One of the biggest factors impeding South Africa’s socio-economic standing is its alarmingly high and worsening unemployment crisis.
Every province in the country has seen its official employment statistics nosedive over the past three decades.
The latest data from Stats SA puts South Africa’s official unemployment rate at an alarming 33.5% for Q2 of 2024 – up from the 20% recorded in 1994 and 21.5% in 2008.
However, analysts emphasise that the 33.5% does not paint a full picture of South Africa’s unemployment woes because it does not count those who have given up on finding work and dropped off the grid.
The expanded unemployment rate, which shows that around 42.6% [Q2 2024] of South Africa’s working-age population is unemployed, would provide a more accurate assessment.
Youth aged 15-24 and 25-34 continue to have the highest unemployment rates, at 60.8% and 41.7%, respectively.
Thus, extrapolating the figures onto data from the World Bank, South Africa has the second highest unemployment rate in the world, placing second only to Eswatini.
South Africa’s labour market has expanded and transformed over the three decades, growing from 11.3 million in 1994 to 28.3 million in 2023.
Although the labour force has grown, “employment gains have, however, been insufficient to offset the commensurate increases in unemployment,” said the South African government.
Economists warn that these figures are a ticking timebomb, threatening social stability and indicating to investors that the economy is not growing near the population’s pace to create sustainable jobs.
While inclusive growth and job creation have been listed as a strategic priority of South Africa’s newly established Government of National Unity – a recent review by the Bureau for Economic Research (BER) puts into context that much work needs to be done to reverse systemic unemployment woes.
Looking at the comparisons outlined by the BER, when South Africa transitioned into a democracy in 1994, there were 10.67 million South Africans who were not economically active, 1.7 million unemployed and 11.50 million employed.
With around 20 million more people in the country since then (according to StatsSA data), this has since grown to 16.41 million being not economically active (+52.76%), 8.4 million being unemployed (+394.11%), 16.7 million employed (+45.21%).
Looking at this more closely, the official unemployment rates across the country’s nine provinces have seen notable increases over the past 30 years.
In some provinces unemployment has doubled – in others, they have quadrupled .
In context, provinces like the Eastern Cape and Limpopo, which had the highest unemployment rates in 2024, saw ‘smaller’ jumps over the past three decades, coming off an already high base.
Gauteng and the Western Cape, which had much lower unemployment rates in 1994, saw massive increases in unemployment, thanks to the low base and migration patterns.
| Province | Unemployment rate (1994) |
Unemployment rate (Q2 2024) |
Change | % Change |
| Eastern Cape | 26% | 41.0% | +15.0 pp | 58% |
| North West | 13% | 41.3% | +28.3 pp | 218% |
| Mpumalanga | 12% | 37.4% | +25.4 pp | 212% |
| Free State | 12% | 37.6% | +25.6 pp | 213% |
| Gauteng | 8% | 35.1% | +27.1 pp | 339% |
| Limpopo | 20% | 31.4% | +11.4 pp | 57% |
| KwaZulu-Natal | 19% | 31.1% | +12.1 pp | 64% |
| Northern Cape | 12% | 32.0% | +20.0 pp | 167% |
| Western Cape | 5% | 22.2% | +17.2 pp | 344% |
“Higher unemployment in more rural provinces, like the Eastern Cape, in large part explains why many people move to the cities to find work,” said the BER.
Chief economist at Investec, Annabel Bishop, unpacked South Africa’s employment figures, citing a lacklustre economic performance as a key reason why the country finds itself in the situation that it is in today.
“Indeed, from 2004 to 2007, rapid economic growth of over 5% on average occurred in South Africa, and business confidence reached historic highs, which boosted investor confidence,” said Bishop.
“Personal and corporate income tax cuts stimulated investment and job creation in the 2000s, while red tape and the compliance cost for small business were cut, which improved the ease of doing business in the country.”
However, by the 2020s, “South Africa had come from over a decade of state capture, weak governance and consequent poor economic performance, which has seen the unemployment rate climb,” explained the Investec chief economist.
At the 2024 Opening of Parliament address by President Cyril Ramaphosa, the president cited South Africa’s relatively muted economy, which has not expanded nearly as fast enough as the population, as the key reason for the unemployment crisis.
“Our experience over the past 30 years has shown that when our economy grows, jobs are created. When our economy contracts, there is no job creation, and jobs are lost,” said Ramaphosa.
“For unemployment to reduce to below 30%, GDP growth must be above 5%,” the government said in its 30-year review report.
Chief economist of the Efficient group, Dawie Roodt, told BusinessTech that a turnaround needs to happen with haste as persisitently high unemployment figures indicates an unsuccessful economy that is unable to grow as fast as the population, putting a massive dampener on investment.
To get lower unemployment levels, Roodt said that we need to get the economy to grow through three key measures, which he says broadly are:
- The protection of private property rights;
- Promotion of free trade;
- Low inflation.
Although Roodt does not think a huge turnaround in this regard will happen—because the economic policy positions of the dominant ANC in the coalition are unlikely to change significantly—he does expect improved efficiency, which should bode well for the economy.
Research from the BER said that a committed pursuit of Operation Vulindlela (fast-tracking structural reforms to bring the private sector on board) and a general dedication from all stakeholders to lowering costs and increasing the ease of doing business in South Africa would improve competitiveness and ultimately boost economic performance.
The complex nature of unemployment
Professor of Economics and Pro Vice-Chancellor: Climate, Sustainability and Inequality at the University of the Witwatersrand, Imraan Valodia explained that the key issues in South Africa’s labour market are multifaceted.
On top of a lacklustre economy, some are global factors (such as changing employment patterns and global shocks), and some specific to South Africa (such as the legacy left by the country’s apartheid past) have entrenched such woes.
Looking specifically at South Africa, Valodia said that apartheid’s legacy distorted the labour system by excluding Black women from the workforce and labelling them “economically inactive.”
Additionally, the systemic suppression of Black entrepreneurship and economic activity during apartheid worsened unemployment. Post-apartheid, their inclusion in the labour force inflated the unemployment rate.
Despite growth in employment, the labour force is expanding faster, highlighting ongoing challenges in South Africa’s job market.
Read: South Africa’s unemployment rate ticks higher
