South African Chamber of Commerce and Industry chief executive officer, Alan Mukoki, has warned that the country’s unemployment rate could climb as high as 50% in line with the National Treasury’s worst prediction.<\/p>\n
Treasury said that more than 2.5 million jobs could be cut as a result of the coronavirus pandemic, with wages and salaries expected to fall by as much as 30%.<\/p>\n
While these numbers are severe, Mukoki said that jobs would be sacrificed so businesses could stay afloat.<\/p>\n
\u201cEmployers have cash-flow problems. Some lucky businesses will make it through this, but it will be at the cost of their workforce.<\/p>\n
“The prospect of having the unemployment rate climb to 50% is not out of line,” he told the Sunday Times<\/a><\/strong>.<\/p>\n \u201cWhat we are seeing is that businesses will not borrow money and get into debt to pay staff when they can simply be laid off and made the burden of the Unemployment Insurance Fund.<\/p>\n \u201cMost staff are not indispensable so you can get rid of them and maintain the business when it needs to be reactivated in six months\u2019 time, or whenever the economy can reopen properly.\u201d<\/p>\n