‘By P. Sarojini’
JOHANNESBURG, South Africa (CWBN)_ Unemployment has remained one of the greatest challenges to South Africa in the past years. Now, due to the COVID-19 pandemic, the unemployment rate seemed to have raised higher. It is necessary to lower the unemployment rate in order to attract investment and recover the country’s economy.
The official statistical data of unemployment in South Africa for the third quarter of 2020 shows that the unemployment rate has raised to 30% again. The statsSA declared on Thursday that the country’s unemployment rate rose 7.5 percentage points and reached 30.8%, which is a high record. This was mainly due to the lockdown conditions that prevailed during the pandemic outbreak.
The Statistics South Africa said, “The results for the third quarter of 2020 indicate large movements out of the ‘other not economically active’ category to ‘employed’ and ‘unemployed’ between Q2 and Q3 2020. The number of employed persons increased by 543,000 to 14.7 million compared to the second quarter of 2020″. Then added “Unemployment increased substantially by 2.2 million to 6.5 million compared to Q2 of 2020 resulting in an increase of 2.8 million (up by 15,1%) in the number of people in the labor force. The number of discouraged work seekers increased by 225,000 and the number of people who were not economically active for reasons other than discouragement decreased by 2.9 million between the two quarters, resulting in a net decrease of 2.6 million in the not economically active population.”
Nazmeera Moola, head of SA Investments at Ninety One said “What the rise in the unemployment rate from 23.3% to 30.8% hides is that there was a net 543,000 jobs created in the third quarter”. This development was a result of the country’s economic recovery since the Q2 lockdown meltdown. Moola added “Despite this improvement, after 2.2 million job losses in Q2, this means there have still been a net 1.65 million jobs lost to Covid by the end of September. Going forward, it will be key to see how this recovery in jobs continues”.
Ian Fleming, a business rescue and turnaround specialist and CEO of Engaged Business Turnaround said that the worst is yet to come. He said “Judging by the enquiries we are seeing and the business leaders coming to us, the worst is yet to come as more companies will hit the wall in Q1 next year and will contribute to further push up unemployment numbers as businesses fail”.
Some of the structural challenges are the population and shortage of skills, where the growth of population outpaces the economic growth. Apart from these, labor-intensive sectors such as mining have seen long-term decline. A general decline in the public services resulted in the decline in the private sector in creating job.
The accountancy and consultancy firm PwC said that the government should deal with the unemployment problem with a new approach. It said, “unemployment challenges cannot be addressed in the traditional way and an entirely new approach by government is needed to resolve this issue”.
Meanwhile, the rise in unemployment means that poverty and inequality are on the rise. It was said that the government will host an investment conference next week which is crucial for job creation. The government announced the new business plans to attract investment and to create jobs and also seeks support from the private sector to overcome the current unemployment crisis.
Edited by Elishya Perera
