NYDA calls for youth-first economic plan as risks mount

2026-03-28 - 14:00

The National Youth Development Agency (NYDA) has called for a youth-centred economic response following the latest decision by the South African Reserve Bank to keep the repo rate unchanged at 6.75%. The NYDA on Friday said the Monetary Policy Committee’s (MPC) decision comes “against a backdrop of heightened global uncertainty and emerging economic risks”. It warned that young people remain particularly vulnerable. Global shocks raise pressure The agency pointed to growing instability abroad, including conflict in the Middle East, as a key driver of economic strain. “The recent outbreak of conflict in the Middle East has caused a significant global supply shock, leading to higher prices for oil, gas, and fertilisers while dampening global growth prospects,” the NYDA said. These developments are expected to push inflation higher in the short term while limiting economic activity, adding further pressure on already strained households. While South Africa recorded modest economic growth of 1.1% in 2025, the NYDA warned that this remains insufficient to address deep-rooted structural issues. “The current growth trajectory is not sufficiently inclusive and continues to exclude large segments of young people from meaningful economic participation,” the agency said. It stressed that youth unemployment remains a critical concern, with limited job opportunities exacerbating socio-economic vulnerabilities. Inflation risks hit young people hardest Although inflation is currently contained at around 3%, the NYDA cautioned that rising energy costs are likely to drive a temporary increase, particularly in fuel prices. “Fuel inflation [is] projected to increase sharply in the coming months,” the statement noted. The agency warned that higher transport and food costs will disproportionately affect young people, especially those in low-income households. Monetary policy ‘not enough’ While the decision to hold interest rates steady reflects a cautious stance, the NYDA argued that monetary policy alone cannot resolve South Africa’s economic challenges. “The combination of weak economic growth, rising costs, and limited employment prospects risks further deepening the socio-economic vulnerabilities of young people,” it said. The agency emphasised that supply-side shocks driven by global events require broader interventions beyond interest rate adjustments. Call for coordinated action The NYDA urged the government to adopt a more coordinated and growth-oriented policy approach, centred on youth development. It called for “accelerated public investment, particularly in infrastructure and sectors with strong employment potential”, alongside targeted support for youth-owned businesses to cushion rising costs. The agency also highlighted the need to strengthen programmes that provide work experience, skills development, and pathways into the labour market, while improving alignment between macroeconomic policy and youth development goals. ‘Youth must be at the centre’ The NYDA stressed that South Africa’s youth unemployment crisis is structural and requires deliberate, long-term interventions. “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,” it said. The agency reaffirmed its commitment to advancing “evidence-based policy solutions that place youth at the centre of South Africa’s economic response and long-term development trajectory”.