The Impact Of The Mahatma Gandhi National Rural Employment Guarantee Act On Indian Unemployment And Lessons For South African CSI

Each year, hundreds of thousands of South African students complete their matriculation, entering a world full of possibilities yet marred by significant challenges. In 2023, approximately 897,775 candidates registered for the National Senior Certificate (NSC) exams, with about 691,690 eventually sitting for these pivotal assessments. The nation celebrated a record-breaking pass rate of 82.9%, marking a historic achievement for the education system. However, amidst these successes, a pressing question remains: how can we ensure these young graduates transition smoothly from academic achievements to meaningful, sustainable employment?

The stark reality is that South Africa’s 26 public universities, which collectively enrol around 1.1 million students, can only accommodate a fraction of these matriculants. With annual first-year intakes ranging from 180,000 to 220,000 students, we must bear in mind that out of the 180,000 to 200,000, we are also dealing with first-year university repeats or those who failed and choose to redo their first year, thus the demand far exceeds the available capacity. This gap is particularly pronounced in high-demand fields such as medicine, engineering, and law, where infrastructure, funding, and government policies further limit opportunities.

The constraints on higher education accessibility are just one aspect of a broader and more complex issue—integrating new entrants into the workforce. The South African labour market, shaped by economic conditions and sector-specific demands, absorbs between 500,000 and 800,000 new employees annually. Yet youth unemployment continues to plague the nation, with many young people struggling to find formal employment, despite initiatives like learnerships, internships, and the Expanded Public Works Programme (EPWP).

Addressing these challenges requires a shift in strategy—from merely focusing on job creation to fostering livelihood creation. Unlike traditional job creation, which depends on formal employment opportunities provided by businesses or the government, livelihood creation empowers individuals to sustain themselves through diverse income-generating activities. This approach is especially pertinent in South Africa, where formal job opportunities are limited, and the informal economy plays a crucial role in absorbing new entrants.

Professor Steven Friedman of the University of Johannesburg has long advocated for rethinking how we address economic challenges in South Africa. According to him, “The focus on formal job creation is often too narrow to address the systemic issues of unemployment, poverty, and inequality. Livelihood creation, by contrast, offers a more inclusive and adaptive approach that can better serve the needs of a diverse population.” He further emphasises that by fostering environments where individuals can create their own economic opportunities, we empower communities to build resilience and self-sufficiency, essential for sustainable development.

Livelihood creation offers a pathway to a more inclusive and resilient economy. By encouraging entrepreneurship, self-employment, and participation in the informal sector, individuals can find innovative ways to address local needs, leading to the development of small and medium-sized enterprises (SMEs). These enterprises not only create jobs for others but also stimulate local markets and contribute to overall economic growth.

Moreover, livelihood creation reduces the strain on the formal job market, providing alternative avenues for economic participation. This is especially critical during economic downturns when formal employment opportunities may be scarce. Individuals engaged in livelihood activities are often better equipped to weather economic shocks, contributing to a more stable and diversified economy.

South Africa can draw inspiration from international examples where livelihood-focused strategies have significantly reduced unemployment and poverty. In India, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides rural households with guaranteed employment opportunities while simultaneously fostering local infrastructure development.

The MGNREGA, enacted in India in 2005, is a pivotal piece of legislation aimed at enhancing livelihood security in rural areas. It provides a legal guarantee of at least 100 days of wage employment per financial year to adult members of rural households who volunteer for unskilled manual work. The programme, which is the largest of its kind globally, focuses on water conservation, land development, drought-proofing, and other labour-intensive tasks that improve rural infrastructure. MGNREGA mandates transparency and accountability through social audits and technological monitoring to minimise corruption. Initially implemented in 200 districts, the scheme now covers all districts of India. MGNREGA has been instrumental in reducing rural poverty, empowering women, and creating sustainable assets, though challenges such as delays in wage payments, corruption, and funding shortages persist. Despite these issues, MGNREGA remains a critical component of rural development and poverty alleviation efforts in India.

Similarly, Bangladesh’s Grameen Bank has revolutionised microcredit, empowering millions, particularly women, to establish their own businesses and improve their socio-economic status.

Adopting similar livelihood-centric approaches could catalyse South Africa’s journey towards reducing unemployment, poverty, and inequality—the three plagues that continue to hinder the nation’s progress. By empowering individuals to create their own economic opportunities, we can cultivate a more resilient and inclusive economy capable of withstanding global economic fluctuations and ensuring a brighter future for all South Africans.