Analysis: South Africa's High Unemployment Rate, Where Is It Heading?

• The latest statistics have revealed that South Africa now has the highest unemployment rate in the world
• Experts believe that South Africa may see more violent protests should the unemployment rate continue to increase
• Government policies need to make it easier for South Africans and foreign companies to start up businesses and create jobs, says an expert

JOHANNESBURG - South Africa's unemployment rate keeps gradually increasing and it is not showing signs of falling which has been reflected in the latest figures from the Statistic South Africa's survey.

The new unemployment rate has put South Africa at the top of the global list of 82 countries with the highest unemployment rate, according to Aljazeera. Over seven million South Africans currently do not have jobs with black women being the most affected at 41%.

Read also

FNB promises R3 million to vaccinated account holders through a random draw

Although South Africa has one of the largest economies on the African continent, it remains at the top with the highest unemployment rate for young people. According to Finance Yahoo, the employment rate of young people aged between 15 and 24 is currently at 64.4% and people aged 25 and 34 at 42.9%.

High unemployment could lead to more unrest

The social unrest that was seen in KwaZulu-Natal and Gauteng is believed to have been exacerbated by the amount of South Africans without jobless, especially young people.

The unrest not only highlighted the severity of joblessness but it meant that businesses were destroyed and many more people could be added to the unemployment rate.

Head of operational risk research at Fitch Solutions, Chiedza Madzima says the country may see more cases of social unrest if the employment issue in South Africa is not tackled.

Read also

Cyril Ramaphosa emphasises the hardships faced by women amid the unemployment crisis

Madzima went on to say that low prospects for income for young people, poverty and joblessness will mean increased demands for social relief grants.

Entrepreneurship could help solve the unemployment issue in South Africa

Professor Johan Fourie of the Department of Economics at Stellenbosch University told Briefly News that South Africa's increasing unemployment rate is indicative of the fact the country's current policies are not working in alleviating the issue.

Fourie says that the country needs to look at trends that were in place in the early 2000s when South Africa had a high unemployment rate that was falling. He explains that at the time, government policies made it easier for people to start their own businesses.

"In the early 2000s, we made it easier for entrepreneurs to start new firms and create jobs," says Fourie.

Fourie explains that over the years government policies have made it increasingly more difficult for people to start businesses but it is also harder for foreign companies to invest in South Africa. This has made foreign firms less eager to invest in the country.

Read also

Gwede Mantashe says ANC can't employ everyone, calls unemployment a 'global crisis'

"We have since made it much more difficult for local and foreign entrepreneurs to set up shop. Any policy that prevents new enterprises should be called a policy against job creation. High administrative loads that require entrepreneurs to complete unnecessary red tape make it more costly to start businesses," explains Fourie.

Private sector could help decrease unemployment

In order to boost entrepreneurship, Fourie says the government should allow the private sector to step in where the government is failing, particularly when it comes to the administration of starting businesses.

He says that the private sector can provide online services that will be beneficial for businesses to manage and continue operations. Currently, some businesses are struggling to renew their company driver's licenses, Fourie explains.

South Africa's latest unemployment rate of 34.4% is a sign of financial depression

Briefly News previously reported that the latest figures from Stats SA survey shows that South Africa's unemployment rate has reached an all-time high of 34.4% in the second quarter of 2021. This is an increase of 1.8% since the first quarter.

Read also

1k or more so called job seekers queue for just 28 jobs, heartbreaking video goes viral

The Quarterly Labour Force Survey (QLFS) complied by Stats SA is a household-based sample survey that gathers information on the labour market behaviours of people in South Africa aged 15 and up, according to IOL.

The QLFS revealed that in the second quarter, the number of employed people fell by 54 000 to 14.9 million while the number of unemployed individuals increased by 584 000. As it stands, 7.8 million South Africans between the ages of 15 and 64 are unemployed.

Source: Briefly News