Youth Unemployment in South Africa: A VUCA Challenge in a Local Economic Development

2.1 The VUCA analysis

2.1.1 Volatility

Volatility refers to the rate and magnitude of change in the key conditions that affect youth employment (Kim et al., 2019). In South Africa, youth unemployment is highly sensitive to economic cycles, infrastructure constraints, energy insecurity, and global shock. South Africa has experienced persistent volatility in economic growth owing to energy insecurity and logistics challenges. Load shedding has reduced production capacity in labor-intensive sectors, particularly manufacturing, retail, and hospitality, which are entry points for young workers (World Bank, 2025). Youth unemployment is highly vulnerable to short-term shock. The recent tariff introduction (tariff war) by the United States of America also presents another market volatility, which, of course, will impact job creation. The global demand for South African products is shrinking, which means fewer jobs, especially for the youth. Policy responses must be agile and responsive, including counter-cyclical measures, such as public employment programs and targeted SME support.

2.1.2 Uncertainty

Uncertainty reflects the unpredictability of future scenarios despite the availability of information (FeldmanHall & Shenhav, 2019). In the case of South Africa’s youth unemployment, fiscal, technological, political, and policy uncertainties all shape the outcomes. While initiatives such as the Presidential Employment Stimulus (PES), Expanded Public Works Programme, Community Work Program, and Presidential Youth Employment Intervention (PYEI) have created millions of temporary opportunities, their long-term sustainability remains uncertain due to fiscal constraints and changing priorities (Presidency of South Africa, 2022). The political instability and uncertain future of the Government of the National Unit also pose a threat to the sustainability of government programs aimed at creating employment opportunities. Decision-makers should integrate scenario planning, flexible skills development strategies, and diversification policies to navigate this uncertainty and prepare youth for shifting labor markets.

2.1.3 Complexity

Youth unemployment in South Africa arises from a complex web of structural, spatial, educational and economic factors. Poor foundational educational outcomes and skill mismatches remain central drivers (Maphela & Adanlawo, 2025). Youths with only matric experience unemployment rates exceeding 35%, highlighting gaps in the transition from education to work (Statistics South Africa, 2025b). Spatial disparities compound these challenges, as youth in rural areas face significantly higher unemployment due to transport, digital access, and weaker employer networks (Statistics South Africa, 2025c).

Infrastructure constraints, particularly in energy and transport, undermine SME growth, which is a critical job creator for the youth (World Bank, 2025). Gender dynamics add another layer: young women face additional barriers linked to childcare, safety in commuting, and gendered labor markets (International Labor Organization [ILO], 2025). Effective solutions must be systemic and multi-sectoral, integrating education reform, infrastructure investment, and gender-responsive design.

2.1.4 Ambiguity

Ambiguity arises when information is incomplete, contradictory, or open to multiple interpretations and views, thus making decision making difficult (Arend, 2020). One source of ambiguity is the impact measurement. Public employment opportunities, such as education assistant posts and Community Work Programme and Expanded Public Works Program initiatives, are often counted as “jobs”, even though they are temporary and short teams and may not lead to permanent employment (Presidency of South Africa, 2022). This leads to conflicting narratives regarding the effectiveness of interventions. Policymakers and stakeholders must clarify goals, metrics, and responsibilities to reduce ambiguity and ensure coherent and coordinated interventions. Job, work opportunities, and employment opportunities need to be well described to avoid confusion.

3.1. National trends, levels and historical trends

The latest data show that official unemployment rose from 33.2% in the first quarter to 2025 32.9% in the second quarter of 2025. Youth aged 15–24 years recorded a 62.2% unemployment rate, and 25–34-year-olds 40.5%. Expanded unemployment (including discouraged workers) remains above 42% (Stats SA, 2025a). In South Africa, youth unemployment has a ripple impact on other social issues, such as crime and drug abuse (Nyalungu, 2025; Sibanda & Batisai, 2021). In the absence of employment opportunities, young people tend to resort to criminal activity and drug abuse. In terms of historical unemployment trends, the following summary is provided.

Apartheid Era 1948–1994 - Black South Africans were systematically excluded from quality education and formal employment (Reddy & Mncwango, 2021). The Bantu Education Act (1953) limits educational opportunities for the majority, creating a legacy of poor skill development. Economic policies prioritized white labor and marginalized black youth, denying them access to skilled jobs.

Post-Apartheid Transition (1994–2000s) – The South African government focused on redressing inequalities through policies such as Black Economic Empowerment (BEE) and outcome-based education (OBE) (Nkomo, N. Y., & Adanlawo, 2024). However, the economy struggled to absorb this growing population. A mismatch between the education system and labor market needs, along with slow economic growth, has worsened youth unemployment.

In 2008 Global Financial Crisis - The 2008 global recession hit South Africa hard, leading to significant job loss (Lin et al., 2012). Youths, especially those with limited experience or qualifications, were disproportionally affected. At that time, informal employment was a common fallback.

In 2010 till Present - the government established various initiatives, such as the National Youth Development Agency (NYDA), Expanded Public Works Program (EPWP), and Youth Employment Service (YES), despite all youth unemployment remaining persistently high (Chitiga-Mabugu et al., 2025; Marock et al., 2023). Structural issues remain a challenge: low economic growth, weak job creation, and inadequate education and training systems continue to hinder progress.

COVID-19 Pandemic (2020–2021) - The pandemic worsened the crisis, with massive job losses, particularly in sectors such as retail hospitality, where most youth were employed (Cook et al., 2021). Digital inequality further excludes many young people from remote learning and work opportunities.

Post Covid-19 Realities – 2021 – Present - Sadly, in the post COVID-19 era, the realities of youth unemployment in South Africa have become more structurally entrenched. Today, many young people confront a “new normal” where competition for scarce jobs is fiercer, entry-level wages remain depressed, and informal or gig work becomes the fallback (Adanlawo & Maphela, 2025). For example, even as economic activity has partially returned, youth unemployment is estimated to linger at around 55%. This figure is now seen by many as a structural baseline, rather than a shock-induced spike. In reality, unemployment has reached stubborn levels in South Africa.

4.1 Education quality and transition to work

Weak foundational learning, low completion rates, and limited access to quality technical and vocational pathways undermine employability (Adams & Yu, 2024). In fact, these are fueling the scourge for youth unemployment in the country. Mismatches persist between curricula and firm needs, especially in the digital, artisan, and green skills domains. International evidence shows that structured work-based learning, apprenticeships, and employer-led curricula increase transitions to first jobs (Garnett, 2020); Private platforms have started to scale these in South Africa, but coverage remains insufficient relative to need. Without fixing these factors, youth unemployment remains a concern. Thus, there is a need for structural reform.

4.2 Information frictions and search costs

Young workers face poor information, high transport costs, and weak signalling skills. Digital matching platforms (e.g., SAYouth.mobi) have reduced friction and connected millions to opportunities since 2020 (Kiss et al., 2024). However, data costs, device access, and local employer density still limit the impact outside the metro. Organizations such as Harambee and the National Business Institute must be accelerated to connect and network youths with various job opportunities. There must be a focus on the youth in rural areas. Various Wi-Fi installation programs in rural areas must be accelerated to ensure that the youth in rural areas are not left out. The government must balance rural and urban service delivery.

5.1 Private sector: Job creation and market access

Private companies, including multinational corporations, are central to stimulating demand-driven employment (Shezi et al., 2025). They drive opportunities within the sector and create direct job opportunities through inclusive hiring, graduate placements, and internships. The private sector has the highest number of employment opportunities compared to the government sector. Sectoral initiatives in fields such as ICT, banking, agriculture, the green economy, and construction often provide entry points for young people (ILO, 2025). Private sector actors also help align training to market needs, ensuring that skill development initiatives lead to real jobs, not just certificates.

5.2 Public sector: Enabling environment and policy instruments

The government’s role in the creation of youth employment opportunities is multi-fold (Dhoba et al., 2025). Government departments and municipalities provide a policy framework, incentives, and infrastructure that create an enabling environment for youth employment. Through public employment programmes such as the Expanded Public Works Programme and youth wage subsidies such as the Employment Tax Incentive (ETI), which provide tax credits for employers hiring youth workers aged 18–29, the state plays both a direct employment and facilitative role (Marock et al., 2023). The government is also central to driving hundreds of Public-Private Partnerships. Partnerships include sectoral training initiatives. The Gauteng provincial government has partnered with all institutions of higher education to train thousands of youths across the province. The government is also one of the largest creators of employment opportunities (Stats, 2025a).

5.3 Educational institutions and training partners: Skills pipeline development

The role of higher education institutions in youth employment creation cannot be sufficiently stressed enough (Sumberg et al., 2021). Universities, Technical and Vocational Education and Training (TVET) colleges, and accredited training providers act as key intermediaries by equipping young people with relevant on-demand skills. When they partner with industries, curricula can be aligned with sector-specific demands, ensuring employability. Strategic collaborations with sectors such as manufacturing and technology have led to internships, apprenticeships, learnerships, and artisan development programs that mainly target unemployed youth (Mayombe, 2022). These partnerships not only build capacity, but also bridge the gap between education and employment. Programmes such as the Municipal Internship Programme implemented by the Department of Cooperative Governance and Traditional Affairs, the Water Leaks Ambassadors by Rand Water, and the Treasury’s Internship Programme have proven effective in boosting capacity in municipalities. These programs were developed in partnership with educational institutions.

5.4 Civil society and development partners: Advocacy, Bridging and support services

Non-governmental organizations (NGOs), foundations, and development agencies often play bridging and advocacy roles (Desai, 2024; Mayombe, 2022). In particular, the International Labour Organization (ILO) has provided reliable data on effective employment creation methods and practices worldwide. Such organizations are able to identify marginalized youth, provide support services (such as mentorship, psychosocial support, and job search assistance), and advocate for inclusive labor policies (Desai, 2024). Initiatives supported by such organizations and various donor agencies help place young people in small businesses and community-based projects, thus amplifying opportunities at the grassroots level.

6.1 National frameworks, employment stimulus and activation

The National Development Plan 2030 sets an employment-rich vision; the National Youth Policy (NYP) 2020–2030 provides a cross-sectoral lens for youth development; and the NYDA Strategic Plan 2025–2030 prioritizes enterprise support, skills, and pathways into work (NYDA, 2025). Additionally, the Community Work Program comments on the creation of over 200 000 employment opportunities, and the Expanded Public Works Program is committed to creating millions of employment opportunities. Since 2020, the Presidential Employment Stimulus (PES) and wider PYEI have supported over two million work and livelihood opportunities, with the majority being taken up by youth and women. These programs provide income relief and work experience while improving public services (e.g., education assistants) (Presidency, 2022). Independent and donor evaluations find positive local stimulus and employability effects, but sustainability depends on pathways to private sector demand (Agency Francaise de Development [AFD], 2024).

6.2 Private and social-partner innovations

Harambee, the National Business Institute, and the SA Youth platform report millions of young people supported to access jobs, self-employment, training, and work-seekers’ services, generating substantial income flows. These networked platforms have lower friction, standardized assessments, and enable demand-led skilling (Harambee, 2026). The challenge is aligning these with local industrial and infrastructure strategies, so that more entry-level opportunities exist.

7.1 SDG 4 – Quality education

Priorities: raise foundational literacy/numeracy; scale employer-led TVET, apprenticeships, and short-cycle credentials; link stipends/internships to verify workplace learning (Saini et al., 2023). Targets include 4.1 (learning outcomes), 4.3 (equal access to TVET/HE), and 4.4 (skills for employment).

7.2 SDG 8 – Decent work & economic growth

Priorities is broadening labor-intensive growth, reduce NEET (Target 8.6), strengthen entrepreneurship/SME finance, and expand active labor-market policies (ALMPs) including wage subsidies and work-seekers’ support services (Vaughan, 2025).

7.3 SDG 9 – Industry, innovation & infrastructure

Priorities are to fix energy and logistics, invest in industrial parks, digital connectivity, and maker/repair hubs in townships and rural towns, and catalyze supplier development and local content in green and care economies (Edbais & Hossain, 2025). Targets include 9.1 (reliable infrastructure), 9.2 (inclusive industrialization), and 9.3 (ICT access).

8.1 Transformational leadership (vision & mobilization)

Set a compelling, measurable national mission: “Two million additional quality youth jobs by 2028,” with province-level allocations, public dashboards, and social compacts to crowd-in private commitments. Transformational leadership aligns stakeholders with clear outcomes and energizes collective actions (Heenan et al., 2024).

8.2 Adaptive leadership (learning under uncertainty)

Use rapid cycles: test interventions (e.g., transport vouchers, hiring incentives, micro internships), publish results, and pivot quickly. Build “authorizing environments” that protect experimentation in public employment and skills budgets (Schmitt & Pauknerova, 2026).

8.3 Distributed leadership (networks & local capability)

Empower municipalities, Technical and Vocational Education and Training (TVET) colleges, business chambers, and youth-serving Non-Governmental Organizations (NGOs) to co-own delivery. Establish “Youth Employment Action Forums” in each district to coordinate demand pipelines, matching, and support services backed by transparent data (Azorín et al., 2021; Brown et al., 2021).