South Africa’s unemployment rate hits record high at 32.5% in Q4’20 on the back of pandemic
March 9, 2021659 views0 comments
- The government says the market not expanding to absorb more people into employment
- Analysts say the impact of the pandemic may pose more threats to firms making new hires in Q1’21
South Africa’s unemployment rate 170 basis points in three months to 32.5 per cent in the last quarter of 2020 from 30.8 per cent in the third quarter of 2020 as more South Africans started looking for jobs in an economy ravaged by the lockdown restrictions in a bid to curb the impact of the global pandemic. Official unemployment data from the Statistics office of South Africa on Tuesday show.
According to the Pretoria based statistics board, the jobless rate in the country is the highest number ever recorded by the nation as the rate of unemployment according to the expanded definition that includes those who were available for work but are not in search for a job fell to 42.6 per cent in the closing quarter of the year from 43.1 per cent in the preceding quarter.
Highlighting the data published on Tuesday, it was ascertained that the employed individuals in the country increased by 333,000 to 15 million while the unemployed citizens hit 7.2 million people, increasing 701,000 which analysts have stated that the employment numbers have come in worse than the recovery in the nation’s gross domestic product (GDP).
Also, during the period under review for South Africa, the financial sector shed a total 123,000 jobs while the mining industry lost 35,000 jobs. On the other hand, the data as published on Wednesday, revealed that the construction industry, transportation and trade all saw a rise in the number of individuals employed in those sectors by 86,000; 65,000 and 55,000 respectively while a total number 76,000 more citizens were employed by private households.
According to Risenga Maluleke, the Statistician-General of the Statistics Office of South Africa, he stated that: “The unemployment rate in Africa’s most-industrialized economy has remained above 20 per cent for at least two decades, largely due to structural barriers, including an education system that does not provide adequate skills.
“Restrictions to curb the spread of Covid-19 probably caused the economy to contract the most since the Great Depression, with the lockdown forcing some businesses to cut wages, reduce staff or shut permanently. The market is not creating sufficient jobs to absorb enough people of working age into employment,” he revealed.
In a related development, the government of South Africa has allocated the sum of 13 billion Rand which is about $885 million for the creation of jobs in the country in 2020. However, analysts have pointed out that the reintroduction of restrictions at the end of December and further warnings of business rescues may pose further threats to new hires during the first three months of 2021 and this may be another worry for the investment landscape of the country with the treasury seeking ways to fork out more cash to finance a three month extension of a special covid-19 jobless relief grant to unemployed citizens.