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Evidence that shows Ramaphosa has a jobless crisis in SA

Unemployment rate rises to highest in 11 years.
President Cyril Ramaphosa delivers his state of the nation address to a joint sitting of parliament. Picture: GCIS

As if a recession risk and a near-bankrupt power utility aren’t enough, South African President Cyril Ramaphosa now also has to deal with the news that unemployment has surged to the highest level in more than a decade.

The jobless rate in South Africa rose to the highest in at least 11 years, according to Statistics South Africa’s current data series that starts in 2008 and is based on a quarterly survey. It gets worse: earlier biannual data published by the agency suggests that unemployment is now at the highest since 2003, when it was at 31.2%.

Read: Unemployment jumps to highest since at least 2008

The latest increase was partly because 150 000 additional people reached working age and the number of people classified as discouraged work seekers or not economically active dropped by more than 300 000, which means they were included in the official jobless rate. Still, the expanded definition of unemployment, which includes people who have given up looking for work, increased to 38.5% from 38%.

Gross domestic product contracted the most in a decade in the first quarter. While the Reserve Bank said economic growth probably rebounded in the three months through June, the surge in unemployment is also due to the lagged effect of poor output at the start of the year, according to Siphamandla Mkhwanazi, an economist at FirstRand Group’s First National Bank.

Ramaphosa pledged to boost growth to 5% by 2023 when he was campaigning to become leader of the ruling African National Congress two years ago. This is also the rate that the National Development Plan, the government’s 2012 economic blueprint that Ramaphosa co-authored, says is needed to reduce joblessness to as little as 6% by 2030. According to central bank forecasts, expansion will only reach 2% by 2021.

“South Africa’s economic malaise is weighing heavily on the country’s ability to create employment,” PwC economists Lullu Krugel and Christie Viljoen said. “Turning the tide on the weak economy is not enough” because structural changes such as improving the quality of governance, increasing the level of competition in many industries, more labor-market flexibility and reducing the cost of doing business are needed, they said in an emailed note.

New population estimates show there are 58.8 million people in South Africa. Almost 30% of them are younger than 15 years and will enter the labor market in the next decade.

“Any viable solution to the unemployment crisis will need to include a significant revaluation of the current education system to ensure necessary skills are produced for the economy,” Lara Hodes, an economist at Investec Bank, said in a note.

Government’s grace

Job losses are likely to continue: Business liquidations rose 25% in the second quarter compared with a year earlier. And with the government wage bill making up more than 35% of the national budget, the National Treasury said in February it will scale up early retirement for state employees to cut costs. Community and social services, which includes government, is the largest employer in the country.

© 2019 Bloomberg L.P.

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He has had this crises for almost a decade now and has done nothing about it except talk. Unlike what he tries to portray he is not new at this he has been around for a long time.

He needs to realize that talk (and lying) is cheap.

The whole world has picked up on this. We are not all ANC voters.

The government is all out of ideas on this one.

So are the unions. Was listening to zweli Vavi yesterday and he is clueless on how to create jobs. All he could offer is that we should have a wealth tax. OMG,for a man who has been seized with this problem his whole professional life to have zero to offer speaks volumes for the whole of the tripartite alliance.

Given that the the world is replete with examples of countries that have pulled themselves up by their bootstraps, one can only conclude that the government lacks the intellect to get the country going.

Really depressing

Well, from a Labour Law perspective, there is NO CRISIS: as far as I can tell, I think almost all employers abide by the Basic Conditions of Employment Act by paying at least the minimum legislated wage.

SA employers follow the rules. What is the problem?

Common sense, the missing factor that is incomprehensible by the African National Corruption party, forming the current guavamund regime.
We need investment. Then cANCer pushes EWC through parly, and don’t worry, it is very minor and will not be as bad as it looks. Ja well, GST (general sales tax, renamed to VAT), started at about 2% and is now 15%. Alternative routes to toll routes are dead. And now you tell prospective foreign investors that EWC will never touch their mines/ factories/ other capital investments?
What does cyril the squirrel care? He gathered multi-billion Rands (as a professional beneficiary, certainly not due to his great business acumen), and so did his wife. Each is stinking rich in own right, and together they are extremely wealthy. I’m sure most of their money is outside SA and I will not be surprised if they are already citizens of a few other western countries. Burn, the beloved land, burn!

If more then 55% of the populace voted for the ANC year in and year out, I do not call it a crises, a call it happy with the status quo

If the statistics are to be believed then more than 17 million people will enter the job market over the coming two decades. At a “thumb-suck” that calculates to a simple ball park average of 850 000 per annum! How on earth will SA’s economy absorb these job-seekers?

“It’s not a crisis. It’s merely a CONSEQUENCE” (of past actions)

End of comments.

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