🔒 Financial Times perspective: How world sees SA’s record unemployment

More than a third of South Africa’s workforce was jobless in the second quarter of 2021, according to data published on Tuesday which illustrated the struggles of Africa’s most industrialised economy to shake off the impact of the pandemic.

Official unemployment rose to 34.4 per cent in the three months to the end of June, the highest level since the jobless survey began and up from 32.6 per cent in the first quarter — about 7.8m people in all.

The statistics set out the scale of the economic crisis facing President Cyril Ramaphosa and his African National Congress as they try to reopen the economy despite a slow pace of Covid-19 vaccinations, structural weaknesses such as poor access to education, and the consequences of infighting in his own party.

Business groups estimated that tens of thousands of jobs were put at risk last month in the country’s worst post-apartheid unrest. A power struggle in the ANC over the jailing of former president Jacob Zuma led to arson and attacks on infrastructure in Gauteng and KwaZulu-Natal, regions that drive half of South Africa’s gross domestic product. Hundreds died in the unrest.

Economists warned that joblessness would worsen in the third quarter because of fallout from the disorder and recent lockdown measures to control coronavirus.
Thabi Leoka, an independent economist, called the situation “a crisis”.

“An economy cannot grow when most of the working-age population is not productive,” she said. “Small businesses and the informal sector are struggling under lockdown restrictions.”

The government recently relaxed some lockdown measures, including allowing gatherings again last month. Hospitalisations appear to have peaked nationally in the third wave, but South African scientists have warned that a fourth wave could emerge by the end of the year.

Just over one in 10 adult South Africans have been fully vaccinated; the government aims to vaccinate all 40m adults in the country by the end of the year. The government last week opened vaccinations to all over-18s.

Black women had the highest official unemployment rate of about 41 per cent, while more than half of unemployed jobseekers have less than a high-school leaving qualification.

South Africa’s old apartheid boundaries, such as the placement of black townships far from urban economic hubs, add to the difficulty of finding stable work for many people.

Taking into account an additional 4.1m people who have become discouraged or given up looking for work but are not officially counted as unemployed, 44.4 per cent of the country are jobless — up from 43.2 per cent in the first three months of this year.

Ramaphosa’s government last month reinstated a temporary grant to the jobless of R350 ($23) a month. But because of the scale of the country’s structural unemployment, his cabinet is looking at plans for a permanent basic income transfer, despite the strain this would place on the public finances.

Enoch Godongwana, South Africa’s finance minister who recently replaced the veteran Tito Mboweni, has signalled the need for such a cash transfer but said this month that jobless youth “need more than just a grant and social support” to find work.

High youth joblessness in particular was a “ticking time bomb”, Leoka said.

“In 10 years’ time, this age should be in leadership positions, running companies, government departments and leading universities, but they lack the necessary foundation,” she said. “Their fate paints a bleak picture of the future of South Africa.”