South Africa’s unemployment rate reached a record high in Q3 2021 on the back of continued lockdown restrictions, load shedding and the July riots impacted jobs in the country.
The latest Quarterly Labour Force Survey (QFLS), published by Statistics South Africa on Tuesday (30 November), shows that the official unemployment rate increased by half a percentage point from 34.4% in the second quarter of 2021 to 34.9% in the third quarter of 2021. This is the highest unemployment rate since the start of the QLFS in 2008.
The data shows that the number of employed persons decreased in all provinces except the Northern Cape between Q2 2021 and Q3 2021.
The largest employment decreases were recorded in Gauteng (-200,000 jobs), the North West (-128,000 jobs) and KwaZulu-Natal (-123,000).
The updated unemployment data shows that there are now three provinces in South Africa with an expanded unemployment rate of more than 50%:
- The Eastern Cape (54.5%);
- Limpopo (54.5%);
- The North West (52.2%).
The job losses were in part due to stricter lockdown measures to curb the spread of a third wave of Covid-19 infections, a security breach at the state-owned port operator that hobbled trade and deadly riots in KwaZulu-Natal and the commercial hub of Gauteng – the two biggest provinces by contribution to gross domestic product, Bloomberg reported.
The July riots saw thousands of businesses ransacked and shuttered and cost the country about R50 billion in lost output, according to the South African Property Owners Association. They also probably contributed to an economic contraction in the third quarter that’s being forecast by the Finance Ministry and central bank.
A three-week steel and engineering industry strike, the resumption of rolling blackouts and the emergence of a new coronavirus variant that prompted several nations to ban travel to and from the country right before its summer holiday season, are set to crimp growth in the fourth quarter.
That would further derail South Africa’s recovery from its worst contraction in almost three decades and lead to more job losses in the final quarter.
Increased unemployment could put pressure on authorities to extend relief measures that would complicate efforts to restrain public spending and meet its fiscal targets.
It could also see the state expanding its job initiatives. The nation set aside R11 billion in its 2021 budget to support the creation of more than 440,000 short-term jobs until March.
With further reporting by Bloomberg.