President Cyril Ramaphosa has urged all South Africans to work towards a speedy economic recovery. This plea came after 2.2 million jobs were lost nationwide in the second quarter of 2020.
The president responded to the data released by Stats SA, which revealed that the country’s unemployment rate fell to 23.3% in the second quarter from 30.1% in the first quarter due to fewer people ‘looking’ for work amid the nation’s strict coronavirus lockdown.
But, chief economist at Investec, Annabel Bishop, stated estimates showed that the actual unemployment rate would have been well over 45% had Stats SA not classified the job losses otherwise.
Speaking on the VOC Breakfast show, Head of Research at Kagiso Asset Management, Abdul Aziz Davids said the reliability of the statistics needs to be questioned.
“Due to the fact that we’re under a lockdown the way these surveys were conducted is very different to how it usually happens and also the amount of people that were questioned was a much smaller amount and we have to take that into consideration,” said Davids.
“I think the more important number is the 5.6 million people who were discouraged from looking for work and that clearly impacted the numbers quite significantly,” added Davids.
Ramaphosa said South Africa’s triumph in response to the crisis will be measured by the speed of its labour market recovery.
“The one disappointment has been the lack of decisive action around either the job creation or government programs around infrastructure that could really assist the economy especially in terms of the labor market,” explained Davids.
The president also added that citizens must ensure that every single job lost during the global pandemic was replaced and that more jobs were created so the country could meaningfully reduce unemployment.
He also gave an assurance that Cabinet was in the process of finalizing a programme for a return to growth and a rebound in employment.
Davids questioned the benefit that social grants had for the future.
“Ideally social grants like the TERS payment should be linked to some sort of job creation and that too will ensure it is much more enduring because what happens when these grants come to and end,” asked Davids.
However, ending on a positive note, Davids explained the country does have an age advantage.
“We have what is called a demographic dividend and what that means is our percentage that is able and active and ready to work is one of the highest in the world. Most developed countries have aging populations, whereas we have a much younger population and skills are a concern but that can be taught through training and education,” added Davids.