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Civil unrest aftermath: KZN, Gauteng lose the most jobs

Johannesburg Civil unrest aftermath – The R50 billion economic destruction left by civil unrest and looting of businesses in July will have a lingering impact on South Africa’s prospects to reduce its unemployment rate, especially in the country’s economic hubs.

The violent unrest found an already fertile ground to worsen the country’s jobless rate as economic activity was beset by supply-chain disruptions, lockdown restrictions, and an energy crisis.

As a result, it was not shocking when Statistics South Africa (StatsSA) earlier this week revealed that the unemployment rate increased to a 13-year high in the three months to September, mainly due to the unrest.

The Quarterly Labour Force Survey (QLFS) showed that the jobless rate has risen by 0.5 percent, from 34.4 percent to 34.9 percent.

StatsSA said 660 000 people lost their jobs in the third quarter following another decline of 54 000 in employment the previous quarter.

This was the fourth decrease in employment since the Covid-19 national lockdown in March 2020.

StatsSA said most job losses were experienced in Gauteng, KwaZulu-Natal, where the unrest was concentrated, and in the Western Cape as well.

Gauteng alone experienced 200 092 job losses, followed by KZN at 123 410, showing how destructive the wave of the unrest had been in the two provinces as some companies went out of business.

The Don Consultancy Group (DCG) chief economist Chifi Mhango said the damage to the economy from the July 2021 unrest, electricity crisis and industrial strikes will exert more pressure on the government’s job creation and retention initiatives.

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“It is deeply concerning that key sectors such as manufacturing, construction and the mining sector are not creating the much needed jobs despite government incentives and supporting policy environment,” Mhango said.

“To stimulate job creation and retention, the government should embark on increasing its fixed investment share to GDP from the current low levels of below 20 percent, diversify its export basket towards value added products, and expand the market footprint for its value added products across the African continent.”

The expanded definition of unemployment, including people who have stopped looking for work, rose by 2.2 percent to 46.6 percent, up from 44.4 percent in the second quarter.

This means that 12.48 million people are now unemployed according to the expanded definition of unemployment.

StatsSA said the youth aged 15-24 years and 25-34 years recorded the highest unemployment rates of 66.5 percent and 43.8 percent, respectively.

Approximately 3.4 million out of 10.2 million young people aged 15-24 years were not in employment, education or training (NEET), a year-on-year increase of 1.6 percentage points.

With economic activity now expected to slow due to the discovery of the new Covid-19 variant Omicron, economists expect some form of lockdown restrictions until deep into 2022 based on current low levels of vaccination.

“Consequently, the unemployment data are likely to deteriorate further in the fourth quarter,” said Casey Delport, investment analyst at Anchor Capital.

Much, however, will depend on the trajectory of the incoming fourth wave of the pandemic, and the implementation by the government of any further loCKdown restrictions etc. over the festive season.

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