South Africa heading for social unrest

South Africa needs to significantly increase its economic growth to ensure social stability, with growth rates of between 2% and 3% required.

If the country cannot attain higher growth, its severe inequality, which has worsened as South Africa’s economic growth has stalled, could reach a boiling point and spark unrest.

Investec chief investment strategist Chris Holdsworth said it is critical that South Africa attains faster economic growth.

Speaking to Newzroom Afrika on the sidelines of the World Economic Forum in Davos, Switzerland, Holdsworth explained that South Africa’s economic growth would need to more than double from levels seen over the past decade.

“Just to ensure social stability, we’re going to need GDP growth of 2 to 3% at least, possibly more,” he said.

Holdsworth’s view echoes perspectives shared by other experts who have warned that South Africa is on a treacherous path.

In October 2025, former Goldman Sachs Sub-Saharan Africa CEO Colin Coleman said South Africa desperately needs to improve service delivery and revive its economic growth to remove the conditions that have produced a sharp rise in criminality and unrest.

“At the current rate at which South Africa is imploding and the rate of increase in unhappiness, unemployment, and criminality, with the amount of emerging scandals, I cannot see an outcome where we do not call an early election,” Coleman said.

“This is because the population is likely to want to have a renewed mandate for a government that they trust, and there has been a significant breaking of trust.”

“If this continues, it is going to produce pressure upon pressure, which I think will produce a boiling point earlier than the 2029 elections.”

The loss of trust Coleman warned of is the result of over a decade of economic stagnation, with the country’s GDP growth having averaged 0.8% for the past ten years.

While the country’s fortunes are expected to improve in 2026, with 1.4% GDP growth projected, this is not close to the level South Africa needs to meaningfully address unemployment and inequality in the country.

Unemployment time bomb

South Africa’s high levels of unemployment have been a cause of concern for years, with even politicians having sounded the alarm over the threat it poses to social cohesion.

In 2023, Deputy President Paul Mashatile described South Africa’s high youth unemployment as a “ticking time bomb”.

“We must summon enough bravery to discuss this matter openly in order to prevent the ticking time bomb of poverty, inequality and joblessness from going off,” he warned.

In the third quarter of 2025, South Africa’s unemployment rate stood at 31.9%. While an improvement from the quarter before, this still means that nearly a third of South Africans are unemployed.

More worryingly, South Africa’s economy is not growing fast enough to absorb new entrants to the workforce, much less create enough jobs to make a dent in current unemployment figures.

Stanlib chief economist Kevin Lings previously explained that South Africa needs growth rates of between 3% and 4% to add enough jobs to absorb the number of people entering the labour market each year.

Lings explained that over 600,000 South Africans enter the workforce every year, yet the country’s economy grows by, on average, less than 1% a year.

“We have 600,000 people entering the labour force every year who have to be accommodated with employment and opportunities,” Lings said.

“If we do not accommodate these people, it translates directly into unemployment, particularly youth unemployment.”

To illustrate this problem, he explained that, since the beginning of the Covid-19 pandemic, the economy has expanded by 3.5% in real terms. 

However, over that same timeframe, the population has grown by more than 6%, meaning the growth in the economy is not keeping pace with population growth.

“This results in income per capita falling, on average, resulting in the living standards of South Africans stagnating and then falling,” Lings said. 

“We have got to do a helluva lot more to lift the growth rate on a sustainable basis and then get that to be accompanied by a meaningful increase in formal sector employment.”

He explained that, even at the peak of South Africa’s economic growth in the mid-2000s, when output grew by over 4% a year, the economy added only around 500,000 jobs a year. 

Therefore, even if South Africa achieved faster growth, the unemployment rate would still increase year-on-year, albeit at a slower rate.