Minister in the Presidency Khumbudzo Ntshavheni
Minister in the Presidency Khumbudzo Ntshavheni

Cabinet concerned about 9% unemployed university graduates

By Baldwin Ndaba Time of article published Jun 10, 2021

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President Cyril Ramaphosa’s Cabinet has expressed concern that the unemployment rate of university graduates during the first quarter of 2021 stood at 9.3% and the Minister in the Presidency Khumbudzo Ntshavheni described it as “worrisome.”

Minister Ntshavheni made the comments following the release of the Quarterly Labour Force Survey (QLFS) this week which revealed that the number of unemployed people during the first quarter of the year remained at 15 million people.

It was a slight decrease of 28 000.

“The number of unemployed persons also remained almost unchanged at 7.2 million compared to the fourth quarter of 2020 (increased by 8 000). The number of discouraged work-seekers increased by 201 000 (6.9%) between the two quarters, with a net increase of 164 000 in the not economically active population,” Ntshavheni said.

She said these minor changes resulted in the official unemployment rate increasing by 0.1 of a percentage point from 32.5% in the fourth quarter of 2020 to 32.6% in the first quarter of 2021 – the highest since the start of the QLFS in 2008.

The unemployment rate according to the expanded definition of unemployment increased by 0.6 of a percentage point to 43.2% in Quarter 1 of 2021 compared to Quarter 4 of 2020.

“The official unemployment rate among youth (15-34 years) was 46.3% in Quarter 1 of 2021. The rate was 9.3% among university graduates. Formal sector employment increased by 79 000 while the other sectors experienced declines in employment in Quarter 1 2021.

“Informal sector employment decreased by 19 000 (0.8%); private households by 70 000 (5.8%), and employment in agriculture decreased by 18 000 (2.2%),” Ntshavheni said.

She said some industries created jobs while others lost jobs between Quarter 4 of 2020 and Quarter 1 of 2021, resulting in a net decline of 28 000 in total employment.

According to the Cabinet, employment mainly increased in finance (up by 215 000) and other industries that had job gains include community and social services (16 000), utilities (16 000), mining (12 000) and manufacturing (7 000). Job losses were observed in construction (87 000), trade (84 000), private households (70 000), transport (40 000) and agriculture (18 000).

She, however, said there was a glimmer of hope after the economy grew by 1.1% in the first quarter of 2021 (January-March), translating into an annualised growth rate of 4.6%. This followed a revised 1.4% (annualised: 5.8%) rise in real GDP in the fourth quarter of 2020.

The finance, mining and trade industries were the main drivers of output on the production (supply) side of the economy, while household spending and changes in inventories helped spur growth on the expenditure (demand) side.

“Despite this being the third consecutive quarter of positive growth, the South African economy is 2.7% smaller than it was in the first quarter of 2020,” Ntshavheni said.

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