Address by KwaZulu-Natal MEC of Finance and Economic Development, Dr Zweli Mkhize, during the fourth annual Future Leaders Youth Entrepreneurship Conference held at the Curries Fountain Stadium, from 8 to 10 June 2007

EThekwini Municipality Mayor, Cllr Obed Mlaba
University of KwaZulu-Natal Vice Chancellor, Professor M Magoba
Chairperson of the Youth Commission, Mr Nhlakanipho Ntombela
Chairperson of Future Leaders Board, Mr Andile Mbeki
Future Leaders Training Manager, Mr Ndabenhle Myeza
Representatives from government departments and the private sector
Distinguished guests
Members of the media present
Ladies and gentlemen

Programme Director, it is my great pleasure to be part of this occasion, especially considering that throughout the month of June, the provincial government has lined up a series of events aimed at inculcating the culture of entrepreneurship amongst young people.

The International Labour Organisation (ILO) conducted a study on world employment between 1998 and 1999. The findings of the study indicated that youth unemployment rates can be as higher as three times the adult rates. The same study revealed that unemployment is consistently higher for female across different age groups (15 to 19; 20 to 24; 25 to 35). In South Africa, the study found that 90% of young people who were unemployed were Africans. As we celebrate youth month we need to reflect on such studies with the view of assessing progress made and challenges we are facing as we deal with youth unemployment.

The adoption of the implementation plan for the National Youth Service (NYS) by Cabinet in 2003 gave effect to the establishment of the national service unit.

The unit is tasked with the responsibility of co-ordinating the implementation of the NYS Programme. With the assistance of Umsobomvu Youth Fund (UYF), the national service unit continues to ensure:

* the training of many officials both in government and in the private sector on how to identify and implement youth empowerment projects
* to enable young people to access economic opportunities
* to develop the skills and knowledge of young people to enable them to be active participants in the reconstruction and development of this country.

The economic growth in this province is linked to the development and empowerment of young people. On Wednesday, the provincial government hosted the Provincial 2010 Soccer World Cup Strategic Indaba.

It is estimated that the 2010 World Cup will inject more than R50 billion into the South African economy. We have taken a decision as government to ensure that young people are properly empowered with skills so that they are able to benefit from the economic spin offs generated by the tournament.

There was a great deal of discussion on the issue of stimulating economic growth in various district municipalities. Small Medium and Micro Enterprises (SMMEs) and co-operatives are set to benefit from the upgrading of stadiums and construction of multi purpose sports facilities.

We have always reiterated as provincial government our commitment to supporting youth owned SMMEs and co-operatives. I challenge you today to consider what role you can play to make sure that at least five job opportunities are created during 2010 Soccer World Cup.

A total of eight soccer world cup matches will take place in the province attracting more than 100 000 soccer fans from all over the world. There are endless opportunities for young people in the following areas:

* Food and beverages: major KwaZulu-Natal based food and beverages producers have agricultural resources to draw within the province and have been able to access the international markets. During 2006 Soccer World Cup in Germany, 105 600 litres of beer were sold in the 12 stadiums. 5 500 000 drinks in returnable cups were also sold.

* Tourism: tourism is a R3,3 billion plus industry in KwaZulu-Natal. South African tourism industry contributes 7% to the Gross Domestic Product (GDP) and is destined to grow to 12% by 2014. About 8,4 million tourists landed in South Africa in 2006, one million more than in the previous year, 2005. In recent years tourism has grown by about 10% annually which is about twice the global tourism growth rate. We can only maintain the predicted dramatic growth in the tourism industry if more young people get involved.

* Information Communication and Technology (ICT): the Internet is currently being used by more than one billion people world wide and it has become a dominant infrastructure technology for communication. During the 2010 Soccer World Cup we want young people to be involved in the provision of cabling throughout the stadiums, copper wiring for network and installation of communication points and Integrated Services Digital Network (ISDN) and internet connections.

As we approach the 2010 Soccer World Cup all government departments are providing wide ranging programmes aimed at ensuring an effective participation of young people in the economy of before and even after the world cup. These involve:

* partnerships with various stakeholders such as UYF, national and provincial youth commissions
* creating and attracting possible market and business opportunities for young entrepreneurs
* exposing youth entrepreneurs to economic opportunities through various SMMEs, fairs, conferences and exhibitions such as future leaders and the National Entrepreneurship Development Conference which is scheduled to take place between the 19 and 22 June at the Inkosi Albert Luthuli International Convention Centre (ICC)
* the staging of district information sessions as part of the National Youth Entrepreneurship Campaign 2010.

In staging such events we've always ensured that government officials involved in supply chain management are available to share information with young entrepreneurs on how to access businesses in government. All provincial departments have established supply chain management units and are now better placed to actively promote the provincial government's economic development policies.

Provincial government has a direct influence over 63 percent or a R7,5 billion procurement budget. We have ensured that our procurement prescripts and strategies are designed in such a way that we are able to spend more aggressively to drive youth empowerment programmes and Black Economic Empowerment (BEE).

We can only say our efforts of inculcating the culture of entrepreneurship are bearing fruits if more and more emerging entrepreneurs exhibit their products and services during events such as Tourism Indaba, International Trade and Investment Conference and Exhibitions. These events have attracted the attention of international and national delegates and are excellent marketing platforms for young entrepreneurs.

Skills revolution

Our effective participation in the global economy as the province is dependent on how the four following things interact: information technology, knowledge production, human resources and institutions.

Because it is increasingly becoming clear that knowledge production has become central to globalisation and to economic development, on 22 May 2007, role-players from the private sector, national, provincial and local governments gathered in Durban for the Skills Revolution Indaba. This formed part of our continuous assessment of our institutions and the education system. As government we are of the view that it is incumbent upon us to put in place an education plan that is pro-globalisation. Globalisation is redefining the skills and knowledge that students and workers need. Companies are following talent whether that talent is here in South Africa or any other country.

The Draft National Plan for Higher Education released by the Department of Education in 2001 revealed a shortage of high level professional and managerial skilled personnel in the country. The plan predicted the growth rate for professional and managerial occupations of 9,5% and 6,2% between 1998 and 2003. The growth rate for artisan occupation was expected to be 3,9% and unskilled and semi skilled work was expected to decline by 3,4%.

The big question is, have we produced enough graduates in economic based field, science and engineering to compete in the global market place?

The demand for skilled young people especially in above fields is expected to grow sharply as we approach 2010. The average age of an artisan today in South Africa is about 54, compared to about 26 in the 1980s. Projects linked to the Soccer World Cup more especially infrastructure development present many opportunities for young people. Already the Engineering Council of South Africa has indicated that the country needs to produce 2 500 engineers annually in order to meet the demand.

As I remarked during Skills Revolution Indaba, skills development has a key role to play in the economic empowerment of our people. Failure in the skills development front of economic empowerment will constrain progress on all the other fronts and render gains made on them untenable and unsustainable in the longer term.

From the point of view of entrepreneurship and small business development, the skills shortage in the trades and artisanal spheres might pose an even bigger problem than skills shortage in the high skill professional sector. We now have about half the number of artisans we had in the late 1980s, although the economy is much bigger now than it then was.

Conclusion

I then wish to thank the organisers of this important gathering and I believe that your interaction would come up with practical strategies that would help young people realise their business dreams. As government, we want to reiterate our support and together we can build a winning province that is ready for 2010 and beyond.

Thank you!

Issued by: Department of Finance and Economic Development, KwaZulu-Natal Provincial Government
8 June 2007