Official data shock: Of 36m working-age South Africans, only 16m have jobs

By Nqobile Dludla

PRETORIA, Feb 25 (Reuters) – South Africa’s unemployment fell slightly in late 2015 but is set to remain stubbornly high as major sectors shed jobs, the government cuts spending and economic growth stalls.

Men hold placards offering temporal employment services in Glenvista, south of Johannesburg, October 7, 2010. REUTERS/Siphiwe Sibeko
Men hold placards offering temporal employment services in Glenvista, south of Johannesburg. REUTERS/Siphiwe Sibeko

More than 5.2 million South Africans, or 24.5 percent of the working population, were without jobs in the final quarter of last year, a slight improvement on 25.5 percent in the previous quarter, statistics agency Stats SA said on Thursday.

Figures by Stats SA also showed that of a working-age population of 36.3 million, only 16 million had jobs.

Analysts say the since the end of apartheid in 1994 the government has relied on creating jobs through civil service employment. It recently hinged a plan to create 1 million job “opportunities” to large, state-led infrastructure programmes.

But falling revenues and warnings from rating agencies to slash spending or face credit downgrades┬áhave stalled these plans, with the state’s target of achieving a 6 percent unemployment rate by 2030 looking increasingly unlikely.

Manufacturing, which accounts for 13 percent of GDP, cut 11,000 jobs compared to last year, while the transport sector shed 52,000 jobs in the same period.

“Labour force participation hasn’t really made any inroads,” said senior industry analyst at FNB Jason Muscat, referring to the measure of the active portion of an economy’s labour force.

“Transport is a bellwether for the health of an economy and a contraction of 5.4 percent is really not a good sign.”

The economy is also showing signs of strain, with consumer inflation at 6.2 percent and producer prices (PPI) at 7.6 percent.

“The PPI number is a reminder; driving the message home that South Africa is facing significantly higher costs, which is growth negative,” economist at ETM Analytics Jana an der Venter said.

“Government does not have the capacity to create jobs out of thin air,” she said, adding that, a meaningful dent in the jobless rate was doubtful.

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