South Africa’s unemployment rate hit a new high in the second quarter. This week Statistics SA released its quarterly labour force survey and found that unemployment increased to 34.4%, jumping from 32.6% in the first three months of the year. Covid-19 was the main reason for job losses. But that’s not the worst part. The recent numbers do not reflect July’s unrest, which cost the economy nearly R35 billion and resulted in thousands of jobs being lost. Brace yourself: unemployment will deepen in the next quarter. 😔
South Africa isn’t the exception when it comes to high Covid-related job losses.
The global unemployment rate rose by 1.1 percentage points to 6.5% in 2020, according to the International Labour Organisation’s recent report on the issue.
Nigeria recorded a 6 percentage point jump in unemployment in December 2020 to 33.3%, while Botswana’s unemployment rate increased by 5 percentage points to 23.3% in December 2020.
So, where does this leave us? We previously explained how countries like Greece and Spain, who were in a similar boat to South Africa, were able to steady the ship. They brought state spending under control, restructured state-owned enterprises, slashed their public wage bill, and reformed labour policies to boost hiring and grow their economies.
Thankfully, new finance minister Enoch Godongwana seems to have impressed the markets during his introductory address to investors last week. He said that the solution to SA’s fiscal challenges is faster growth, Business Day reported. We hope to see more economic green shoots and, if you’re keen on getting the economy and jobs back up, start a side hustle and employ more people, support small businesses and spend money at your local stores