Great news for jobs in South Africa

Despite fluctuations in quarterly unemployment data, South Africa has gained roughly 200,000 jobs over the past year.

South Africa’s employment landscape has shown significant improvement, with the official unemployment rate declining to 32.1% in the third quarter of 2024—a notable 1.4 percentage-point improvement compared to the previous quarter.

This positive trajectory reflects a year-on-year gain of approximately 200,000 jobs, as the number of employed individuals rose from 16.7 million in Q3 2023 to 16.9 million in Q3 2024, according to Statistics South Africa’s Quarterly Labour Force Survey.

The momentum in job creation, while encouraging, is not just a result of cyclical economic factors but also stems from targeted policy interventions.

Central to these efforts is the second phase of the Government Business Partnership, launched under South Africa’s Government of National Unity in October 2024.

This initiative focuses on addressing structural challenges in key sectors such as energy, logistics, and crime reduction.

According to PwC, if implemented effectively, this partnership could create as many as 470,000 jobs in 2025, pushing the economy toward an estimated growth rate of 3.3%.

The stakes, however, are high.

The success of this ambitious plan depends on immediate and effective reforms, particularly in critical infrastructure and public service delivery.

The Bureau for Economic Research (BER) highlighted the pressing need for investments in energy generation and distribution, efficient logistics networks, and improved water and sanitation systems.

These foundational improvements are seen as prerequisites for sustainable growth and long-term employment creation.

While the prospects for 2025 are promising, risks to the economy remain considerable.

Among the most pressing challenges is the global push for carbon taxation.

The Reserve Bank recently explored the potential impacts of the European Union’s Carbon Border Adjustment Mechanism (CBAM) being extended to all South African exports and possibly adopted by other major economies, such as the United States, Canada, and Japan.

The central bank’s analysis paints a stark picture: under such a scenario, South Africa’s GDP could decline by 9.3% relative to the baseline by 2050, with total exports shrinking by 10.1%.

The job losses would be devastating, potentially reaching 350,000 by mid-century and escalating to 2.6 million if all exports were subjected to CBAM-like regulations.

However, it must be noted that this is the worst-case scenario.

Trade dynamics with the United States also pose a significant threat. President-elect Donald Trump’s proposed tariffs could exacerbate challenges for South Africa’s key export sectors, including manufacturing, motoring, and agriculture.

Allianz Trade, a global trade credit insurer, warns that Trump’s potential trade policies could reduce South African exports to the U.S. by up to $4 billion (R72 billion) over 2025 and 2026.

This would jeopardise hundreds of thousands of jobs, dealing a blow to industries already grappling with local operational challenges.

Despite these looming uncertainties, the recent improvements in employment and the proactive policy measures provide a sense of optimism.

South Africa has demonstrated that it can achieve tangible progress in the face of adversity.

Expert forecasts suggest that continued collaboration between government and business, coupled with strategic investments and reform implementation, could sustain job growth into 2025 and beyond.

However, the path forward requires vigilance. Policymakers must address systemic issues while remaining responsive to external shocks.

The economic headwinds, from global trade shifts to environmental regulations, underline the need for a diversified and resilient economy.

For now, the latest employment figures offer a welcome reprieve and a foundation upon which to build.

With sustained effort and careful planning, South Africa could continue its trajectory toward a more inclusive and prosperous future.

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