Last Thursday Statistics SA, the official data agency, reported that unemployment had risen to 32,5% in the last quarter of 2020 – a shocking number that should serve as a reminder of the risks to our stability.
In the same report, Stats SA says as many as 42.6% South Africans of working age – including those who have given up looking for work – are without work, and, as expected, black Africans are worst affected by the scourge of unemployment. More concerning, over 60% of youth – aged between 18 and 24 years, who could work – are not working and, of these, nearly 30% of young people were not in employment, education or training.
To contextualise the significance of the numbers, the country had just been moved to alert level 1 – meaning that a semblance of normality was returning as most restrictions were removed to allow most workers to return to work and tourist establishments to reopen.
Put differently, the numbers show that the Covid-19 lockdown merely worsened SA’s economic problems especially unemployment, inequality and poverty. Before lockdown, our unemployment was among the highest in the world – at 29% when narrowly defined – and above 50% among the youth.
The question that faces us now is, what needs to be done?
Well, a few things need to happen. Chief among these is the task of defeating the coronavirus pandemic to save lives and livelihoods. On Sunday night, President Cyril Ramaphosa moved the country back to alert level 1 from alert level 3 (a harder lockdown with more restrictions to movement of people and economic activity). The move was prompted by the considerable decline in rates of infection and fatalities (even as low as under 100 deaths on certain days).
Although the move might have come a week or so late, it is to be welcomed. After all, as has been argued in this column before, lockdowns are not a durable solution to the pandemic. We need other tools. A key part of this new arsenal of defeating the virus is a speedy rollout of the vaccine to achieve population immunity. The government now needs to accelerate both the rollout of the vaccine and the acquisition of more supplies to contain the virus.
As we have learnt, the virus is not relenting and it is mutating fast with new deadlier variants.
Simultaneously, we have to move with speed in implementing the necessary measures to address the long-standing problems of our country, primarily unemployment. During the harder levels of lockdown last year, as many as almost 20m South Africans were receiving a social grant of sorts from the state. This is commendable in fighting hunger. But it is not sustainable in the long term.
With dwindling tax revenues, funding of social grants will become unaffordable. We need to urgently turn most of the social grant earners – save for the elderly – into wage earners and job creators.
To this end, we have plenty of plans. We don’t need new ones. What is missing is implementation. A number of them are long overdue.
First, we need to urgently get the infrastructure investment programme – for social and economic infrastructure (energy, water, telecommunications, transport and ports) – under way. This is the quickest way of investing our way out of joblessness.
Second, we need to speed up reforms to address the energy insecurity facing our country – new and alternative suppliers of electricity (renewables, solar, gas and so on) have to be added onto the power grid.
And third, we have to unleash the power of this economy (households and firms) by releasing the long-delayed high demand broadband spectrum.
A critical part of achieving these goals is having a capable state. As Ramaphosa said on Monday, “only a capable, efficient, ethical and development-oriented state can deliver on the commitment to improve the lives of the people of this country”.
At a political level, we now have published performance agreements with ministers. Ultimately, it is up to all citizens to hold those in power to account. Otherwise, we run the risk of unemployment upending social stability.
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