South Africa’s Jobless Rate Hit 17-Year High Before Lockdown
South Africa’s Jobless Rate Hit 17-Year High Before Lockdown
South Africa’s unemployment rate rose to a 17-year high in the first quarter, even before the full impact was felt of a nationwide lockdown in response to the coronavirus pandemic that brought the economy to a near standstill.
The jobless rate increased to 30.1% from 29.1% in the three months through December, Statistics South Africa said in a report released Tuesday in the capital, Pretoria. That’s the highest number recorded yet in the quarterly labor force survey, that was introduced in 2008. A six-monthly release that was published before that shows the jobless rate at 31.2% by March 2003.
The unemployment rate in Africa’s most-industrialized economy has remained above 20% for at least two decades, largely due to structural barriers, including the education system. President Cyril Ramaphosa said in a weekly letter to the nation on Monday that predictions of businesses shutting down and jobs being lost are now materializing, more than 100 days since the virus was first detected in South Africa. The jobless rate could average 34.2% this year and climb to 35% in 2021, according to a Bloomberg survey.
Companies such as Telkom SA SOC Ltd. and Walmart Inc.’s local unit Massmart announced more than 10,000 job cuts in the first three months of 2020. Firms ranging from energy giant Sasol Ltd. to foodmaker Tiger Brands have said they are considering reductions to their workforces since the lockdown started on March 27. South African Airways administrators are locked in a battle with government and unions over proposals which include cutting about 3,700 positions -- almost 80% of the total. And more than 22,000 jobs hang in the balance at Edcon Holdings Ltd.
At 50,000, the finance industry shed the most jobs in the first quarter followed by community and social services, which includes the government, cutting 33,000. Agriculture employed 21,000 less people and manufacturing trimmed 15,000 positions. In total, the number of unemployed swelled by 344,000 to 7.1 million people.
The trade industry added 71,000 positions and mining 6,000.
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