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Youth bulge and the burden of youth unemployment

When 3.4 million young South Africans are unemployed, not in training or education…what comes first? 


…Substance abuse?

…Burden of Disease? 


…Broken families? 

…Social unrest? 

…Mob Justice? 



What do you do when you’re young, destitute, unrepresented and hungry?

Crime in South Africa…
…criminal minds?

…or a cry for help?

What do you do when you’re young, destitute, unrepresented and hungry?

In SA, young people aged 16-24 are 3 times more likely to not find employment as compared to the rest of the population. National statistics reveal that the longer young people stay unemployed, the more they become unemployable and with an estimated 3.4 million young people not in employment, not in training or education…that is 3.4 million mouths and empty stomachs looking for answers and when they can’t find them…expect more and more of this…

Man jumps into sea at Muizenberg to escape armed youths

…or this

Fake cops rob Cape Town restaurant

…and even this 

Shop owner shot dead in China Town robbery

Growth strategies for township entrepreneurs by Thandi Skade

With estimates valuing South Africa’s township economy at around R220 billion, there’s massive scope for small business growth.
But, as Gauteng MEC for Economic Development Lebogang Maile notes, the lion’s share of this money leaves the township and ends up in the hands of those who control the means of production.

“Reviving the township economy means we need to do things differently,” Maile told the Financial Mail. “We need to get more of our small and medium enterprises to participate in the value chain, because as long as the value chain is dominated by a few big white companies we will not be able to change the structure of our economy.”

Unlocking the full potential that the township economy offers requires rethinking your approach to business from a survivalist entrepreneur to an enterprise owner. This, says Pavlo Phitidis, CEO of Aurik Business Incubator, means building an asset of value.

Here are four strategies that will help you do that.

1) Identify and act on opportunities

Forget about the business plan, says Raizcorp founder and CEO Allon Raiz.

Rather, he says entrepreneurs should focus on spotting and acting on opportunities that present themselves.

“Our society has created a myth around the value of a business plan, post it being written. There’s huge value in writing a business plan, but if you perceive that plan to be a reality, that’s problematic because everyone knows that once you complete the plan, reality and the plan completely diverge from that moment onward,” he said in an interview with Wealth Wise magazine.

“To act on an opportunity is far more important than what was written in a document. The skill of linking things together and seeing opportunities is something we should teach our kids and entrepreneurs.”

2) Effective bootstrapping

Tiisetso Maloma, an entrepreneur and co-author of Township Biz Fastrack, says starting small is best. Be strategic in the product or service you choose to offer, and be enterprising with your skills to grow your business one block at a time to minimise your risk exposure.

As the business grows, you keep reinvesting in the business and you’ll be in a better position to take bigger risks.

“Selling one or few products gives you an opportunity to learn greatly about business with minimal risk in investment. Feedback from customers will help you improve your service and product,” he says.

3) Work on the business, not in the business

Many entrepreneurs struggle to let go of the reins and insist on overseeing every aspect of the business. The problem with this though, Maloma notes, is that you wind up working in the business instead of focusing on growing that business. He says establishing business automation is central to taking your small business to the next level.

“Automation means putting processes in place that can be run by employees, even when you aren’t physically present. The business can transact without your presence. By so doing, you are passing on skill and intelligence to your employees. Intelligent and empowered employees mean that they can help you think and analyse trends in the business,” he says.

4) Get validation

Having a firm understanding of what your customers want should be the compass that guides your expansion direction and links closely to bootstrapping effectively.

“Consumers always communicate their consumption preferences, business owners just have to listen and/or ask. Asking and listening are simple but powerful tools to get information on what the market is willing to spend on,” Maloma advises.

Sources: Financial Mail, Township Biz Fastrack, Wise Wealth

Study shows that Corporate SA engaged in malicious compliance and gate-keeping to keep blacks away from the table

THE Black Management Forum has bemoaned SA’s lack of transformation and co-produced a study with financial services firm Deloitte to prove its point, it said in Johannesburg.
The forum, considered a staunch champion of transformation, also decried the fact that “this country doesn’t look like us (black people) … we are worried”.

The forum would use the findings of the study, Transformation Barometer, to agitate for more change in government, the private sector and elsewhere, it said.

Corporate SA, according to the barometer, engaged in malicious compliance and gate-keeping to keep blacks away from the table.

In addition, the country’ s poor education system continued to trip up blacks.

Deloitte’s Sandile Gwala said the country was far from being transformed and the research was necessary to confirm this.

The forum said that the country needed to shift away from ticking boxes adding that “companies half-heartedly comply (with transformation requirements)”.

Forum president Bonang Mohale said that the forum would devise a master plan based on the study’s findings, which it would release soon.

Labour law consultant Tom Healy said: “One area that needs attention (in terms of transformation) is employment equity. If companies looked more at quality, then transformation could happen at a quicker pace.

“It has become all about points and status.”

Economist Azar Jammine said that he agreed with the forum calling on businesses to take more responsibility for the development of skills as this was what would lead to “true transformation”.

Mr Jammine also said there was a need for a coherent industrial policy, a point that was also raised in the barometer.

“The policy should be relooked at completely,” said Mr Jammine.

He added that, so far, policy only focused on a handful of sectors and big businesses.

That emphasis was a shame because smaller entities employed many people.

The barometer focused on four sectors: agriculture, mining, manufacturing and financial services.

In the financial services sector, the study found that there were too few black managers because many whites were either the owners or sole practitioners of small firms.

Although the mining industry demonstrated a high level of transformation, the study found that it had many junior black managers.

Manufacturing required more transformation at top, senior and middle management.

In 2012, a JSE study found that black investors held 9% of the top 100 listed companies.

This year, the Presidency and the Department of Trade and Industry put the figure at 3%.

BoP startup accelerator opens in Cape Town

Applications have opened for the New Economy Accelerator (NEA) programme, aimed at assisting businesses in South Africa servicing the low income sector, or base of pyramid (BoP).
Startups serving the low income sector with high social or environmental impact can apply to the New Economy Accelerator by August 27, with the programme running from October 1 until April 30 next year.
The programme is seeking applications from innovative startups in the sectors of agriculture, recycling, waste treatment, financial inclusion, retail and economic inclusion, tech and digital inclusion and renewable energy.

“NEA is a platform for nurturing the emergence of a new economy, one that challenges the status quo to build a more inclusive and sustainable economy,” the organisers said.

“Our mission is to catalyse this new economy so that it can create new opportunities, through the cultivation of relationships, experimenting and changing the realities faced by local communities. We aim to achieve this through an accelerated programme that champions growth, encourages collaboration, advances community, facilitates dialogues, drives scale and rewards global innovation.”

NEA is coordinated by AfriCGE as the African partner of a global movement, and aims to support 50 new economy initiatives over the next three years.

Source: Disrupt Africa

Materials for first shack-to-house conversion project

DPI Plastics has played an important role in improving the living conditions of residents of informal settlements after donating PVC building pipes and fittings to the first-ever shack-to-house conversion project in Kayamandi, Western Cape.
The test phase of the Kayamandi project, which was completed in March 2013, involved the conversion of a 23 m2 wooden shack into a solid 46 m2 double-storey home made entirely from ‘sand bag’ eco bricks built by 16 ‘off-the-street Kayamandi residents’ who were trained and supervised by an engineer from the Africa Responds Clearly Eco Homes team.

The project’s test subject, Norie Lungisa, who lived in the cramped and uncomfortable conditions of her shack with her two children for more than 10 years, is delighted with her new and improved eco brick home, which was officially handed over to her on 14 March 2013.

Cape Town-based construction materials supplier Penny Pinchers approached 16 of its most trusted suppliers, including DPI Plastics, to assist the Kayamandi project with various donations. As a socially responsible corporate citizen, DPI Plastics places a strong emphasis on supporting community development projects, notes the company’s marketing manager, Martine Goodchild.

She says: “DPI Plastics is committed to supporting projects that aim to uplift the living standards of fellow South Africans, especially with regards to adequate housing. The Kayamandi project supports DPI Plastics’ vision of building a better tomorrow, not only by providing residents with better housing facilities, but also by creating employment and skills development opportunities for locals. We also encourage the use of ‘green’ building materials that aim for energy efficiency within the home.”

Africa Responds Clearly Eco Homes spokesman Grahame Tomes highlights the fact that the new eco home is comprised of two upstairs bedrooms, in addition to an open plan lounge, dining and kitchen area and a bathroom.

“It is our plan to help the Lungisa family with the added benefit of receiving running water and a sewerage connection from the relevant authorities, once the authorities are able to generate enough budget to help the residents of Zone 14 in Kayamandi.”

Tomes explains that the Kayamandi eco house is built utilising the National Home Builders Registration Council (NHBRC)certified eco brick/eco beam building system, which employs eco bricks and eco beams that are plastered and painted.

“All eco brick houses are built with eco bricks that are 300 mm x 300 mm in size. The net result of such wide bricks is a home which is cool in summer and warm in winter,” he continues.

According to Tomes, eco brick homes address a number of serious challenges that are currently facing the South African affordable housing industry.

“The 300-mm thick walls provide a natural barrier to the harsh South African sun – even in temperatures exceeding 40 oC. The issues of rising damp, rain and even flooding are entirely eliminated with eco brick houses, as water cannot rise through sand. Instead, it is forced back downwards into the earth.”

Tomes points out that the construction of eco brick homes also empowers communities.

“Residents are provided with employment and skills development, while playing an important role in developing their community. Under this scheme, we are able to employ approximately 1 000 people per community over a three-week period. During this time, we train them and equip them with the necessary skills to build around 120 high-quality eco brick/eco beam homes per month, in each respective community,” he adds.

Another distinct advantage of eco brick houses is a reduction in overall costs, when compared to cement block houses.

“The current government subsidy of R84 000 for first time home buyers is sufficient to build a 50 m2eco brick or eco beam double-storey house. All the tests completed by the CSIR, the SABS and the NHBRC show that eco brick houses offer better performance specifications than those built with cement bricks and blocks or even steel structured houses,” says Tomes.

Despite their initial reservations, Tomes indicates that all 48 members of the Loyola Street Committee – where the transformed shack is located – are queuing up to have their shack homes replaced too.

“The building of this first ever shack replacement double-storey home has been an overwhelming success, and would not have been possible without the support of all of our generous donors. We offer our sincere thanks to them all.”

Black middle class has expanded quickly but may now slow – new IRR report

The IRR last week released a report on the size, growth, and likely future expansion of South Africa’s middle class.
The report relied on indicators ranging from household spending levels to workplace seniority, educational levels, medical insurance cover, internet usage, property ownership, banking patterns, and appliance ownership.
The report concluded, based on different definitions that might be adopted, that at most 2 in 10 South Africans could lay claim to a middle class standard of living although the IRR was more comfortable with the estimate that 1 in 10 South Africans lived a middle class standard of living.
Despite the small size of this middle class, there has been considerable growth in the black middle class, which has approached the size of the white middle class. However, the IRR warned that as a first generation middle class, the black middle class was very vulnerable to losing their status as a result of developments such as a sharp economic downturn or a period of rapidly rising interest rates.
The report also warned that the depressed domestic economic environment would put the brakes of any significant future middle class expansion. In addition, the fiscal crisis meant that the size of the civil service could not be extended as a black middle class incubator – a role it has played quite successfully over the past 20 years. The report, therefore, found that any significant future middle class expansion would depend on South Africa securing an economic growth turnaround. The IRR warned that such a turnaround was unlikely in the current domestic policy climate.
The IRR’s CEO, Dr. Frans Cronjé, said that “creating a policy environment in which any child born in South Africa might realistically aspire to reach a middle class standard of living should be the single most important priority for a South African government. The apartheid era government denied such aspirations to a majority of the country’s people. The post-1994 government has done better but too many areas of policy still undermine the educational outcomes, entrepreneurship, and investment-driven growth that is so important to unlocking access to the middle classes. That a child might aspire to reach a middle class standard of living should be seen as a moral as well as a social, economic, and political imperative. There is no doubt that under the government’s current policy framework this imperative is not being met”.

Statement issued by the Institute of Race Relations

Contact IRR head of media and public affairs Mienke Steytler at if you would like a copy of the report.