53% have no jobs in EC, highest rate in SA

Outside the metros one in five employed — and it's likely to get worse

The Eastern Cape economy has been decimated by Covid-19 and with 52.8% of its people now officially unemployed, the province is the worst-hit area in SA.

Stats SA, which announced the findings of its latest Quarterly Labour Force Survey on Tuesday, found that for every person in the province with a job, another is unemployed.

This sparked calls from organised black business in the province for an immediate national government intervention.

Economist Mike Schussler described the findings as a “tragedy”.

“People’s lives are at stake. People are going to starve,” he said.

The Border-Kei Chamber of Commerce urged the government to unlock the economy and to deal decisively with corruption.

DA legislature leader Bobby Stevenson said the figures revealed “the true devastation of the lockdown”.

“It exposes the sheer horror of the economic devastation sweeping across the Eastern Cape,” he said.

The province’s unemployment rate is a shocking 10.4 percentage points higher than the national unemployment rate of 42.4%.

The expanded unemployment rate — a term used to include people who had given up the search for a job — has now been altered by Stats SA to include the effect of the lockdown.

Two black business leaders in the province demanded money and programmes for the province, with Eastern Cape Chamber of Business president Vuyisile Ntlabati criticising the state for foisting on the province policies and programmes which were “good for Johannesburg, but not good for us”.

He accused the national government of failing to implement its business relief programmes in the province, saying there had been a huge collapse of small businesses which could not access a bureaucratic system that made unreasonable demands, such as business statements being signed off by accountants.

“The government has nice words but we need something drastic. We need a serious youth programme to provide jobs. We need the government to talk to us. The depression among the youth is enormous,” Ntlabati said.

“An articulate young woman washing my car in Mthatha told me she had two degrees and could not find better work. She started crying. Mainstream industry, organised business has failed to employ young people. There are so many young people who have started their own businesses but have had no mentoring or support.”

Black Business Forum (BBF) president Luthando Bara said the province was in a dire state and needed urgent economic intervention.

He said: “The implementation of reformative interventions is essential to generate a faster growing, more labourintensive economy in infrastructure, tourism and agriculture.

“The BBF is extremely worried by the latest unemployment rates, especially the fact that the Eastern Cape has recorded the highest official and expanded unemployment rates. It speaks to our inability to create jobs in a very lowgrowth environment, underpinned by structural inefficiencies and the Covid-induced uncertainty that is driving the province’s mounting unemployment crisis.

“The pandemic has worsened the dire domestic unemployment predicament significantly as business closures and cutbacks accelerate daily.”

Border-Kei Chamber of Business executive director Les Holbrook called the figures disappointing, adding that even under level 1 of the lockdown many businesses still could not operate.

He said all economies and all governments had been affected by the virus and it could not only be the government which took the blame.

He said the SA economy was already in recession in February when the pandemic struck.

“Given the number of closures and retrenchments, the numbers are likely to climb even more.

“We need to understand our issues. They cannot only be caused by government. Unfortunately, we are going to have to learn to live with this.”

He said government relief packages had helped.

The picture might improve “given the lag in levels of shutdown”.

“The thing the government should do is unlock the economy by fixing the fundamentals

— improving the cost and ease of doing business, and reducing red tape. Also, deal decisively with fraud and corruption.”

Stevenson called on the provincial government to redirect a billion rand spent on noncore items such as hotels and travel, and to spend it on supporting small business and getting young people into the job market with internships.

Schussler pointed out that in areas outside the two metros, only one in five people (22%) had jobs.

“Poverty and inequality are created by unemployment. People without income starve. We really, really need jobs,” he said.

An articulate young woman washing my car in Mthatha told me she had two degrees and could not find better work. She started crying. Mainstream industry, organised business has failed to employ young people

The thing the government should do is unlock the economy by fixing the fundamentals — improving the cost and ease of doing business, and reducing red tape. Also, deal decisively with fraud and corruption