The Reserve Bank is also concerned about pricey labour deals fanning inflationary pressure in Africa’s largest economy, Governor Gill Marcus said on Wednesday.
Marcus also said reducing chronic unemployment was one of the country’s most pressing policy objectives and South Africa needed to diversify beyond the mining sector that has traditionally accounted for about 4-6 percent of the economy.
Government data a day earlier showed unemployment was at 25.6 percent in the second quarter and about 4.7 million South African job seekers were without work, the highest figure in the survey’s five-year history.
Marcus said South Africa has faced a jobs crisis for the better part of three decades and its effects would be around for years, partly because of structural challenges.
Labour strife in mining over the past year has slowed production of minerals for export and been a drag on growth. Mining houses have reached wage deals well above the 6 percent inflation rate to bring calm to the troubled sector.
Marcus said labour regulations have not lived up to expectations, with collective bargaining favouring large firms, at the expense of small and medium-sized firms that provide most jobs.
South Africa’s labour laws have been ranked as some of the most restrictive in the world, making labour less competitive than other emerging markets.
The unemployment rate has been stuck at around 22-25 percent for more than a decade and is one of the biggest headaches for President Jacob Zuma’s ruling African National Congress as the country heads into elections next year.