South African jobless rate could hit 38.1%, businesses tell Ramaphosa
South African business leaders told President Cyril Ramaphosa that the jobless rate could rise to 38.1% by 2030 without urgent action to solve the country’s energy, logistics and crime crises.
The forecast, which compares with a current unemployment rate of 32.9%, was included in a presentation made by business groups in a meeting with Ramaphosa on Tuesday. It was based on an average economic growth rate of 0.75% if no progress is made on those three impediments.
Unemployment in South Africa is already among the highest of more than 80 nations tracked by Bloomberg.
South African business groups are working with the government to try and arrest the slump in energy provision and the deteriorating rail and port services. Those issues, coupled with rampant crime and corruption, are crimping growth in the continent’s most industrialized economy.
If the constraints were successfully addressed the business groups, collectively known as B4SA, forecast economic expansion would average 5% and unemployment would decline to 28% by 2030.
In a 23-slide presentation sent to Bloomberg, more than 115 businesses operating in South Africa listed a host of measures Ramaphosa will need to address to kick-start the stagnating economy.
The presidency, together with B4SA and Business Unity South Africa, in a joint statement Tuesday announced progress made in introducing some of the initiatives to revive the floundering economy and restore investor confidence.
The measures include:
- Technical support from business on optimizing the diesel supply chain at the Ankerlig power station
- Supporting the return of additional units at the Kusile power plant and four key stations and helping their managers with turnaround plans at those facilities
- Business technical teams working through the National Energy Crisis Committee to assist in planning for efficient grid access and expansion. All these interventions aim to recover about 5.4 gigawatts over the next year
- Setting up four so-called corridor recovery teams to focus on constraints in commodity-export supply chains in coal, iron ore, manganese, chrome and magnetite
- Creating a joint initiative against crime and corruption, with senior representatives from law-enforcement agencies and business
- Setting up a special purpose vehicle for establishing digital and data forensic capabilities for the nation’s prosecuting authority on an arm’s length basis
- Initiatives to support the police to aid crime detection and response
