South Africa’s unemployment rate fell in the three months after the formation of a coalition government that has boosted business confidence and led to hopes for more progress on economic reform, data showed on Tuesday.
The official unemployment rate fell to 32.1% in the third quarter of 2024, from 33.5% in the second quarter, the first time the official rate had fallen in a year, Statistics South Africa figures showed.
The coalition government was formed in June after the African National Congress lost its parliamentary majority for the first time in 30 years, pushing it into a broad alliance with the market-friendly Democratic Alliance and other smaller parties.
Investor optimism over the coalition fuelled a rally in the country’s rand currency and local-currency debt.
Africa’s largest and most industrialised economy has for years struggled with high unemployment, with women and youth being disproportionately affected.
READ ALSO: Nigeria’s unemployment rate increased to 4.2% in Q2 2023- NBS
The number of employed people increased by 294,000 during the quarter, according to Statistics South Africa’s Quarterly Labour Force Survey, while the number of unemployed individuals decreased by 373,000.
Jobs were added in the community and social services sector, as well as in construction, trade, mining, and transport.
This marks the first decrease in joblessness since the third quarter of 2023, when the country’s unemployment rate stood at 31.9 per cent.
Youth unemployment remains particularly high, although it decreased from 46.6 per cent in the second quarter of 2024 to 45.5 per cent in the third quarter.
South Africa’s economy faces structural challenges and weak growth, according to the World Bank. This limits the government’s ability to address inequality—among the highest in the world—and poverty, which affects more than 60 per cent of the population.
Statistician-General Risenga Maluleke told a press conference that the long-term unemployment rate had risen more than 10 percentage points in the last decade, rooted in a mismatch between people’s skills and the jobs on offer.
Under an expanded definition of unemployment, which includes those discouraged from seeking work, 41.9% of the labour force was jobless in the third quarter, down from 42.6% in the second.
Reuters.com
