The South African economy is seemingly caught up in a bind in the recent days. Close on the heels of reported surge in fiscal deficit contributed mainly by the non-performing state-owned utilities like Eskom, the country is facing now one of the worst unemployment crises in the recent history. The unemployment rate in Q2 (second quarter) climbed by 1.4 percentage points. That is, unemployment increased from 27.6 percent in the first quarter of 2019 to 29 percent in the second quarter. In terms of absolute numbers, the number of unemployed persons increased by 455,000 in Q2 2019 following an increase of 62,000 in the previous quarter, according to official figures released. Incidentally, this is one of the highest number of unemployed persons reported since 2013, when the number of unemployed scaled up to 110,000. There were periodic increases in the Q2 of 2018 and Q2 of 2014. But in the subsequent quarters, the number has come down as compared to the previous quarters. What is worrisome is some of the analyst’s findings that the Q3 of 2019 may not give any solace to the debt ridden economy, which is facing flight of capital. Due to the unsavory economic conditions prevailing in the country, investors both domestic and international, are parking their capital outside. Our portal recently has run a story about the decline in the construction activities in South Africa, and the business magnets there are investing in real estate including malls in other counties.
Of the 6.7 million unemployed persons, 57% had an education level below matric and the matric accounted for 33.4% in the second quarter of 2019. The graduates unemployed persons percentage was 2.2% of the unemployed persons whereas 6.9% unemployed had highest level of education.
Recently speaking at a secondary education conference in Johannesburg, President Cyril Ramaphosa underscored the need to absorb young people into the workforce. There is a growing mismatch of skills imparted among young population. People who are graduates and post graduate qualifications are finding difficult to get suitable jobs since their skill profile does not math with what industry or other organizations are looking for.
