Good news for unemployment in South Africa

South Africa’s unemployment rate fell in the fourth quarter as finance and manufacturing added jobs.

The jobless rate declined to 31.9% in the three months through December, compared with 32.1% in the previous quarter, according to data released by Statistics South Africa in the capital, Pretoria, on Tuesday.

That is the lowest rate since the third quarter of 2023.

The statistics office said that the number of employed persons increased by 132,000 to 17.1 million in the fourth quarter, while the number of unemployed persons fell by 20,000 to 8 million.

The largest increase in employment came from the finance sector, which added 232,000 jobs, followed by manufacturing, which was up by 41,000. Community and social services shed 63,000 jobs, and trade lost 48,000.

“While 132,000 new employment opportunities created in the fourth quarter should be cheered, the bigger picture of employment in SA remains dismal,” said Elize Kruger, an independent economist. 

“Notably, higher growth and an enabling legislative environment for the labour market is needed to make a proper dent in the high unemployment rate,” she said.

The country’s government of national unity, formed by the African National Congress after it lost its national majority in the May elections, has made lifting economic growth above 3% to reduce unemployment a key priority.

Budget plans

Earlier this month, President Cyril Ramaphosa said the nation will spend more than R940 billion on infrastructure over the next three years to achieve this.

Finance Minister Enoch Godongwana is expected to announce more details in his budget speech on Wednesday.

The drop in the unemployment rate could support his efforts to stabilize debt, grow the nation’s tax base and reduce the number of people dependent on the state.

The Treasury, which has committed 3.4 billion rand to job-creation initiatives in the 2024-25 fiscal year, estimates that over the next three years, 30.6% of the population will receive some form of social grant.

That excludes a stipend for the unemployed introduced during the Covid-19 pandemic.