has more than 10 million jobless people and half of them are between the ages of 15 and 24.

The main union federation, Cosatu, has warned that if not speedily and adequately addressed, youth unemployment in the country could be "a ticking time bomb".

Unemployment in South Africa has been made worse by an education system described by many as "in turmoil". The government has created a Human Resource Development Strategy that, until 2030, will focus on improving basic education.

In the meantime, organisations and entrepreneurs are coming up with new approaches to help young people find work.


While studying in South Africa, Kenyan Shikoh Gitau spent a number of months doing research in Khayelitsha, a township in Cape Town, and was surprised by her discovery.

"These women who I was working with, I taught them how to use the internet on their very basic Nokia phones," she says. "The first thing they searched for was 'jobs in Cape Town'. That was more than inspiration for me."

Shikoh then set about creating an application called Ummeli, which helps the unemployed find work.

By answering 12 questions on a mobile phone it generates a CV that can be sent to potential employers.

Shikoh Gitau talks about her app that is helping millions of people find work in South Africa

One user is Herman Mamabolo, who lives in a township in Gauteng and is using the app to look for work.

"Since I've submitted my CV I've got calls from employers, and they are looking for a person like a forklift driver, so I'm now able to have that hope that I'll be working in future, maybe in two weeks' time."

Shikoh has since been snapped up by Google and works for the company in Nairobi, where she is developing another version of the app for the Kenyan job market.

"I'd thought 100, maybe at most 1,000 people, but when I hear that almost 300,000 people are using the platform when you hear that over 20% of the people using your platform are actually getting jobs and they are satisfied, when you read some of those comments - they're saying, 'God bless you, we love you, thank you for coming up with this idea, it has changed my life' - I could live happily ever after with those comments."

Beating the Catch-22

While applications like Ummeli help match those out of work to vacancies, other organisations are adopting a different approach to make younger people more employable over the longer term.

Resolution Circle was established a year ago by a group of industry experts who aim to give practical training to apprentice engineers.


High youth unemployment is one of the biggest problems confronting societies around the world, condemning whole generations to a life of much reduced income.

In our special report we look at the challenges facing today's young and jobless, and the attempts to overcome the problem.

Prof Willem Clarke, the organisation's founder, says the aim is to: "Employ these guys and give them a year's experience by employing them, but also provide industry a service, so it's not a government-funded thing that just provides handouts. It's really creating value."

The building contains a research laboratory and a workshop where mechanical engineering student Otlotleng Lentotwane is busy training. He completed his theoretical courses in 2011, but since then he's struggled to find the entry-level work.

In order to complete the course in South Africa, apprentice engineers must do one year of practical work in industry in addition to their theoretical studies. The Catch-22 here is that without work experience, few can find the entry-level engineering job they need.

Without the practical experience, Otlotleng's been unable to graduate, but now hopes he'll be able to do so in September 2014. "I know I will get a job, even if it's not tomorrow, but I know that I will get a job eventually."

According to Adcorp, a South African labour research organisation, there are 600,000 graduates who are unable to find jobs.

Resolution Circle is not only trying to empower potential engineers, it is also responding to a wider national concern.

"We sit with raw materials, but we export it," says Prof Clarke. "We don't manufacture, we don't design, everything is imported.

"We're targeting ourselves to say, 'Look, let's take and design and build and create and manufacture so that most of the wealth stays in the country.'"

There are many reasons why young people find themselves jobless in South Africa. However, as Rudzani and Otlotleng show, it's also about the choices an individual makes to either fend for themselves or get equipped with better skills.

More Business stories


BBC Business Live

    RBS RESULTS Via Twitter Kamal Ahmed BBC Business editor

    tweets: RBS Ross McEwan says UK recovery "broader than a consumer recovery". Gross lending to businesses up.

    RBS RESULTS 08:41:

    More market musings on RBS. Chirantan Barua, an analyst at Sanford C. Bernstein, says the reduction in money set aside for bad loans was "extremely strong" compared with City expectations. Sales and capital were better than he expected too, he said. He reckons the shares may be worth 440p apiece.

    RBS RESULTS Via Twitter Kamal Ahmed BBC Business editor

    tweets: RBS CEO Ross McEwan says there has been a cooling in the mortgage and housing market over the last two months. "That is not a bad thing."

    MARKET UPDATE 08:24:

    European markets are lower today with investors focused on earnings news and economic data release. The biggest rise on the FTSE 100 is perhaps unsurprisingly RBS - up 10.07% or 33.10p so far to 361.9p after it took everyone by surprise by announcing first-half pre-tax profits of £2.65bn a week early.

    • The FTSE 100 is 0.28% lower at 6806.49
    • The Dax is down 0.22% to 9772.94
    • The Cac-40 has fallen 0.50% at 4138.73
    RBS RESULTS 08:11:

    Vivek Raja, an analyst at Oriel Securities, is one of the first out of the traps with some insight into what the RBS results mean. "The preannouncement reflects better than expected operating performance on credit performance, in the Bad Bank (RBS Capital Resolution) and on capital ratios," he says. So that means 1) loans are performing better, 2) the worst loans are performing better, and 3) the bank has more capital as a percentage of loans.

    VODAFONE 07:56:
    People walk past a Vodafone shop

    Vodafone's first quarter trading shows the mobile operator getting no relief from its European market. Group service revenue - that's customers buying handsets and using the Vodafone network to you and me - was £6.4bn in the three months to 30 June, down 7.9% on the same period last year. Competition and regulation "continue to create a challenging operating environment," it says.

    A general view of a sign for Lloyds Bank

    Lloyds Banking Group has responded to recent stories regarding settlements "with a number of government agencies" regarding rates setting - Libor. It's in "late-stage" discussions, it says.

    RBS RESULTS 07:27:

    "Asset quality continued to improve in the UK and Ireland," says what was once the world's largest bank. In English, more of their loans are more likely to be repaid in full and on time. The bank has set aside £22.4bn against bad loans, down from £25.2bn in December. Ulster bank posted a modest profit of £55m - that's from a £381m loss a year ago.

    BSKYB PROFITS 07:20:
    British Sky Broadcasting headquarters

    BSkyB has reported a slight slip in annual pre-tax profit to £1,1bn compared with £1,2bn a year earlier. Tax for the year was £249m compared with £295m in 2013, an effective tax rate of 21% as a result of the reduction in the rate of UK corporation tax.

    RBS RESULTS 07:16:

    Pre-tax profit was £2.65bn, up from £1.37bn as impairments dropped like a stone -- down to £269m from £2.15bn. Those reductions in bad loan costs far outweighed a rise in restructuring costs and a drop in sales. £150m was added to provisions for Payment Protection Insurance (PPI) and £100m to interest rate swap provisions.

    RBS RESULTS 07:08: Breaking News

    A turn up for the books. Royal Bank of Scotland Group has put out its first-half results early. They were due 1 August, according to the bank. Operating profit rose to £2.6bn from £708m in 2013.

    A Balfour Beatty workman on a construction site

    UK construction firm Balfour Beatty is in talks with rival Carillion about a potential £3.05bn merger, it has emerged. The two companies confirmed what they described as "preliminary discussions." In a joint statement they said they believed a "merger of the two groups has the potential to create a market leading services, investments, and construction business of considerable depth and scale."

    DISCOUNT STORES 06:51: Radio 5 live

    Look out for Hussein Lalani, co-founder and commercial director of the 99p stores, on 5 live. He says before the recession suppliers would just give them their leftovers. Now many brands are making products just for the discount market.

    GDP FIGURES 06:40: BBC Radio 4

    Marian Bell, economist and former member of the Bank of England's Monetary Policy Committee has been talking to the Today programme about the UK's economic recovery. She says it is "people are expecting a 0.9% rise in output and that would be sufficient to surpass the 2008 level." But it has taken more time to achieve that economic recovery than in the past. In fact, she says, it has been "the longest that output has been below its previously level for more than 100 years."

    GDP FIGURES 06:27: Radio 5 live

    Elaine Coverley, head of equity research at Brewin Dolphin is on Wake up to Money. "We need other markets to keep that going," she says of growing UK gross domestic product. Markets like the US aren't doing so well. The IMF slashed its US economic growth estimate on Wednesday to 1.7% for 2014.

    GDP FIGURES 06:11: Radio 5 live

    "The consumer is doing a lot of the heavy lifting," in the economy, says economist Alan Clarke of Scotiabank on 5 live. How, when wages are stagnant? The housing market, of course. As the value of homes rises, people are prepared to save less and spend more without earning more. House prices won't go up at the current rate forever, though, he says.

    GDP FIGURES 06:03: Radio 5 live

    CBI director-general, John Cridland is still on 5 live. The recovery is currently investment-led rather than export-led. Sterling's strength isn't helping but isn't wholly choking things off either, he says.

    GDP FIGURES 06:01: Radio 5 live

    Director-General of the Confederation of British Industry John Cridland expects growth of 0.8% in the second quarter, he tells 5 live. "We are getting some balance in the recovery, like a boxer in the boxing ring finding his feet," he says. Companies are investing, finally, he says, and that's crucial. This is what will add to wages.

    06:00: Howard Mustoe Business reporter

    Good morning! Please get in touch via email on or via twitter @BBCBusiness

    06:00: Matthew West Business Reporter

    Good morning. So, let's catch up from last night: Amazon had a tough second quarter, as did General Motors. And the International Monetary Fund downgraded its global economic growth forecast. Here at home it's as good as confirmed that the UK is richer than it has ever been (you literally have never had it so good, you lucky, lucky people). Do you feel richer than you did last year? How about last week? Or yesterday even? We'll find out at 09:30 with second quarter GDP, so stay with us.



BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.