Social unrest warning for South Africa

 ·27 Jul 2023

The United Nations Development Programme (UNDP) has warned that South Africa’s youth unemployment rate, which stands at a record high level, is a potential threat to social stability and could lead to social unrest.

The UNDP released its South Africa National Human Development Report for 2022 on Tuesday, which focused on South Africa’s youth employability. 

“Youth unemployment in South Africa is a multipronged challenge that limits the earning potential of youth, stymies business growth, threatens social cohesion, and puts pressure on public resources,” the report said. 

The report, in a nutshell, lays bare the various scenarios that currently describe the worrisome trend of increasing youth unemployment in South Africa.

For instance, unemployment among the youth is currently estimated at 59.6% and 40.5% for those aged 14-24 years and 25-34 years, respectively.

What’s more worrying is that it has become increasingly more difficult to find work in the country, no matter how qualified job seekers are.

According to Stats SA, graduate unemployment has grown from 5.5% in 2013 to 10.6% in 2023. The same trend has emerged for those with other tertiary qualifications – increasing from 11.9% in 2013 to 23.5% in 2023.

“There is no doubt that the high unemployment rate is a ticking time bomb,” noted the UNDP.

South Africa’s youth unemployment against global benchmarks

According to Stats SA, There are more than 10 million young people between the ages of 15 and 24 in the country. However, only 2.5 million of them are currently part of the labour force, meaning they are either employed or actively seeking employment.

Concerningly, out of these 10 million, the majority – 7.7 million or 75.1% – are not employed and are not seeking employment.

The main reason for this is many people become inactive in their job search due to discouragement, which often comes from losing hope of finding a job that matches their skills or is located in their area.

The stats group further noted that 37.% of this 7.7 million were disengaged from the labour market in South Africa – meaning they are not in employment, education or training, a number that has increased substantially over the years.

As a result, the Spectator Index’s 2023 youth unemployment rate report revealed that South Africa has the worst youth unemployment among all 33 included countries.

The following table displays The Spectator Index’s ranking of youth unemployment for 2023, highlighting the significant underperformance of South Africa compared to international standards.

CountryYouth Unemployment
South Africa59.60%
Sri Lanka23.80%
United Kingdom10.50%
United States8.20%
South Korea5.90%

The UNDP also warned that South Africa is at risk of another lost generation through the erosion of skills and human capital that comes with prolonged unemployment. In this regard, weaning youth from dependence on social grants to productive employment and entrepreneurship is critical to addressing this crisis, the report’s authors said.

Financial advisory firm PwC pointed out that unemployment is on an upward trend due to structural constraints that limit growth, particularly load-shedding and deterioration of logistical infrastructure, reported Daily Investor.

These constraints limit potential economic growth in the country, and given the relationship between economic growth and employment, unemployment will rise. 

The accounting firm’s baseline growth rate for South Africa is 1.3% per annum over the long term. 

This is barely above South Africa’s population growth rate of 1% per annum, meaning incomes will remain stagnant in the long term. 

With high inflation, South Africans will be getting poorer in real terms. 

Due to South Africa’s poor economic growth, PwC anticipates the country’s unemployment rate increasing from 32.7% at the end of 2022 to 35.5% in 2030. 

This is the baseline scenario. The downside scenario has the economy growing at a mere 0.9% per annum for the next decade. In this case, unemployment will rise to 37.2% in 2030. 

Even in the upside scenario, PwC sees unemployment rising to above 34% at the end of the decade. 

If South Africa fails to address unemployment, it will face growing social unrest, PwC warned. 

Read: Over 100 businesses pledge to save South Africa from the brink of collapse

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