Ramaphosa warns of ‘uneven’ recovery for South Africa

Early data shows that South Africa’s economy is showing signs of recovery, says president Cyril Ramaphosa.

Responding to the SONA Debate in parliament on Thursday (18 February), the president cautioned that while this bounce back is good news, there is also evidence of an ‘uneven recovery’, which risks leaving the most vulnerable behind.

The president was citing data from the NIDS-CRAM survey, published this week, which showed that South Africa recovered as many as two million jobs lost during the Covid-19 lockdown period.

“This data shows that by October last year, total employment had recovered to almost reach the level seen in February, just before the pandemic,” he said.

“While we await the release of new data from Stats SA, these findings are a remarkable early signal of a robust and resilient labour market recovery.”

The president this recovery in employment is the result of both the phased reopening of the economy as Covid-19 was brought under control, as well as the success of relief measures such as UIF TERS that were implemented as part of government’s emergency stimulus package.

“It is these green shoots that we must continue to nurture as we steer the economy towards a full recovery and further growth.”

However, there are several areas of concern, he said.

“The same survey found a high degree of turnover in the labour market, which means that those who lost their jobs in April are not necessarily those who gained jobs in October.

“Women are working fewer hours, and their employment levels have not recovered as robustly as men.”

The president said that this may be due, at least in part, to the disproportionately more time that women spend on child care than men.

“The data also suggests that while the expansion of social grants provided substantial relief to individuals and households last year, hunger has again risen to higher levels than before. This is deeply worrying.”

He said that it demonstrates the need to maintain some of the extraordinary social relief measures government has put in place, and to accelerate its livelihoods support and employment programmes.

“It also highlights the need to move with the greatest speed to restore our most effective social support programmes to full operation, such as the school feeding scheme,” he said.

Jobs – but not the same jobs 

The NIDS-CRAM survey found that approximately 2.8 million people lost their jobs over the lockdown period, representing an 18% decline in employment from 17 million people employed in February, to 14 million people employed in April 2020.

The second wave survey showed that these numbers had not changed from April to June, despite the easing of lockdown over the period.

The latest survey, however, has shown a positive turn, with approximately 2.1 million jobs returned.

“NIDS-CRAM Wave 3 data shows evidence of a substantial job market recovery in October 2020 compared to April (Level 5 Lockdown), and June (Level 3 Lockdown),” the researchers said.

“Between February and April 2020, we had previously found a substantial increase in those who were not employed – from 43% to 52%, as well as an increase in furloughed workers. We now find that by October 2020 the percentage of people employed is much closer to its February pre-pandemic level.”

A notable finding from the survey is that the 2.1 million jobs recovered were not all people who were previously employed, returning to work.

In fact, the researchers found that these workers only made up around half of the figure, with the rest comprising a mix of people previously unemployed before the pandemic, and new entrants into the market.

This means that approximately 1.8 million previously employed people who lost their jobs over lockdown have still not recovered.

“This suggests substantial churning in the labour market, which no longer looks the same as it did prior to the pandemic-inspired lockdowns,” the researchers said.

The fraction of people employed, including furloughed workers, has changed from 57% (February), to 48% (April and June), to 55% in October.


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Ramaphosa warns of ‘uneven’ recovery for South Africa