20 000 new jobs needed each day
The situation makes it ripe for the country to plunge into social unrest
South Africa faces a tall order to absorb millions of unemployed people, with experts saying the economy needs to create over 20 000 jobs a day for a year to eradicate jobless, which has hit crisis point.
South Africa’s youth is burdened by high unemployment levels, with those aged 15 to 34 years making up 66.5% in the third quarter of 2021.
At 34.9%, South Africa has the highest official unemployment rate in the world.
The expanded definition of unemployment that includes discouraged job seekers and others who are not economically active sits at a record-breaking staggering 46.6%, or 11-million people.
Catherine Wijnberg and Anton Ressel, from small businesses consultancy firm Fetola, said the country needed a radically different strategy, a new level of bravery and a nation-first mindset to curb surging unemployment rates.
“The truth is, to absorb the almost 8-million unemployed job seekers who make up the 34.9%, we would need to create 22 000 jobs per day for a year. That is the equivalent of starting and launching four businesses the size of Vodacom, every day. For a whole year. Clearly, we are not even scratching the surface by doing what we have been doing for the last 25 years,” they said.
The staggering youth unemployment has sent shivers in the investment community, with analysts warning that the situation makes it ripe for social unrest.
Expanded unemployment sits at 46.6%, which represents 11-million people
Casey Delport, on investment analyst at Anchor Capital, said of most concern was that youth unemployment now sat at nearly 70%, which was indicative of the social unrest the country experienced in July and pointed to longer-term structural issues in the local economy.
“Overall, we expect rising joblessness to increase pressure on the government to extend current relief measures that will further complicate efforts to stabilise public finances,” she said.
The Statssa jobless rate data show that a combined 50% of the 660 000 job losses were from Kwazulu-natal and Gauteng, the two provinces that were primarily affected by the social unrest.