Umsobomvu Youth Fund: briefing

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040914sclabour

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
14 September 2004
UMSOBOMVU YOUTH FUND: BRIEFING

Acting Chairperson:
Ms N Ntwanambi (ANC)

Documents handed Out
Umsobomvu Youth Fund presentation
The Umsobomvu Report - June 2004 Volume 2, Issue 2
Umsobomvu Youth Fund 2003 Annual Report (available on its website)

Umsobomvu Youth Fund website

SUMMARY
The Umsobomvu Youth Fund reported that it provided opportunities for young people to acquire skills, access job opportunities and pursue meaningful self-employment opportunities through contact information and counselling, skills development, and youth entrepreneurship programmes. About 600 000 young people had participated in its programmes, and it had funded about R583 million worth of projects. It also had partnerships with the private sector. Women had been the largest beneficiaries of programmes, while the major challenge had been managing stakeholder expectations. Its focus had shifted to partnering with the public sector to extend outreach programmes.

Committee Members asked questions about unspent funds, whether people accessed bursaries from the Fund, what measures had been developed to extend outreach to rural areas (especially in Limpopo province), and if the exclusion of other racial groups from the Fund's programmes was unconstitutional.

MINUTES

Umsobomvu Youth Fund briefing

Mr M Kekana, Chief Executive of the Umsobomvu Youth Fund (UYF), said the de-mutualisation levy proceeds capitalised the Fund, and was established in January 2001. In July 2001, the Government Gazette had amended the Demutualisation Act to exempt the UYF from income tax. The Fund provided contact, information and counselling to young people in terms of economic participation, skills development and transfer with the focus on national youth service, and school to work programmes. It had also been involved in youth entrepreneurship. It had also been appointed to facilitate the new venture creation learnership of government. A total of 10 000 young people had been trained so far. Core projects funded amounted to R583 million. The target was to create 50 000 jobs by 2006.

On the level of participation by the youth, Mr Kekana said 81 000 had participated in their Youth Advisory Centres out of a set target of 129 000; 3 400 had participated in Voucher programmes with a set target of 12 000 by 2006. With the Youth Internet portal, participation averaged 10 000 hits on a busy day, and 3 500 on a quiet day. 10 000 people of 20 000 target by March 2005 had been trained to start their business in the Youth Entrepreneurship programmes. 40 000 had participated in the skills development programme. A total of 600 000 youth had participated in their various programmes.

A major achievement had been a partnership with the private sector to raise capital. The partnership with the First National Bank Progress Fund started with R20 million, and had been increased to R140 million. Business partners had invested personal funds of about R25 million. Women had been the largest beneficiaries of their programmes as 50% had accessed micro-finance.

The plan for 2004 through to 2005 had been to create 17 000 jobs from the Small and Medium Enterprise programme, and increase women beneficiaries. The challenge had been managing stakeholders' expectations. With entrepreneurship education, the Global Entrepreneurship Monitor had ranked South Africa the lowest on all indicators compared to other developing countries like Brazil, Chile, Mexico, India and China. South Africa ranked low in terms of entrepreneurial activity, especially so amongst the youth and particularly black males. Ranked nineteenth out of thirty-seven countries surveyed, it was the lowest by any developing country around 6.45%. Thus the UYF had to increase entrepreneurial activity especially among the black youth. That had been the rationale for the introduction of entrepreneurial education. The Voucher programme in the form of mentoring or support had been running in five provinces. It had not taken off yet in KwaZulu Natal, North West, Mpumalanga, and the Free State, but was to start by the end of the month. It assisted young people with funding. Regarding the Youth Service, 5000 had to be trained this year. The School to Work targeted young unemployed graduates and matriculants to acquire life skills training in all fields. The UYF had partnerships with the Sector Education and Training Authorities (SETAs), and the private sector. The focus had shifted to the public sector to help extend outreach to the rural areas.

The UYF had twelve Youth Advisory Centres. There had been an agreement with the Department of Labour, and Government Communication and Information System (GCIS) to utilise all Labour Centres and the community centres respectively.

Discussion
The Chairperson proposed that the Committee meet with the UYF twice a year to enable a better understanding of its programmes. She asked whether with the School to Work programme, young people accessed bursaries to pursue certain skills, and whether the UYF had provincial offices, why the Fund had unspent funds, whether loans were payable or if it administered starter packs. She asked if the UYF could comment on the progress of the proposal from the Young People's Conference to have a single Youth Development Agency.

Mr M Mokena said the UYF did not offer bursaries directly to study at Technikons, but funded skills development training of the youth in private or public institutions. He said the UYF had provincial co-ordinators but not offices in the Eastern Cape, Mpumalanga, Limpopo, Gauteng and the North West provinces. One major problem of outreach had been the lack of clarity around the mandate of the Fund. The Fund had received a once-off allocation to be spent in five to seven years. There had been a policy shift towards strengthening Youth Development Agencies this year. The UYF needed to have a visible presence, rather than working though partners. There had to be clear policy intent regarding funding, and it had engaged in debates with the Board. The reality had been that young people required more capacity. Funds were to be spread over a five to a seven-year period, and as such the Fund could not possibly have spent all the money. By the end of 2005 the Fund would have up to R190 million of uncommitted funds to spend. Loans were payable, and the UYF had starter packs. Once a start up loan had been paid, subsequent loan amounts increased. Thirty-one South Africans own franchises started with loans averaging about R1 million. Regarding the proposal on the Youth Development Agency, there had been a resolution by Congress to strengthen the course of Youth Development. There had been a debate and a decision was to be taken in June 2005 on whether there ought to be one Youth Development Agency, a Youth Ministry, or that the Youth Commission ought to have Chapter nine powers.

Mr D Mkono (ANC) asked if the UYF was involved with sports development

Mr D Botha (ANC) asked that in an area like the Limpopo province, which was vast and rural, with no internet facilities, coupled with a lack of Youth Advisory Centres, how the youth got in contact with the UYF. He also asked whether those that were trained worked with the UYF for a while or joined the labour market immediately

Ms J Terblanche (DA) asked whether it was not unconstitutional for UYF programmes to target black youth, while neglecting other racial groups, such as poor white youth from poor communities.

Mr M Kekana said the UYF had initiated a sports for all programme in KwaZulu-Natal with the Durban Institute of Technology, which had trained young people in sports marketing, coaching and administration. There had been problems of placement, and it had received support from South African Voluntary Education and Training and other organisations that conducted feasibility studies to look at mass based sports programmes. There had also been discussions with the Department of Sports, and also a programme piloted in KZN. Regarding rural outreach, UYF had mobile units that reached 600 000 young people in seven months. The strategy had been to invest more in mobile units to target rural areas. There had been talks to develop offline data transmission capability using satellite network, but this required sponsorship. The UYF launched a programme last year with the South African Council of Churches where two hundred and twenty two young people organised talks in churches about the Fund. The UYF partnership with the mining areas and the private sector assisted with work experience during training, and had been looking at job placement services. He said Africans are beneficiaries of their programmes. The Youth Cards that provided discounts in terms of transport was for all South Africans. Poverty must be clarified not in terms of race, and those were policy areas. He could not comment on the unconstitutionality of the UYF but was of the opinion it was a legitimate concern.

Chairperson asked about UYF programmes in the Western Cape.

Mr M Kekana said the Western Cape had been the biggest beneficiary of UYF programmes. He mentioned the Paarl Youth Advisory Centre, the Community radio, a bakery run with SASCO, a Youth Service in Khayelitsha and Mossel Bay. The UYF had a partnership with Investec Bank to run a voucher programme. 40% of people with access to franchise funds had been from the Western Cape.

Mr D Botha cautioned that the Committee guard against policy that bred a new kind of exclusion.

The Chairperson said in the future, Members would be given the information prior to the meeting.

The meeting was adjourned.

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