S.Africa’s unemployment rate rises to 2-year high

South Africa is grappling with a rising unemployment rate, which has reached a staggering 33.5% in the second quarter, up from 32.9% in the previous quarter. The latest figures released by Statistics South Africa reveal that 8.38 million people are now unemployed in the country, painting a grim picture of the economic challenges facing the nation. In a recent discussion on CNBC Africa, experts shed light on the concerning trend and its impact on the youth population. Koketso Mano, FNB Senior Economist, highlighted the structural issues contributing to the persistently high unemployment rate, emphasizing the struggle to absorb new entrants into the workforce. Despite some positive economic movements, the overall growth remains inadequate to create sufficient job opportunities for the growing labor force. The conversation particularly focused on youth unemployment, which, according to Mano, is alarmingly high, with low absorption rates for young people entering the labor market. The long-term unemployment rate, especially among the youth, further compounds the problem, depriving individuals of valuable experience and the chance to contribute meaningfully to the economy. Nkosinathi Mahlangu, Youth Employment Portfolio Head at Momentum Group, echoed these sentiments, highlighting the vulnerable position of black African women in these statistics and the alarming rise of the NEET group (young people not in education, employment, or training) to 35%. The need for urgent interventions from both the public and private sectors to address these challenges was emphasized. While there is optimism surrounding the Government of National Unity's initiatives to stimulate economic growth, experts stress the importance of time and concerted efforts to witness tangible improvements. The liberalization of markets and the promotion of private sector participation are viewed as crucial steps towards creating a conducive environment for job creation and economic development. Despite some positive trends, such as increased entrepreneurial activities in the informal sector, there is a call for greater coordination and support to facilitate growth and overcome barriers to market entry. Additionally, the focus on education quality and relevance, funding accessibility, and addressing cultural barriers, especially for women, are identified as key areas that require attention for sustainable progress. The banking sector, represented by FNB, plays a significant role in supporting small enterprises and young entrepreneurs with funding, aiming to nurture a culture of innovation and self-employment. Collaborative efforts and upskilling opportunities are essential to equip the youth with the necessary skills to meet future job demands and pursue entrepreneurial endeavors successfully. Despite the challenges and frustrations faced in combating youth unemployment, organizations like the Momentum Group Foundation remain committed to advocating for collaboration and skill development to empower young individuals and drive economic growth.