South Africa’s unemployment rate jumped to its highest since the global financial crisis more than a decade ago, data showed on Tuesday, piling pressure on a shrinking economy and President Cyril Ramaphosa’s pledge to deliver a turnaround.
Last week two ratings firms warned of the impact on an already dire economic growth outlook of the recent 59 billion rands (4.15 billion U.S. dollars) bailout for state power firm Eskom, sending the rand tumbling and raising the price of debt.
That added to pressure coming from Ramaphosa’s political battles with factions inside the ruling African National Congress (ANC), further dimming growth prospects in the continent’s most industrialized economy.
Cyril Ramaphosa was sworn in as South African president in February 2018. /VCG Photo
Second quarter unemployment rose to 29 percent in the second quarter from 27.6 percent in the first quarter, driven by employment losses in private households, transport and mining, data from Statistics South Africa showed.
It was the highest jobless rate since 2008 when the quarterly survey started, statistician general Risenga Maluleke said at a press briefing, adding that it would be difficult to create jobs in a shrinking economy.
There were 6.7 million people without jobs in the three months to the end of June, compared with 6.2 million people in the prior quarter, Statistics South Africa said in its quarterly labor force survey.
Despite the pressure on Ramaphosa to turn around the economy, Chinese Ambassador to South Africa Lin Songtian told Reuters that the president was "the last hope of this country."
Lin told Reuters that while China was willing to invest in South Africa, the country needed to do more to offer favorable investment conditions and provide feasibility studies on infrastructure projects.
“To date there are no major infrastructure projects from China here [in South Africa]. Why? Because we don’t only need the concept of a project,” Lin said.
South Africa’s economy contracted by 3.2 percent in the first three months of the year as nationwide power outages implemented by cash-strapped Eskom triggered a broad contraction across sectors.