South Africa’s unemployment disaster

In a queue that stretched so far the start was out of sight, Maleshwane Lethaba joined thousands of other young South Africans waiting desperately for a chance at work.

Visibly drained in the summer heat, the 23-year-old stood in line for hours last week in Johannesburg’s leafy northern suburb of Rosebank to apply for one of 500 apprenticeships on offer at Cartrack Holdings Ltd. The vehicle-security company said it received more than 7,000 applicants.

“I have tried countless times. It would mean everything for me to get this job,” said Lethaba. “Even being a cleaner at this point.”

She lives in Soweto, a township of more than 1.5 million inhabitants southwest of the city, in a household of seven people, of whom only one has a job.

The story of Lethaba, searching fruitlessly for work for more than two years, is all too common in a nation wracked by deep inequality and an unemployment rate among the highest in the world at 32.1%.

Jobs and the economy will be a core part of President Cyril Ramaphosa’s message on Thursday when he delivers his first State of the Nation address since his African National Congress party was forced into a broad governing coalition last year to stay in power.

Investors want to hear about concrete plans to upgrade the nation’s fraying infrastructure, a key reason growth has averaged below 1% annually for the last decade, and the jobless rate remains high.

The so-called government of national unity formed after the May elections stripped the ANC of its majority for the first time since 1994 and has made creating jobs a top priority.

But those standing in line have heard it all before.

“Every year they tell us there’s going to be more job creation,” said Jasmine Johnson, 27, who’s been without work since losing her job three years ago.

“You ask yourself: What were these people speaking about in the budget speech or when they were addressing the nation?”

With more than 12 million people out of work, unemployment remains a significant obstacle to the GNU’s goals of lifting prosperity while potentially clouding the country’s political future.

South Africa’s high level of joblessness is a “ticking time bomb,” said Keabetswe Mojapelo, a macroeconomist at Rand Merchant Bank.

“Having so many people unemployed over a long period does have an adverse impact on not just the economy, but social building.”

He worries it may undermine the GNU, whose formation in June has boosted business and investor confidence and could see voters turn to the country’s populist opposition.

National elections are not scheduled to be held again until 2029, though a municipal one next year will shed light on the political mood in Africa’s most industrialised nation.

A persistently depressed labour market also adds pressure to social spending, making it harder for Finance Minister Enoch Godongwana to control public finances.

Godongwana delivers his annual budget in Cape Town on February 19, with updated estimates for growth and borrowing.

Too slow

According to Jee-A van der Linde at Oxford Economics, annual economic growth needs to reach 3% to sustainably ease South Africa’s unemployment rate.

On Tuesday, the World Bank forecasted 1.8% growth in 2025 — an upgrade from a previous estimate of 1.3% — but warned the nation that it would need to do better than that to shrink poverty and unemployment.

The Washington-based lender said the economy only managed to create 526,000 jobs between 2019 and 2024, against 1.8 million new entrants into its labour market.

That lacklustre performance has contributed to an unemployment rate among 15 to 24-year-olds of almost 60%.

The severity of the crisis has led Sunshine Morweng, who graduated from university with a degree in accounting science, to join the queue for a job in a totally unrelated field.

“Is this how many people are actually unemployed,” the 25-year old said in reaction to the masses of people lined up with her for a job. “Imagine how many are sitting at home still and didn’t hear of this or can’t get here. It’s scary.”