Experts warn South Africa’s record unemploymet is a ‘time bomb’

As South Africa grapples with a record unemployment rate of nearly 33%, the United Nations and other experts have warned that this is a “time bomb” that has the potential to cause political instability.

More than half of the country’s young people are jobless resulting in rising levels of poverty, and inequality and fuelling social ills like crime and drug use among young people in sub-Saharan Africa’s most developed economy.

The country has been urged to make urgent interventions to transform its economy to avoid the unemployment rate reaching nearly 40% by 2030.

From the capital Pretoria to the far east of Johannesburg, qualified graduates are doing menial jobs while others have resorted to recycling to earn a living in a country that has shed more than 2 million jobs since the COVID-19 pandemic.

The pandemic didn’t cause Themba Khumalo’s problems.

He lost his job as a machine operator in 2017 and now tries to support his wife and two children by collecting metal and plastic containers anywhere he can find them to sell in bulk for recycling.

“We’ll have to run away now and go to other countries with our qualifications, with whatever skills we have because our government doesn’t even acknowledge university students in terms of their future,” Khumalo said as he crushed some metal cans with his worn out work boots in the backyard of his home on the outskirts of Johannesburg.

He shakes his head at how insufficient the $18 a month he gets as an unemployment benefit is.

His one bright note is that neighbours often leave empty food cans outside his house to help.

“At the end of the day, the graduates come back home and sit doing nothing in the township. I blame the government,” said Khumalo.

In addition to South Africa’s electricity crisis, which has resulted in daily power blackouts, unemployment has already emerged as a key election issue that political parties will have to confront when they campaign for the 2024 general elections.

In Pretoria, 26-year-old Lebohang Mphuthi is working as a student assistant at a public school, four years after graduating with a diploma in analytical chemistry.

It’s the only job she has found and her responsibilities involve watching over the kids at lunchtime and helping teachers during classes.

“You try to change your CV, you use this one, the design, you change it, you use this one, you change your duties and all that. Yes, I applied for several of them (positions). And then last year, that is when I applied for the teacher assistant post,” she says.

In a South African context, Mputhi might be considered lucky with the $265 she earns per month.

Analysts say the official unemployment number doesn’t even count those who have given up on finding work and dropped off the grid and that a more accurate assessment would be that nearly 42% of South Africa’s working-age population is unemployed.

South Africa has the highest unemployment rate in the world, according to the World Bank, outstripping Gaza and the West Bank, Djibouti and Kosovo.

When it comes to youth unemployment, the rate is 61% of 15- to 24-year-olds, according to official statistics, and a staggering 71% if you again count those who are no longer trying.

One of the government’s policies to combat unemployment is helping young entrepreneurs start businesses.

Pearl Pillay of the Youth Lab think-tank that focuses on improving opportunities for young people said new businesses aren’t surviving, or even getting off the ground, and it’s not working.

“You have this boom of new young people entering the labour market. Now, unfortunately, because we don’t have an economy that grows, there’s no way to absorb all of those young people,” Pillay said.

“We also then live within an economic environment that doesn’t adequately support entrepreneurship. So Africa is one of the most difficult places to do business in.”

South Africa’s unemployment had risen steadily over the last two decades before the COVID-19 pandemic stripped another 2 million jobs away in the blink of an eye.

There’s clear desperation, like when the premier of the economic hub province of Gauteng committed to hiring 6,000 unemployed young people in new jobs.

More than 40,000 stood out in the winter cold to queue to apply, more than 30,000 set to be rejected.

Warning of the South African “time bomb” over unemployment, the U.N. referred specifically to a week in 2021 when riots and looting left more than 350 people dead in the country’s worst violence since the last days of apartheid.

South Africa’s GDP needs to grow by 6% a year to start creating enough jobs just for the 700,000 people who enter the workforce every year, according to Duma Gqubule, a financial analyst who has advised the South African government.

South Africa’s growth hasn’t approached that much-needed figure for more than a decade.

Its economy — which grew by 2% last year — is expected to grow by less than 1% this year and between 1% and 2% for the next five years.