Cabinet hard at work to grow economy, create jobs

Thursday, June 10, 2021

Acting Minister in the Presidency Khumbudzo Ntshavheni says government continues to work hard to ensure that the economy retains jobs and creates new ones.

Addressing a post Cabinet briefing on Thursday, Ntshavheni said the executive had noted with concern the results of the Quarterly Labour Force Survey, which revealed that the country’s unemployment rate had reached 32.6% in the first three months of 2021.

During the period, the number of those employed remained almost unchanged at 15 million, with a slight decrease of 28 000.

In the first quarter of 2021, the number of unemployed persons also remained almost unchanged at 7.2 million, compared to the fourth quarter of 2020, increasing by 8 000.

The survey revealed that the number of discouraged work seekers increased by 201 000, which was a 6.9% difference between the two quarters. This was a net increase of 164 000 in the not economically active population.

“These minor changes resulted in the official unemployment rate increasing by 0.1% from 32.5% in the fourth quarter of 2020, to 32.6% in the first quarter of 2021, the highest since the start of the QLFS in 2008,” said Ntshavheni.

She said Cabinet was concerned by the youth unemployment rate of 46.3% in the quarter.

“The rate was 9.3% among university graduates, which is a worrying factor,” she said.

During this period, formal employment increased by 79 000.

While the other sectors experienced declines in employment in quarter one of 2021, the informal sector employment decreased by 19 000 or 0.8%.

Private households decreased by 70 000 (or 5.8%) and employment in agriculture decreased by 18 000 (or 2.2%).

Some industries have created jobs, while others lost jobs between quarter four of 2020 and quarter one of 2021, resulting in a net decline of 28 000

Cabinet, she said, in its meeting also noted that the economy grew by one point 1% in the first quarter of 2021, translating into an annualized growth rate of 4.6%.

This follows a revised 1.4% or annualized at 5.8% rise in the real GDP in the fourth quarter of 2021. The growth in the GDP was also on the back of the decline in employment.

Ntshavheni said Cabinet and government were committed to make sure that the growth of the country’s economy is matched by the growth or sustenance of employment in the country.

She said despite this being the third consecutive quarter of positive growth, the South African ecGDP economy is 2.7% smaller than it was in the first quarter of 2020 when the COVID-19 descended on the country.