Agency warns modest GDP gains fail to tackle youth joblessness
South Africa's National Youth Development Agency (NYDA) is pressing government to adopt a more unified, youth-centred approach to economic policy, arguing that the country's current growth path leaves millions of young people locked out of opportunity.
The appeal follows the South African Reserve Bank's Monetary Policy Committee (MPC) decision to hold the repo rate steady at 6.75%, choosing caution in the face of turbulent global conditions and mounting economic risks. The MPC pointed to the recent eruption of conflict in the Middle East as a trigger for a major global supply shock, which has driven up prices of critical commodities such as oil, gas and fertilisers while dampening worldwide growth prospects. These pressures are anticipated to push inflation higher in the near term and constrain economic activity.
Although South Africa posted economic growth of 1.1% in 2025, the NYDA maintains that such modest expansion falls far short of what is needed to confront the nation's entrenched structural problems — chief among them, stubbornly high youth unemployment. The agency argued that the current growth trajectory is neither inclusive nor transformative, with vast numbers of young South Africans still shut out from meaningful economic participation.
"Inflation remains contained at around 3% but is expected to rise temporarily due to higher energy prices, with fuel inflation projected to increase sharply in the coming months. While this reflects external cost pressures, it will have direct consequences for young people, particularly through rising transport and food costs, which disproportionately affect low-income households."
The agency acknowledged that keeping interest rates unchanged represents a prudent monetary policy stance, but stressed that such tools alone cannot resolve the deeper structural challenges confronting the economy. It warned that the combination of sluggish growth, escalating costs and scarce employment opportunities threatens to deepen the socio-economic vulnerabilities young people already face.
Calls for coordinated policy action beyond rate adjustments
From a developmental standpoint, the prevailing economic climate reinforces the urgency of a more coordinated, growth-oriented policy response, the NYDA said. Supply-side disruptions driven by global conflicts cannot be addressed through interest rate decisions alone, the agency argued, calling instead for complementary fiscal, industrial and social policy measures designed to bolster domestic resilience, expand productive capacity and foster inclusive growth.
Among its central proposals, the NYDA is pushing for accelerated public investment — particularly in infrastructure and industries with strong job-creation potential. It also urged targeted assistance for youth-owned businesses to cushion the blow of rising input and operational expenses. The agency further emphasised the need to strengthen programmes offering work experience, skills development and clear pathways into employment, especially for first-time job seekers.
"Economic recovery must be measured not only by inflation outcomes, but by the extent to which it creates jobs, supports enterprise development, and improves the economic participation of young people."
The NYDA insisted that macroeconomic policy and youth development goals must be brought into closer alignment, maintaining that economic strategies need to explicitly confront the barriers young South Africans encounter. The country's youth unemployment crisis is structural in nature and demands deliberate, sustained policy action that extends well beyond short-term stabilisation measures, the agency said.
South Africa's stalled growth of 1.1% alongside rising energy and food costs threatens to deepen hardship for the country's young population, who already bear the brunt of structural unemployment. For businesses, higher input costs and constrained consumer spending could further limit hiring and expansion, particularly among small and youth-owned enterprises. Whether government can align macroeconomic policy with targeted youth development measures will likely determine the pace and inclusivity of any meaningful economic recovery ahead.
