Harsh reality check for South Africa
South Africa will never be able to overcome one of its most crushing crises—unemployment—as long as economic growth continues to stagnate.
Stats SA revealed last week that South Africa’s unemployment rate climbed once again to 33.2%, meaning one third of the workforce is sitting without a job.
According to Business Leadership South Africa (BLSA) chief executive Busi Mavuso, this is a devastating statistic that shows the country and the economy are still suffocating under the weight of the government’s structural ineffciencies.
While the government has promised to change this through economic reforms, it is not happening even close to fast enough to dent unemployment.
“Our unemployment crisis demands urgency. At current growth rates below 1%, we’re condemning millions to economic exclusion while our working-age population continues expanding,” Mavuso said.
“The mathematics are unforgiving: without growth exceeding 3% annually, job creation cannot outpace new entrants to the labour market.”
Mavuso said this harsh reality goes beyond just statistics and numbers on a page, adding that the social and political consequences of prolonged economic stagnation extend into all aspects of the country.
It is an existential crisis.
“High unemployment fuels inequality, undermines social cohesion and erodes faith in democratic institutions,” she said.
“We’re not merely discussing policy preferences; we’re racing against time to preserve South Africa’s stability and prosperity.”
Mavuso said that the government needs to do more to address this problem, referencing other countries that have taken swift action to address impending crises.
This was done by cutting red tape and changing laws in very short order to enable markets to react and deal with problems, like the Russian invasion of Ukraine and the resultant energy crisis in Europe.
While South Africa has tried to do similar—with some success in areas like energy generation—”we’re moving too slowly,” Mavuso said.
One critical failure point is that South Africa’s ports remain under single-operator control, an anomaly that creates systemic risk.
South Africa is virtually unique globally in that it has one entity running all ports, rail, and regulations. This creates a devastating single point of failure that threatens our entire trade infrastructure.
This isn’t something that exists in theory—the country suffered huge economic fallout in 2023/24 when failures at Transnet led to critical blockages at the country’s ports.
More than 18 months later, and the country is still trying to turn things around.
“While performance is improving incrementally, we need fundamental restructuring through private concessions that introduce competition and investment,” she said.
“The stalled Durban container port concession, bogged down in litigation, exemplifies how poor process management undermines even sensible reforms.”
Tight timeline
BLSA has launched a quarterly Reform Tracker that aims to keep track of the various reforms the government has launched to try to overcome the country’s polycrisis.
Currently, it is tracking 240 reform initiatives, 80 of which are on track. Only 21 are actually completed.
Mavuso said that South Africa cannot function or accept that things are “business as usual” and requires the government take urgent action, and for other roleplayers to demand it.
“We need intolerance for delay and excuses, replaced by relentless focus on measurable outcomes. What we need now is unwavering leadership that treats economic transformation with urgency.”
She added that, if South Africa can maintain momentum and accelerate reforms in lagging areas, growth rates above 3% could be achievable within two years months.
At that point, South Africa could finally see its unemployment numbers start declining, investment increases and the country reclaiming its economic potential.
But to do this, the country and the government need to face the stark reality that things are not happening fast enough.
“The Reform Tracker will measure whether we’re serious about this timeline – or whether we’ll allow another generation to become spectators in their own economy. The choice and the urgency are ours,” Mavuso said.
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