Cape Town - As the unemployment rate continues to climb, economists and academics warn that the continued stringent power cuts and foreign relation concerns pose serious threats to South Africa’s already strained economy.
Statistics SA unpacked the Quarterly Labour Force Survey (QLFS) for the first quarter of 2023 on Tuesday, where it emerged that South African youth aged 15 to 34 remain the most vulnerable in the labour market with unemployment increasing by 241 000 to 4.9 million people who are jobless.
The official unemployment rate in the country increased to 32.9% – this was up from 39.7% in the fourth quarter of 2022.
Also in the first quarter, the number of employed persons increased by 258 000 compared to 16.2 million in the fourth quarter of 2022.
“The number of unemployed persons declined by 179 000 to 7.9 million during the same quarter. The changes in employment and unemployment resulted in the official unemployment rate increasing,” said statistician-general Risenga Maluleke.
The stats were released amid concerns that US investment to South Africa might be withdrawn or the country sanctioned after controversy erupted following US ambassador to South Africa Reuben Brigety’s claims during a media briefing that the country had supplied arms to Russia.
Wits Business School’s Professor Jannie Rossouw said the problem was that economic growth was generally lower than population growth, implying that unemployment persists in South Africa.
“It is therefore obvious that the ANC government’s current socialist policies are unsuccessful. We need a new focus on market-driven policies to eradicate unemployment. If the US government introduces sanctions on South Africa and withdraws the preferential treatment Agoa, South African exporters will suffer, with a concomitant decline in employment,” said Rossouw.
Trade union Cosatu’s national spokesperson Sizwe Pamla said the federation was “deeply” worried that what they hoped was momentum in reducing unemployment over the course of 2022 may be lost with the current rampant levels of load shedding suffocating the economy even further in 2023.
“The government’s failure to fix load shedding and drive economic recovery is reprehensible because, behind these numbers, there are struggling families and starving people.
“So far, there is no clear strategy presented by the government to help stimulate growth and regenerate our economy,” said Pamla.
“The same failing macroeconomic policy framework remains intact despite the rhetoric about the centrality of job creation and the transformation of the economy by the government.
“It is more critical for the government to move with speed to fix the obstacles hindering economic growth to ramp up Eskom’s maintenance programme and efforts to bring on board new generation capacity,” said Pamla.
He said the current geopolitical tensions over the Russia-Ukraine War had further muddied the waters and if South Africa’s foreign relations were mismanaged the situation would worsen.
According to Professor Andre Roux at the Stellenbosch University Business School, the figures were not unexpected as the country had been experiencing prolonged high unemployment.
“The bulk of this problem is being experienced by the younger people. Unemployment remains high for a number of reasons which are well known, including slow and sluggish economic growth.
“This has been exacerbated by ... load shedding in more recent times. Companies big or small have to contend with four to six hours of power cuts per day meaning they cannot operate at full capacity.
“Another challenge is inadequate or inappropriate skill sets for job seekers,” said Roux.
Anchor Capital investment analyst Casey Delport said the unemployment rate had remained stubbornly high for many years, with a complex range of factors contributing to the issue.
“A combination of structural deficiencies, such as a lack of skills, limited access to quality education and training, and inadequate job creation, has resulted in a large portion of the population being unable to find employment.
“Despite the slight increase in employed persons, the official unemployment rate has risen.”
Cape Times