1. What happened in the South Africa election on May 29?
In May, South Africa’s ruling party, the African National Congress (ANC), which has been in power for the last 30 years, received only 40% of the vote. That’s short by a good 11% for them to be able to rule and govern as a majority government going forward.
2. What issues contributed to the election result?
There are two main issues. One is purely political. Jacob Zuma is very popular and has always been in the KwaZulu-Natal area and Mpumalanga. When he set up his party, it was evident that he would get those votes. The ANC can do nothing about that, so we’ll park that.
Economically, though, many challenges in South Africa contributed to this outcome. Since COVID, businesses have taken a hit. Many businesses closed during this period, including middle-sized businesses that employed youth and other people. Many of these businesses have yet to recover fully. The biggest employers remain the government and the large companies that made it through COVID. So, South Africa’s economy is such that we do not have as many small and medium enterprises.
The loss is also related to unemployment. There’s a massive issue of unemployment in South Africa, and things have gotten worse. Unemployment at the moment is 41.9%. That’s general unemployment. If you zero in on youth unemployment, ages 15 to 34, it is 59.7%. And unemployment also depends on where you are. It’s better in the commercial hubs, and it’s much worse in the rural areas. In rural areas where TechnoServe used to work on the Zimele program, youth unemployment would reach about 70%.
On top of that, young women are most vulnerable. They struggle to get jobs, and it’s for a variety of reasons. Sometimes, they have children early, then they’re married off. Sometimes, even if they’re in school, they have to do household chores after school. It affects their grades and their employability.
3. Why does South Africa have the world’s highest unemployment rate?
We all know the history of apartheid in South Africa. That’s one of the primary reasons we still see such high levels of unemployment. And it’s both on the supply and the demand side. Sometimes, people’s skills and education levels are not where they need to be. And sometimes, it’s demand: there are not enough corporations in South Africa to employ the number of people we have.
We must always remember South Africa’s history. The industries that were developed were to serve a much smaller number of people. But there are a lot more people now. And the core structure of South Africa was not made to employ such high numbers. That’s why the biggest employer remains the government because it’s been able to pivot and take in more people. But that’s not even what you want, is it? The government should create an environment where business thrives and employs, not that the government employs. That’s why TechnoServe believes it is essential to support the establishment of small businesses.
4. What can be done to address these economic problems?
The government will have to think differently. It has implemented many programs to support youth and small businesses, but they’re not enough. It needs to be coupled with the kind of work that TechnoServe does. We partner with some government programs to work with youth, especially women and young men, to ensure that they use the assets they get from the government properly to generate income and improve their lives.
5. What are the areas of opportunity in the South African economy today?
It’s mostly about energy. That’s why South Africa went to the “just energy” transition. I think a lot of money and effort will go into energy. There’s the whole trend of moving away from coal. Everybody’s moving to other renewable energy sources, and we have a role.
One solution is to reskill people in these areas and work with them to teach them how to run a business and work for themselves. How can we work with people in the “just energy” transition, and how can we play a role there? We’re looking at businesses experimenting with alternatives to coal, teaching them how to run a business and operate effectively, and positioning them to take over even as more people move away from coal and start to use new energy sources.
6. What’s an example of one of the green businesses we’re working with?
One of the key things we want to do as a country is recycle—putting money back in the hands of the people while protecting nature, climate, and people.
We want to work throughout the value chain by educating households on separating at the source and working with the small recyclers who pull a trolley on the street, collecting paper and plastic. From the small collectors, we go to the buy-back centers, which are your businesses that do the actual collection and sorting and then sell to the recyclers. So, it’s a very exciting project that we want to work on. Increasing the recycling volume will have a tangible impact on the country’s economy. We’re hoping that the money trickles from the big organizations and recyclers right down to the bottom of that value chain, where the people are actually collecting the trash on the streets.
7. What reaction have you seen to the election among the people we work with in South Africa?
It’s really business as usual. The people that TechnoServe works with—our clients—need to make money to feed their families, buy school uniforms, pay school fees, and do all the things that we do daily. So yes, the elections came and went. People went and voted. On the streets, there’s not a lot of discussion about the elections. There’s a lot about, “where do I get the next lot of money to do the next lot of things I need to do?”
That’s where our clients’ minds are. People are excited when we offer our programs because they see it as an opportunity. They see us giving them an opportunity through the training to do something different and change their lives and the lives of their children, who will, in turn, look after them.
As Regional Director for Southern Africa, Pamela Chitenhe leads the expansion and deepening of TechnoServe’s impact in the region. Prior to TechnoServe, Pamela was the Africa Regional Director of DuPont Pioneer. She lives in Johannesburg, South Africa.
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