SA unemployment hit record high – before Covid-19 hit

South Africa’s unemployment rate hit a record high in the first quarter of this year as key sectors including agriculture shed jobs, data showed on Tuesday, highlighting weakness in the economy even before it was battered by the Covid-19 pandemic.

The economy was already in recession before the pandemic hit. Authorities imposed a strict lockdown at the end of March, further squeezing businesses and consumers.

The unemployment rate of 30.1% was up from 29.1% in the final quarter of last year, Statistics South Africa said in its quarterly labour force survey. “This is the first time ever that we have hit the 30% mark,” statistician-general Risenga Maluleke said.

There were 7.1 million people without jobs in the first quarter, up from 6.7 million in the previous quarter, Statistics South Africa said. Under the expanded definition of unemployment, which includes people who have stopped looking for work, the rate was 39.7% compared with 38.7% in the previous quarter.

The outlook for the labour market remains gloomy, with some of the country’s big firms such as steel producer ArcelorMittal South Africa, food producer Tiger Brands and telecommunications operator Cell C already announcing plans to cut jobs.

With no significant government support offered during the lockdown to the informal, or unregulated, sector — which according to the World Bank provides employment to 25% to 30% of South African workers — the impact has been severe for many.  — Reported by Olivia Kumwenda-Mtambo, (c) 2020 Reuters