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Just before the end of the first quarter this year, South Africa went into one of the strictest lockdowns in the world. Health minister Zweli Mkhize warned in September that many people had been pushed into ‘extreme poverty’ as businesses shut their doors and people lost their jobs. ‘For the first time in the history of our democracy, we turned to the International Monetary Fund for relief. We, along with 80 countries globally and 35 countries on the African continent, have applied for and received Covid-19 related emergency funding from the IMF,’ he said at the time. Barely two moths later the government is struggling to stay on track with grant payments. It is alleged that the Unemployment Insurance Fund paid out R161m in irregular payments. Various entities are pleading with government not to enforce another hard lockdown as the daily number of new Covid-19 cases surges in the Eastern Cape and Western Cape provinces. – Melani Nathan
South Africa’s unemployment rate swings back to 17-year high
By Prinesha Naidoo and Monique Vanek
(Bloomberg)– South Africa’s official unemployment rate returned to a 17-year high in the third quarter as the easing of a coronavirus lockdown allowed more people to look for work and be counted as jobless. The jobless rate rose to 30.8% from 23.3% in the three months through September, Statistics South Africa said Thursday in a report released in the capital, Pretoria.
The median estimate of seven economists in a Bloomberg survey was 31%. Unemployment according to the expanded definition, which includes people who were available for work but not looking for a job, rose to 43.1% from 42% the previous quarter.
- The unemployment rate in Africa’s most-industrialized economy has remained above 20% for at least two decades, largely due to structural barriers, including the education system that doesn’t provide adequate skills. Restrictions to curb the pandemic’s spread put the economy into its longest recession in 28 years, with the lockdown forcing some businesses to cut wages, reduce staff or shut permanently.
- The number of people employed rose by 543,000 to 14.691 million. The number of unemployed rose to 6.533 million people.
- Jobs were at the center of a post-virus reconstruction and recovery plan presented by President Cyril Ramaphosa last month, with the government committing 100 billion rand ($6.37 billion) to create public and social employment opportunities, of which 800,000 are expected in the months ahead. The National Development Plan, the government’s 2012 economic blueprint that Ramaphosa co-authored, targeted an unemployment rate of 14% by 2020 and 6% a decade later.
- The rising unemployment rate may pose a threat to social stability, and it could complicate efforts to stabilize South Africa’s rapidly deteriorating public finances. The three-month extension of a special Covid-19 relief grant for unemployed people means the National Treasury will have to pay out about 6 billion rand, according to Finance Minister Tito Mboweni. It plans to cut spending projections by about 300 billion rand over the next three fiscal years to reach a primary budget surplus in fiscal year 2026, when debt is expected to peak at 95.3% of gross domestic product.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.