To effectively address chronic unemployment, South Africa must pivot from ineffective public sector job schemes to empowering private sector growth.
Image: Oupa Mokoena/Independent Newspapers
Instead of focusing on short-term public sector job creation, South Africa urgently needs to prioritise private sector-driven growth, according to the Foundation for Rights of Expression and Equality (Free SA).
South Africa’s latest Quarterly Labour Force Survey (QLFS) for Q4 2024 showed that the official unemployment rate declined from 32.1% to 31.9%
However, the unemployment rate in SA remains alarmingly high at 31.9%, in comparison to the global average of just 5%. SA consistently ranks among the top five nations with the highest unemployment rates in the world.
While Free SA welcomes any progress in tackling unemployment, this slight improvement does not change the fundamental crisis that continues to plague the country’s labour market.
According to Free SA, the SA government is overly reliant on public sector employment and state-led job schemes, however, these approaches have a high cost for taxpayers and do little to drive real economic expansion.
In comparison, the private sector already employs 73.3% of SA’s workforce, however, its ability to create jobs is consistently blocked by restrictive regulations, policy uncertainty, and failing infrastructure, it said.
The key to decreasing the unemployment sustainably is to create an economic environment where businesses especially small and medium enterprises (SMEs) can thrive without excessive government intervention.
Lessons from global success stories, such as Singapore and South Korea, show that countries that give importance to private sector job creation over government dependency achieve long-term prosperity.
Speaking on the employment figures, Reuben Coetzer, spokesperson, Free SA, said: "South Africa leads the world in only two things: the rolling maul and youth unemployment. But unlike the rolling maul, youth unemployment has no try-line, no victory, only an ever-expanding scoreboard of despair with each quarterly report.
"While any reduction in unemployment is welcome, South Africa cannot afford to celebrate small gains while ignoring the bigger picture. A 31.9% unemployment rate remains a national emergency far above the global average of 5%."
Government needs to make a decisive shift towards enabling the private sector, rather than hampering it.
If the country continues down its current trajectory of excessive state control and intervention, the economic stagnation will only deepen.
Now is the time for bold reforms that prioritise job creation through enterprise, not government dependency, he said.
The persistent unemployment crisis in SA is not due to a lack of government intervention, it is the result of too much, according to Free SA.
Growing the public sector workforce without addressing inefficiencies, corruption, and excessive government spending only worsens SA's economic predicament.
Free SA said government should focus on creating a business-friendly climate by:
- Cutting out the red tape and policy uncertainty that deters investment
- Reforming restrictive labour laws that discourage hiring
- Better infrastructure to support business expansion
- Encouraging entrepreneurship and innovation
- Ensuring fair competition by tackling corruption and political interference.
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