South African cities with the best and worst employment rates

Job creation is a crucial yardstick for cities, as employed individuals are the single biggest driver of GDP in each municipality.

The South African Cities Network (SACN), through its latest State of Cities Report (SoCR) points to ‘unacceptably high’ unemployment figures in every major metropolitan area.

Nelson Mandela Bay currently leads with the highest unemployment rate, followed by Mangaung and Ekurhuleni – meanwhile, the City of Cape Town metro has the lowest unemployment rate.

By 2050 the South African urban population is expected to increase by between 19 and 24 million people, joining approximately 68% of the population who already live in cities.

Increased urbanisation places additional pressure on already stretched resources and makes it harder to deliver on the Integrated Urban Development Framework’s (IUDF) goals which promote access, growth, governance and spatial transformation, said the South African Cities Network.

It said that job creation is undoubtedly the greatest priority for all spheres of government right now as Statistics South Africa data reveals one of the highest unemployment figures in the world.

First-quarter data from the stats body shows unemployment at 34.5%, with the expanded definition much higher than that.

Danga Mughogho, programme manager of the SACN, highlighted the country’s huge youth unemployment crisis – with the youth unemployment rate remaining at a staggering 66.5%.

StatsSA said that the country has over 10 million young people aged 15-24 years and, of these, only 2.5 million were in the labour force, either employed or unemployed.

The largest share (7.7 million or 75.1 %) of this group of young people are those that are out of the labour force (i.e. inactive). The main reason for being inactive is discouragement, i.e. they have lost hope of finding a job that suits their skills or in the area they reside.

As many as 37% of this group were disengaged from the labour markets. These are regarded as youth not in employment, education or training (NEET).

Of the 40 million working-age population in Q1:2022, more than half (51.6%) were youth – 15-34 years.

The current national absorption rate was recorded at 37.3% and remains lower for young people at 9% among those aged 15-24 years.

Mughogho said this age group is best positioned to meet key digital skills demands, especially in the IT and data science sectors – where there is a war for talent among the banking and retail sectors, specifically – and that cities can contribute greatly to skills development among our youth, which will go a long way towards eradicating joblessness.

The report provides an insightful look at SACN’s nine participating cities, namely Buffalo City Metropolitan Municipality, City of Ekurhuleni, City of Joburg, City of Tshwane, eThekwini Metropolitan Municipality, Mangaung Metropolitan Municipality, Msunduzi Local Municipality, Nelson Mandela Bay Metropolitan Municipality as well as Cape Town.

The performance of each is reviewed using data from the South African Cities Open Data Almanac (SCODA)- a city-centric open data portal offering data from reliable sources. The review offers insight on performance measures such as employment, service delivery, levels of poverty, contribution to the national economy and levels of poverty, among others.

Here are the cities with the best and worst employment rates:

The getaway to the Eastern Cape Province, Nelson Mandela Bay is located on the shores of Algoa Bay, midway between Cape Town and Durban and 1,058km from Johannesburg.

The SoCR report showed that 1,207,484 people call it home and it has 347,476 households. As many as 640,000 people live on less than R1,077 per month.

Service delivery is good, according to the report, with 98.6% of households receiving access to electricity, 97.1% to basic sanitation, 97.7% to water and 88.3% to refuse removal.

Revenue generated by the municipality was R10.1 billon and it spent 100% of its budget.

Msunduzi KwaZulu-Natal

The report shows that 696,689 people live in Msunduzi and occupy 184,205 households. This municipality includes the capital city of the KwaZulu-Natal Province, Pietermaritzburg.

The unemployment rate is 34.2%, according to the SoCR report, and this municipality contributes just R32 billion to the national economy. While 97% of households had access to electricity, 99% to basic sanitation and 91% to water, just 52% received weekly municipal refuse removal.

A total of R5.2 billion in revenue was generated although 115% of its budget was spent.

City of Johannesburg

The City of Johannesburg has a population of 5,738,536 who occupy 1,996,276 households.

The city contributes R445 billion to the national economy, with a labour force exceeding 4 million. The report states that 45.5% of the population lives on less than R1,183 per month (2016).

Johannesburg’s municipality generated revenue of R52.3 billion of which 95% was spent. When it comes to service delivery, 96.1% of households have electricity, 96% have access to basic sanitation, 97.1% to basic water supply and 91.9% of households have weekly municipal refuse.

Mangaung

Bloemfontein, Botshabelo and Thabo Nchu make up the three urban centres of Mangaung and collectively it has a population of 858,975, the SoCR report stated.

There are 287,026 households of which 11.7% are informal. The municipality contributes R59 billion to the national economy. StatsSA data shows a labour force of 343,000.

During the 2018/2019 financial year, R6.8 billion in revenue was generated by the municipality yet it was 125% over budget.

Ekurhuleni

The City of Ekurhuleni continues to contribute positively to the national economy, having generated R196 billion in 2019, reports the SoCR.

Of the working population in Ekhurleni, 11.6% receive their income through their own income compared to the 66.4% who receive salaries, wages or commissions.

The report showed that R35.1 billion was generated by this city in revenue while 108% of the budget was spent on debt impairment, employee-related costs, contracted services and other expenditures.

Tshwane

The largest metropolitan municipality in the Gauteng Province, it also includes South Africa’s executive capital Pretoria. 3,649,053 live in the city and there are 1,162,418 households.

The SoCR shows that 93.2% receive access to electricity, 83.7% to basic sanitation, 91.3% to water and 82% receive refuse removal.

The city contributes R296 billion to the national economy. According to StatsSA, it contributes at least 26.8% of the Gauteng Province’s GDP and 9.4% of the GDP of the national economy.

Cape Town

The City of Cape Town includes South Africa’s second-largest city (Cape Town) and is the country’s legislative capital.

With a population of 4,488,545 or 1835 people per km² (as of 2019), it has 1,316,712 households of which 19.3% are informal.

The City of Cape Town contributes R287 billion to the national economy. This said, poverty levels are high with 45.9% of the population living on less than R1,227 per month, while 9.3% receive social grants, the SoCR stated.

Positively a high number of households have access to electricity (98.6%), basic sanitation (92.4%), basic water supply (95.9%) and weekly municipal refuse removal (89.7%).

In the City of Cape Town, R40.5 billion in revenue was generated, while 91% of its total budget was spent.

eThekwini

eThekwini has a population of 3,890,001 who occupy 1,188,068 homes. Among the employed, 9.4% are in business while 62.3% receive salaries, wages or commissions.

The report shows that 14.6% rely on a social income grant, and over 1-million people live on less than R547 per month.

Positively, eThekwini contributes R272 billion to the national economy. 98.2% of its over 1-million homes have electricity access, 83.6% have basic sanitation, 91.8% have a basic water supply while 81.4% of households receive weekly municipal refuse removal.

The city generated R34.8 billion in revenue and it spent 100% of its budget.

Read: South Africa’s municipalities on the brink of collapse: report