Mashatile says South African unemployment crisis is out of government’s control

Deputy President Paul Mashatile said South Africa’s unemployment crisis is largely due to a weak global economy and geopolitics, rather than local policies like Black Economic Empowerment (BEE).

Mashatile also dismissed the argument that Broad-Based Black Economic Empowerment (BBBEE) was a failed policy, saying it should be implemented more rigorously.

This was said in response to a question posed by DA MP Paul Swart in a recent National Council of Provinces Plenary.

In his questions, Swart pointed to South Africa’s high unemployment rate, which increased by 0.3 percentage points to 33.2% in the second quarter of 2025 compared to the first quarter.

Given this high unemployment rate, Swart argued that the country is “past due for a review of your party’s failed policies over the past 30 years”.

He questioned why the government persists with “job-killing policies” like BBBEE and bargaining council restrictions.

Responding to this question, Mashatile said there are many companies in South Africa run by black people that are very successful.

He pointed to recent comments from Minerals and Petroleum Resources Minister Gwede Mantashe, who said most of the companies in the mining and coal industries are run by black people and those who are empowered by the government’s progressive policies.

“It is not this policy that is bringing high unemployment. It’s conditions of the current geopolitical situation as well. Unemployment is not a problem only of South Africa,” Mashatile said. 

“When the global economy is not doing well, it affects us here. So, we must look at this holistically.”

Mashatile insisted that BBBEE is not a failed policy and added, “In fact, I think it must be implemented more rigorously”.

“It is not correct that we are in a country where black people are probably 90% of the population, but 70% is controlled by others. It can’t be allowed. It will never be allowed.”

The graph below, courtesy of Stats SA, shows South Africa’s latest unemployment figures for the second quarter of 2025.

South Africa’s unemployment crisis

South Africa has one of the highest unemployment rates in the world, with the latest figure standing at 33.2%. When including discouraged workseekers, this number jumps to 42.9%.

Economists have consistently pointed to South Africa’s sluggish economic growth as the reason for this, as 600,000 South Africans enter the workforce every year but the economy is not growing fast enough to absorb them into the labour market.

South Africa’s economic growth has averaged an annual rate 0.8% for the past decade, with the population growth rate being 1.4% per annum.

This results in the country’s unemployment rate rising year-on-year as hundreds of thousands of South Africans, particularly young adults, cannot find work in a stagnant economy.

Stanlib chief economist Kevin Lings explained that it points to a fundamental issue in South Africa’s economy and shows that the country’s unemployment crisis will be more challenging to resolve than many think.

Aside from sluggish economic growth, South Africa also faces a severe skills deficit, fuelling the unemployment crisis.

The skills deficit results from a growing mismatch between worker qualifications and the available jobs in the country’s labour market.

In other words, graduates are struggling to access the few opportunities available in South Africa’s job market as their skills are not what is required from businesses.

This leaves many students unable to find stable employment after graduation, which constrains economic growth and exacerbates the country’s unemployment problem.

One criticism of BEE policies in South Africa is that, instead of helping these students and those do not have the same opportunities as others, it has only benefitted a well-connected elite.

Renowned economist Dawie Roodt previously explained that the way empowerment and transformation are implemented in South Africa does not increase access to economic resources for the majority of the population or create wealth for the country. 

BEE and transformation currently redistribute existing wealth among individuals, and do not grow the economy to create more wealth for South Africans. 

Professor William Gumede from the Wits School of Governance estimated that up to R1 trillion has been redistributed to just 100 individuals and companies in South Africa under BEE. 

“I have not done the calculations myself, but I think that could be quite close to the mark, with the beneficiaries of BEE being a handful of individuals that do not add value to South Africa,” Roodt said.