More than 1 in 10 university graduates cannot find a job in South Africa

Over 12% of university graduates are unemployed in South Africa, with the number steadily increasing as the country’s economic stagnation limits job opportunities. 

Long held as a bulwark against unemployment, university degrees and other tertiary education qualifications no longer come with the guarantee of a job. 

This can be seen in Stats SA’s latest Quarterly Labour Force Survey (QLFS), which revealed that graduate unemployment continues to tick upwards. 

The QLFS showed that graduates have an unemployment rate of 12.2%, which increased by 1.8 percentage points year-on-year in the first quarter of 2026. 

While this is significantly below the broader unemployment rate of 32.7%, the graduate unemployment rate rose at a faster rate than for those without a matric.

“Year-on-year comparisons indicated that the unemployment rate decreased among those with below matric but increased among matriculants and graduates,” Stats SA said. 

Those with other tertiary education levels remained virtually unchanged, indicating a slight shift in demand for particular skills and labour from the local economy. 

University graduates are no longer immune from the impact of South Africa’s stagnant economy, which is failing to absorb a growing labour force. 

South Africa’s economy, which is growing at an annual rate of around 1%, creates just over 100,000 jobs per annum. 

While this sounds like a significant number, the country’s labour force grows by around 500,000 to 600,000 individuals on an annual basis. 

This leaves a significant share of new labour market entrants without a job, and graduates are increasingly falling into this category. 

However, a university degree dramatically improves the employment prospects of South Africans, even compared to those with other tertiary qualifications. 

South Africans with just a matric have a higher unemployment rate than the national average at 35.7%, and those who do not finish school have a 37.6% unemployment rate. 

Those with other tertiary qualifications outside of university degrees have an unemployment rate of 22.2%. This is in stark contrast to to the graduate unemployment rate of 12.2%. 

This can be seen in the graph below, courtesy of Stats SA. 

Widening skills mismatch

The challenge of graduate unemployment in South Africa is more challenging than other kinds in that it is not only about economic growth. 

Increases in graduate unemployment are partly due to university graduates increasingly finishing their studies without skills that are relevant to the South African economy. 

As a result, there is an increasing skills mismatch between what universities produce and what businesses in the economy require. 

This results in a significant chunk of university graduates being unable to find jobs even when companies are hiring or the economy grows. 

South African companies are then faced with a unique challenge to find employable individuals in a country where 8.1 million people are unemployed. 

This also creates a war for that talent, particularly in specialised fields such as technology, where companies have to fight for graduates with the right skills. 

Alexforbes’ head of research, Premal Ranchod, explained that this is because South Africa’s talent pipeline for finance and investment narrows relatively early on. 

Ranchod said that weak mathematics and science outcomes at school significantly limit the number of students who can acquire high-level quantitative skills. 

This leaves South African financial service providers, who have been growing strongly in the past few years, fighting for an increasingly small number of graduates. 

The impact extends far beyond individual companies, with the lack of relevant skills among university graduates creating a vicious cycle. 

In this cycle, the lack of skills leaves productive companies unable to scale sufficiently to create more jobs, more tax revenue, and increase their output. 

It also results in the productivity of South Africa’s labour force steadily declining, limiting economic growth and organic growth in tax collections. 

As a result, the state has less money to allocate towards funding quality education, resulting in worse outcomes and labour productivity.

Coronation’s economics unit explained that this effectively robs South Africa of the most effective way to grow an economy – increasing productivity. 

Productivity growth ensures a long-term increase in economic activity and enables an economy to grow at a rate greater than its potential labour and capital would otherwise facilitate. 

In effect, productivity growth enables more output to be created from the same capital and labour resources, creating a virtuous cycle.

Over the past decade, the labour component of the equation has shrunk as unemployment has risen significantly. 

More worryingly, productivity collapsed, which creates severe challenges for a modern economy, ranging from slow growth to financial crises. 

This has been a consistent drag on South Africa’s economic growth over the past decade, with no signs of a reversal.