Ramaphosa says structural reform critical in responding to jobs crisis

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President Cyril Ramaphosa.
President Cyril Ramaphosa.
GCIS
  • Ramaphosa says cabinet is in the process of finalising a programme for a return to growth and rebound in employment.
  • The president said the implementation of the Presidential Employment Stimulus plan will soon commence to support job protection in vulnerable sectors.
  • Employment figures released by Statistics South Africa reflect the largest decline in jobs between the second and first quarters since 2008. 


President Cyril Ramaphosa says Tuesday's unemployment data, which showed that 2.2 million jobs were lost in the second quarter of the year, calls for additional measures to support SA's ailing economy which has been battered by the Covid-19 lockdown.

Employment figures released by Statistics South Africa on Tuesday reflected the largest decline in jobs between the second and first quarters since 2008. 

The president said cabinet was in the process of finalising a programme for a return to growth and a rebound in employment, following agreements with social partners at the National Economic Development and Labour Council.

"Our success in responding to this unprecedented crisis will be measured by the speed of our labour market recovery," said Ramaphosa in a statement.

"In addition to the relief measures we have already implemented, we must ensure that every job lost during the crisis is replaced and that more jobs are created so that we can meaningfully reduce unemployment."

The latest unemployment figures are set to pile more pressure on Ramaphosa's "new dawn" philosophy he has been preaching since he took office in February 2018. 

In April, as SA's strict lockdown was underway, Ramaphosa unveiled a R500 billion stimulus plan in a bid cushion the economy from the shocks of the Covid-19 pandemic, as well as to provide temporary relief measures for the unemployed.

"Implementation of the Presidential Employment Stimulus will soon commence to rapidly scale up public and social employment and support job protection in vulnerable sectors," he said. 

Structural reforms, investment in infrastructure and other measures to grow the economy would be critical in supporting the recovery of the labour market in the medium term, he said. 

According to Stats SA, the country's official unemployment during the second quarter paradoxically fell substantially, decreasing by 2.8 million to 4.3 million, which it attributed to a large number of people not actively looking for jobs because of the lockdown. The official employment rate is now 23.3%, compared to the first quarter's 30.1%. "Needless to say, the fall in unemployment is not a true reflection of the current labour market conditions, but rather a technical issue in the definition of official unemployment," noted Siphamandla Mkhwanazi, senior economist at FNB. 

The expanded unemployment rate, which includes discouraged job seekers, on the other hand, rose to 42%. 

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