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SA unemployment: Where to from here?
The official unemployment rate in South Africa rose to 30.8 per cent in the third quarter. This is the highest rate, since the commencement of the Stats SA Labour Force Survey in 2008. Kevin Lings, Chief Economist at Stanlib joins CNBC Africa to unpack the numbers.
Thu, 12 Nov 2020 19:03:47 GMT
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AI Generated Summary
- The official unemployment rate in South Africa has surged to 30.8% in the third quarter, the highest level since 2008, reflecting the profound impact of the COVID-19 pandemic and associated lockdown measures.
- While over 500,000 jobs were added in the quarter, the country still faces the challenge of recovering from the loss of 2.2 million jobs in the previous period, highlighting the extensive efforts required to address the unemployment crisis effectively.
- Sustained job creation, economic growth, and targeted investments, particularly in skills development and infrastructure projects, are essential to driving employment levels and fostering broader economic recovery in South Africa.
South Africa is grappling with a rise in the official unemployment rate, which has reached 30.8% in the third quarter. This marks the highest rate since the inception of the Stats SA Labour Force Survey in 2008. Kevin Lings, Chief Economist at Stanlib, joined CNBC Africa to delve into the numbers and provide insights on the current state of unemployment in the country. Lings highlighted the complexities in interpreting the unemployment figures, especially considering the impact of the COVID-19 pandemic and the subsequent lockdown measures. The second-quarter data presented a distorted picture due to changes in how unemployment was calculated. The unemployment rate dropped to 23%, which was deemed anomalous as many individuals were unable to actively seek employment during the lockdown period. The latest figure of over 30% is seen as more reflective of the true state of unemployment in the country. Despite the addition of over 500,000 jobs in the quarter, it is crucial to note that this number falls short of recovering the 2.2 million jobs lost in the previous quarter. This discrepancy underscores the ongoing challenges in the job market and the significant efforts required to address unemployment effectively. Lings emphasized the importance of sustained job creation and economic growth to alleviate the unemployment crisis. He pointed out that job gains were observed across various sectors, including the formal and informal economies. The gradual relaxation of lockdown measures has facilitated the reopening of businesses and the return of workers, particularly in the household and informal sectors. Lings expressed optimism that continued economic recovery and government-led initiatives, such as infrastructure projects, could further stimulate job creation and enhance employment levels. However, he acknowledged the substantial task ahead, given the annual influx of 600,000 individuals into the labor market. Addressing the high youth unemployment rate of 74% requires a focused approach on skills development and creating opportunities for young people to enter the workforce. Lings also highlighted potential headwinds to job creation, including external factors such as global economic uncertainties and the impact of second lockdowns in major trading partners. Despite these challenges, he stressed the need for targeted investments and policies aimed at boosting employment and driving economic recovery. Lings underscored the interconnected nature of job creation and economic growth, noting that a positive cycle of employment expansion could lead to further economic development and prosperity. While the road ahead may be challenging, Lings remains hopeful that concerted efforts and strategic interventions can help South Africa overcome its unemployment challenges and create a more resilient and inclusive labor market.
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