South Africa has 11.5 million unemployed adults, 7.6 million of whom are willing and willing to work. But the rest (3.9 million) have lost hope of ever finding work.
A PwC report entitled South Africa Economic Outlook In response to higher inflation and rising interest rates, said the unemployment rates and hopelessness among millions of job seekers are a concern for business leaders.
“This is a major concern: 73% of South African respondents to PwC’s 25th Annual Global CEO Survey are very or extremely concerned about social inequalities (including those due to gender, race, ethnicity, wealth, etc.) negatively impact their business over the next 12 months,” the report said.
South Africa’s skills are among the lowest in the world
The WEF Global Competitiveness Report 2019 ranks South Africa 101st out of 141 countries in terms of skills of its current workforce.
“This tells us that although the country’s education system produces hundreds of thousands of high school students every year, their skills are not competitive in a global context,” the report states.
The report recommends that after-school education in the private sector will be vital to ensure that local industries are staffed with people who have the know-how to drive economic growth.
PwC reports that while many companies welcomed the government’s list of key occupations as a tool to facilitate the hiring of skilled international workers, it also served as an audit of skills that need to be developed locally – and quickly.
Will retailers be hiring in 2022?
The report warns that growing retail companies must transform their workforces by retraining their workforce.
“The country has a large volume of available labor. For companies looking for staff, this offers opportunities to recruit new employees,” the report said.
According to industry-specific data, about 540,000 people who lost their jobs in the third quarter of 2021 had previously worked in trade sectors.
“Announced store opening plans suggest there will certainly be jobs available in the retail sector,” the report said.
The Pick n Pay Group plans to open 200 new Boxer stores over the next three years.
The Shoprite Group (South Africa’s largest private sector employer) plans to open more of its recently launched, smaller-sized Checkers Foods stores, standalone Medirite pharmacies and Little Me baby stores.
About 20 Spar stores, still closed in the wake of the unrest in July 2021, will reopen this year.
Economic stagnation among the main risk factors
PwC has warned that economic growth will quickly return to its long-term low-growth trend if major structural changes are not implemented.
“As the recovery from the 2020-2021 lockdowns comes to an end, South Africa’s growth rate is slowing again.
We expect real GDP growth of just 1.5% in 2024: this is now the country’s potential growth rate in a normal year based on structural constraints,” the report said.
This will hardly exceed the population growth rate.
South African respondents to the survey underlying the World Economic Forum (WEF) Global Risks Report 2022 cited protracted economic stagnation as one of the country’s top five risks.
“This reflects the fact that too few of the key structural challenges South Africa faced before COVID-19 have been resolved,” the report said.
Load shedding remains a major growth barrier
According to the report, tax shedding remains the country’s biggest growth impediment.
Power outages increased by an estimated 38% last year, with an average load shedding of three hours per day.
“A combination of factors – including tax cuts, social unrest, business uncertainty due to the pace of economic recovery after Covid-19 and many other issues – contributed to a net loss of 742,000 jobs in the first three quarters of 2021. .”
This reduced employment to almost as low as it was during lockdown levels 5 and 4 in Q2 2020.