SA’s unemployment rate climbed to its highest level since the global financial crisis, data from Stats SA showed on Tuesday.  

The rate increased 0.1 percentage point to 29.1% during the third quarter of 2019, statistician-general Risenga Maluleke said. “This is the highest since the first quarter of 2008,” he said.

The expanded unemployment rate, which includes discouraged job seekers, remained at 38.5%. 

Wits School of Economics senior lecturer Lumkile Mondi said the government needed to implement sweeping reforms to reignite the economy, which is projected to grow 0.6% in 2019.

“Reforms, reforms and more reforms,” said Mondi. “We have a crisis of confidence in the SA economy. We don’t think the state is taking the crisis very seriously.”

In September, Rand Merchant Bank and Stellenbosch University’s Bureau for Economic Research’s business confidence index (BCI) dropped to 21 index points in the third quarter from 28 in the previous quarter. This was the lowest level since the 1998-1999 emerging-market debt crisis.

The SA Chamber of Commerce and Industry BCI fell to 89.1 index points in August from 92 in July, its lowest level since April 1985, when the UN Security Council called on members to introduce more far-reaching economic measures against SA during apartheid.

Mondi said finance minister Tito Mboweni’s economic strategy document, which he unveiled in August, needs “complete government support”, adding that reforms are needed in the agriculture and tourism industries because they are labour-intensive sectors that could create more job opportunities.

“I think there’s no political will or commitment to address these issues. We need very decisive leadership to introduce those reforms to unlock value in agriculture and tourism and for the government to sell non-core assets to raise revenue for the Treasury,” he said.

Addressing the media in Pretoria on Tuesday, Maluleke said declines in employment in the third quarter were recorded in the manufacturing sector, which shed 30,000 jobs, followed by construction at 24,000, trade 21,000 and utilities 18,000.

In the first quarter of 2019, the unemployment rate surged to 27.6%, with the economy bleeding 237,000 jobs during the period. This was an increase of 0.5 percentage points from the 27.1% recorded in the fourth quarter of 2018.

In the second quarter, the unemployment rate jumped to an 11-year high of 29%, when the number of unemployed people increased by 455,000 to 6.7-million. This was significantly higher than the 4.3-million unemployed people 10 years ago.

According to Stats SA’s quarterly labour force survey, the working-age population — 15-64 years old — rose by 149,000 to 38.6-million in the third quarter. The number of employed people increased by 62,000 to 16.4-million. The unemployed accounted for 6.7-million and the economically inactive accounted for 15.5-million.

Econometrix chief economist Azar Jammine said the working-age population has increased to 38.6-million in part because of the “democratic bulge caused by the successful rollout of free ARVs [antiretrovirals] over the past 15 years, which has reduced the incidence of child mortality”.

He described the 29.1% unemployment rate as a crisis, saying the economy is growing faster than the rate at which formal sector jobs are being created. The economy is growing at between 0.5% and 1%, yet formal sector employment has fallen by 0.4% over the past year, he said.

SA Institute of Race Relations chief economist Ian Cruickshanks said business confidence is needed to address the unemployment crisis.

“If we could get that, we could grow the economy at a faster rate. We could have job opportunities created. The government is hostile to the private sector,” he said.

“The government must treat the private sector as a friendly partner rather than an enemy. That may sound like a hostile statement, but to me that sounds like common sense.

“We’ve got to do something to reinvent confidence and the private sector’s willingness to deploy capital in new endeavours to grow the economy.”


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