Investor, author and small business expert, Pavlo Phitidis, tells OFM News the idea of being young and owning your own business without having prior work experience is one that is sold largely by the South African government, which has failed to support a thriving economy that offers sufficient job opportunities for its citizens. 

Phitidis’ sentiments come as Statistics South Africa (Stats SA) released its quarterly labour survey numbers on Tuesday, confirming over two million jobs were shed in the second quarter. Phitidis, who is the author of  ‘Reset, Rebuild, Reignite: Build Your Business to Thrive in a Crisis’ advises the youth to decide which industry they want to start a business in and try to get their foot in the door, even if it’s on a part-time basis at first. 

He says if, for example, you want to start a business in the transport sector, the best thing to do would be to try and find a job in that sector. If you can’t, and there are no jobs available in your sector of choice, try and obtain some employment in the same field on a part-time basis. “Because the moment you do start to work part-time, you can learn a little about the transport sector, you can show how you apply yourself and understand where the opportunities lie”. From there onwards, you can build relationships with other businesses or service providers in that industry or sector and begin consulting for those businesses, says Phitidis. This also helps to build experience.

While the number of employed South Africans dropped by 2,2 million in the pandemic quarter, the unemployment rate dropped to 23,3% from 30,1%, due to the lower number of people seeking employment during the coronavirus pandemic and the lockdown. 

“In spite of the massive decline in employment, the number of discouraged workseekers, like the number of unemployed, decreased by 447 000, and the number of people who were not economically active for reasons other than discouragement increased by 5,6 million between the two quarters, resulting in a net increase of 5,2 million in the not economically active population,” reveals Stats SA. 

Phitidis’ advice contrasts that given by senior government officials, including the Free State Finance MEC, Gadija Brown, who said in 2019 that youth entrepreneurship was key in turning the country’s economy around because “the government is top heavy, when it comes to the compensation of employees and if the government takes on more people, services will suffer,” the MEC warned at the time.  

In early September, Statistics South Africa (StatsSA) released the country’s latest gross domestic product (GDP) figures, which revealed the country’s economy had contracted by an annualised 51% in the second quarter of 2020 which includes the months of April, May and June, plunging an already weak economy into further recession. This fall marked the fourth consecutive decline in quarterly GDP since last year. Agriculture was the only industry spared in what has been coined the ‘pandemic quarter’. When the lockdown came into effect on 27 March, restaurants, bars, popular takeaway outlets, transport services like airplanes, rail and the tourism industry as a whole came to a grinding halt. It is because of this that household spending fell by almost 50% in the second quarter of 2020. Despite this communication and education spending – data usage in particular increased, with citizens now forced to work from home and continue schooling online.  The controversial bans on alcohol, tobacco, and narcotics resulted in a 92,4% decline during the aforementioned quarter. 

As already mentioned almost all industries, apart from agriculture, experienced a decline in activity.  Stats SA reveals that there was an increase in the export of maize, citrus fruits and pecan nuts, which contributed to the industry rising by 15,1%. Furthermore the public’s peculiar interest in baking during lockdown also contributed to the rise. There was a high demand for eggs, with Farmer’s Weekly reporting that egg sales rose by between 50% and 60% during lockdown. 

OFM News