Nkosikhulule Nyembezi
Cape Town - After Statistics South Africa’s (Stats SA) August 23 announcement that South Africa’s unemployment rate fell to 33.9% in the second quarter (Q2) of 2022, from 34.5% in Q1, people in different parts of the country are asking what to make of these figures – and what the government might do next to improve or worsen the situation.
On Tuesday morning, Stats SA released the new employment figures in the Quarterly Labour Force Survey, showing improvements led mainly by job gains in the community and social services, trade, finance and construction sectors. That afternoon, several of my friends shared mixed feelings.
While the survey shows the country’s unemployment rate stood at 33.9% in the second quarter of the year, marking a 0.6% decline in the data from 4.5% in the first quarter, that description tells only a tiny part of the story of South Africa’s economy enduring unusual major shocks since the Covid-19 pandemic began early in 2020.
Provincially, the Eastern Cape has the highest unemployment rate at 42.8% (expanded, 51.8%). Limpopo has the second highest unemployment rate at 36.3%, but KwaZulu Natal has the second highest expanded rate at 49.4%. The Northern Cape has the lowest unemployment rate at 23.7%, but the Western Cape has the lowest rate by the expanded definition at 31.3%.
Think about it, the government spinning off the unemployment statistics crisis can partially neutralise public discontent at the statistics level.
Celebrating a recovering economy becomes meaningful when there is demonstrable evidence of improvements in the quality lives of ordinary citizens surviving on irregular and unpredictable income.
The government needs to kindle renewed purpose in attracting investors by holding off the slump in investor confidence, which has significantly faded in the past two years.
There are high expectations for the government to provide citizens substantial relief from the grinding economic, social and psychological pressures when the finance minister presents the Mid-Term Budget Policy Statement in October.
While the improved employment figures may be welcome, they do not change the picture of the country’s mass unemployment crisis.
Most people in my social circles confirm that their skilled family members and friends are still unemployed.
There are many unresolved questions about the unemployment challenge – and the socio-political consequences that could flow from it as the country nears the 2024 national and provincial elections.
Right-wing politicians are likely to further polarise the political landscape by peddling xenophobia and tribalism in their election campaigns.
The latest employment statistics, one of many in the family of statistics that help us better understand our living conditions, should provide insights into the profound problems we face as a country and the opportunities to work together to find lasting solutions.
It is hard to assess some of the claims by the government regarding what accounts for the improvement in employment statistics with any certainty, as different government authorities have given limited evidence to back up their version of events. While several government departments have been coy in discussing the statistics publicly, dropping heavy hints but not explicitly taking credit, trade unionists have been busy briefing stakeholders.
They are highlighting their dissatisfaction with government labour policies that have caused much discontent in the negotiations for the social compact plan announced by President Cyril Ramaphosa in his State of The Nation Address last February.
The youth unemployment rate, measuring job-seekers between 15 and 24 years old, fell to 61.4% in the second quarter of 2022, the lowest in almost two years, from 63.9% in the previous quarter.
Pandemic-led labour market woes at the time saw the country’s unemployment rate at 35.3%, the highest rate ever reported since the Quarterly Labour Force Survey began in 2008.
During the assessed period, the labour market had to deal with two major economic shocks in the form of KwaZulu-Natal’s (KZN’s) devastating April floods and the country’s worst bout of blackouts.
Severe flooding in KZN saw hundreds of people killed, over 40 000 displaced, and more than 10 000 homes destroyed. As one of the country’s manufacturing and farming hubs, the impact of the floods caused enormous economic disruption.
The Department of Trade, Industry and Competition estimated that at least 826 companies were affected, placing about 31 200 jobs at risk.
Then, June saw consumers and businesses battling the worst load shedding yet, exacerbated by a labour strike by Eskom employees.
Eskom, as a result, implemented Stage 6 load shedding, threatening households and businesses to be without electricity supply for up to 10 hours a day.
This situation weakened business confidence and the country’s investment outlook.
South Africans felt safe under Ramaphosa’s leadership, with much praise for the government-led consensus in various summits and conferences. Their images are lately circulating in the media, showing them fleeing away from the political and financial commitments to invest in labour-intensive industries, with plumes of black smoke emanating from the 2021 political unrest visible in the distance.
In the most critical indication yet that the government will not implement all of the Zondo Commission’s recommendations, Ramaphosa stated last week that they are not binding.
The president’s statement – which came in an answering affidavit lodged at the Gauteng High Court (Johannesburg) to the DA’s application for cadre deployment to be declared illegal and unconstitutional – is the first time the government has spoken against the commission’s findings.
It came amid Ramaphosa’s October 22 announcement to Parliament about his plan of action regarding the commission, which sat for more than three years and cost the government more than R1bn.
Finally, these employment statistics confirm South Africa needs a sense of fresh momentum to maintain broad stakeholder support everywhere.
In the early years of Ramaphosa’s presidency, the story of a “New Dawn” propelled by the “Ramaphoria” tide promising to rescue the country from corruption was enough to create a wave of public and political support across socio-economic sectors.
As the list of unfulfilled promises keeps enlarging, sympathy and solidarity will ebb. Both the electorate and investors are likely to become warier in supporting a leader already displaying signs of a lame duck. The ANC is known for brinkmanship. But brinkmanship is itself a danger, bearing the risks of unintended disaster. Whatever confidence the ANC has gained from these improved employment statistics, it should not mistake events this last quarter as offering respite.
* Nyembezi is a policy analyst and human rights activist
Cape Times