South Africa’s unemployment rate hits record high

Africa’s biggest economy was already in recession prior to coronavirus but lockdowns have further squeezed businesses.

South Africa unemployment
Radzuma Tshimangadzo stands holding a placard with his qualifications as he seeks a job at an intersection in Rosebank, South Africa, where already rampant unemployment has been exacerbated by the coronavirus pandemic [Siphiwe Sibeko/Reuters]

South Africa’s unemployment rate hit a record high in the first quarter of this year as key sectors including agriculture shed jobs, data showed on Tuesday, highlighting weakness in the economy even before it was battered by the COVID-19 pandemic.

Africa’s most advanced economy was already in recession before the pandemic hit. Authorities imposed a strict lockdown at the end of March, further squeezing businesses and consumers.

The unemploymentrate of 30.1 percent was up from 29.1 percent in the final quarter of last year, Statistics South Africa said in its quarterly labour force survey.

“This is the first (time) ever that we have hit the 30 percent mark,” Statistician-General Risenga Maluleke said.

There were 7.1 million people without jobs in the first quarter, up from 6.7 million in the previous quarter, Statistics South Africa said.

Under the expanded definition of unemployment, which includes people who have stopped looking for work, the rate was 39.7 percent compared with 38.7 percent in the previous quarter.

South Africa
Commuters line up on Monday as they wait for the bus during a protest by taxi operators over the government’s financial relief for the taxi industry, in Soweto, South Africa [File: Siphiwe Sibeko/Reuters]

The outlook for the labour market remains gloomy, with some of the country’s big firms such as steel producer ArcelorMittal South Africa Ltd, food producer Tiger Brands and third-biggest telecommunications operator Cell C already announcing plans to cut jobs.

Severe effect

With no significant government support offered during the lockdown to the informal, or unregulated, sector — which according to the World Bank provides employment to 25-30 percent of South African workers – the effect has been severe for many.

President Cyril Ramaphosa last week announced a further easing of lockdown restrictions, allowing businesses such as cinemas, casinos, theatres, hair salons and spas to open under strict social distancing rules.

But some small businesses fear recovery will take longer.

“Looking at the fact that we’ve cut down on staff coming in and looking at shifts, I think … our revenue is also going to be cut by half in the long run,” Candi & Co salon owner Cola Mthembu said on Tuesday as she opened her salon for the first time since late March.

“We’re just being hopeful that we still keep our doors opened.”

Source: Reuters