With one of the highest youth unemployment rates in the world, South Africa’s planning for a just transition needs to take into account the vulnerabilities of its youth cohorts, especially those that can be qualified as “not in education, employment or training” (NEET). For example, a recent study conducted in the framework of the EU-AFD Research Facility on Inequalities revealed that the Mpumalanga province, the region with the highest exposure to the coal exit, has had a NEET youth rate of over 37% for the past decade, with almost three-quarters of them living in income-poor households.

Since 2019, the National Business Initiative (NBI) has been spearheading a multi-faceted and multi-sector partnership, which focuses on expanding and growing pathways for young people to access Installation, Repair and Maintenance (IRM) occupations. The IRM initiative is strategically aligned to various initiatives of the government to drive inclusive recovery and revitalisation of the economy, particularly in the aftermath of the Covid-19 pandemic. It has subsequently been incorporated as part of the Presidential Youth Employment Intervention (PYEI). The Initiative works on the premise that, by supporting township-based IRM entrepreneurs to strengthen and grow their businesses, and by linking them to localised market opportunities, there will be a concomitant increase in the demand for skilled labour, which could lead to the creation of employment opportunities. Therefore, it is a direct response to the youth unemployment challenge.

Collaborating closely with the NBI, the Centre of Researching Education and Labor (REAL Centre) contributed its expertise to the comprehensive analysis of the four key regions identified in Phase 1 of the IRM skills ecosystem mapping project: Atlantis (Western Cape), Mandeni (KwaZulu-Natal), Mamelodi (Gauteng), and Kathorus (Gauteng). Building upon the success of this initial phase, the REAL Centre will now expand the project's scope to the Nkangala district municipality, which is one of the three districts of Mpumalanga province.

This work is also part of AFD's dialogue with the South African authorities on the just transition and the reduction of inequalities.
 

Find out more about the Extension in South Africa
 

This research project will conduct a detailed analysis of the skills ecosystem that could feed into the various initiatives to support local authorities and communities in the Nkangala district, which concentrates the coal-fired power plants that will be closed as a result of just transition policies.

Phase 1 of the project revealed that an IRM skills ecosystem mapping project is crucial for addressing inequality by thoroughly analysing the socioeconomic and demographic profiles of diverse townships in South Africa. 

By identifying specific skill gaps and understanding the challenges faced by Small, Medium, and Micro Enterprises (SMMEs) in these areas, the study can inform targeted interventions aimed at reducing inequality in access to employment and economic opportunities. 

Furthermore, by examining the role of Technical and Vocational Education and Training (TVET) institutions and conducting a comprehensive literature review, the study ensures that proposed interventions are evidence-based and tailored to the needs of the communities studied. 

Ultimately, the study's approach of generating actionable insights in collaboration with stakeholders aims to drive meaningful impact and promote inclusive economic development in underserved regions, contributing to efforts to reduce inequality, to advance the principles of just transition and to foster a more inclusive society.

Building on Phase 1 of the IRM skills ecosystem mapping, researchers will apply the following method:

1. They will set the context for the Nkangala district through desktop research and a few selected key informant interviews;
2. They will collect primary data and set up fieldwork through stakeholder mapping workshops and key informant interviews to collect data;
3. They will then provide an initial narrative on the overarching local skills ecosystem from the site mapping exercise and will draw on the document review and contextual work on the Nkangala district. Drawing on Spours’ (2019) work on ecosystems, they will use three core elements: the dimensions of verticalities, horizontalities and mediation to understand and analyse the skills ecosystem Nkangala district and to guide the cross-site analysis, building on the work undertaken during Phase 1.
    

You will find below the different research papers related to this project:

• Skills ecosystem mapping of MSMEs located within the Nkangala District Municipality

Present in Armenia since 2013, the AFD group finances projects that contribute to the fight against climate change and work for just and inclusive transitions. We support the sustainable management and preservation of natural resources, energy transition, public finance management and urban services.

Produced by AFD's team of country-risk economists, macroeconomic country assessments provide an analysis of development processes in countries in which AFD operates. They also characterize their growth trajectory, and detect economic, social, political and financial vulnerabilities associated with these trajectories. AFD Group is thus in a position to properly measure the challenges and monitor the risks associated with each of its investments.

Emphasis is placed on developing countries, particularly in Africa, for which macroeconomic analyses are rare or infrequent. AFD seeks to complement existing production on the global economic situation, more focused on advanced economies and major emerging countries.

Find out more: Macroeconomic Analyses at AFD

Country-risk analysis is based on a close follow-up over a long period of time and rooted in a fine knowledge of local contexts. Cyclical trends, often highlighted in the news, are always examined in the light of structural trends and of the regional context in which they take place. The aim is to highlight country-specific macroeconomic issues while assessing risks against comparable time- and space-based trajectories.

Country-risk economists place the study of socio-political vulnerabilities, the growth model, the viability of public debt, external balances and the soundness of the financial system at the heart of their assessment, and give specific attention to countries' exposure to climate risks.

This small land-locked economy of 2.8 million inhabitants has derived positive economic benefit from the inflows of Russian migrants and capital since the outbreak of the war in Ukraine. Economic growth was robust in 2022 (12.6%) and 2023 (8.7%), the external accounts were strengthened, and public finances were consolidated. However, the country’s historically volatile economic performance remain exposed to the growing (geo)political risks in the region. The government of Nikol Pashinyan is responding to the pressure through precaution, and is seeking to secure Western support in the conflict with Azerbaijan. However, on the domestic front, it faces sharp criticism over the concessions it would grant to its neighbor in the context of the border demarcation following Baku’s military takeover of Nagorno-Karabakh in September 2023. Given the country’s vulnerability to a turnaround in financial inflows, the IMF urges caution and recommends building up additional fiscal and external buffers. This will especially be necessary because Armenia must internally manage the arrival and economic and social integration of the 100,000 refugees from Nagorno-Karabakh.

Download our publications on the macroeconomic situation of Armenia:

• “Armenia: Economic momentum faced with geopolitical tensions”, in MacroDev Semestrial Panorama #57 (July 2024)

A major player on the regional scene, Türkiye has experienced rapid development and transformations in recent decades, creating new opportunities, but also major imbalances. Its challenge today: to combine macro-financial stability and sustainable growth with fair and sustainable development. AFD Group and its local partners in Turkey are working for more balanced and sustainable growth, as well as a transition to a lower carbon economy.

Produced by AFD's team of risk-country economists, country assessments provide an analysis of development processes in countries in which AFD operates. They also characterize their growth trajectory, and detect economic, social, political and financial vulnerabilities associated with these trajectories. AFD Group is thus in a position to properly measure the challenges and monitor the risks associated with each of its investments.

The third decade of the Erdoğan-AKP era, which is beginning at the same time as the second centenary of Türkiye, needs to place the economy, prosperity and national cohesion at the heart of priorities. The return to a credible and effective monetary policy, led by an independent Central Bank and taken up by a relatively sound banking sector per se, should be followed by fiscal consolidation from 2025 onwards, after the slippage in 2023-2024, partly due to exceptional expenditures for post-earthquake reconstruction. Reforms are also expected to improve the business environment, support non-price competitiveness, productivity, attractiveness to investors, the external position, economic growth potential, and the green transition.