Govt Reaffirms Commitment to Job Creation as Unemployment and Inflation Figures Rise

The unemployment rate rose by 0.6 percentage points from the 32.9% recorded in the previous quarter.

South African Minister in the Presidency Khumbudzo Ntshavheni has reiterated the government's commitment to fostering an inclusive economy that generates employment opportunities. This affirmation comes amidst the backdrop of rising unemployment and inflation rates.

Steady Manufacturing Growth and Unemployment Challenges

During a Post-Cabinet briefing, Minister Ntshavheni highlighted that despite a troubling increase in the official unemployment rate to 33.5% in the second quarter of 2024, there is optimism in the manufacturing sector's steady growth. The unemployment rate rose by 0.6 percentage points from the 32.9% recorded in the previous quarter.

The second quarter of 2024 saw a decrease of 92,000 in employment, bringing the total number of employed individuals to 16.7 million. Concurrently, the number of unemployed persons increased by 158,000 to 8.4 million. Analysis by industry showed declines in employment across sectors such as Trade (110,000), Agriculture (45,000), and Private Households (18,000), while significant increases were observed in Manufacturing (49,000) and Community and Social Services (36,000).

“The steady growth in manufacturing is a confidence booster for building a production economy. Government remains focused on its top priority of creating an inclusive economy that generates jobs,” Ntshavheni stated.

Inflation Trends

In addition to unemployment concerns, Cabinet noted a drop in the annual consumer price inflation (CPI) to 4.6% in July 2024, down from 5.1% in June. The month-on-month CPI increased by 0.4% in July. The main contributors to the 4.6% annual inflation rate included:

• Housing and Duties: Increased by 5.3% year-on-year, contributing 1.3 percentage points.
• Miscellaneous Goods and Services: Increased by 7.0% year-on-year, contributing 1.0 percentage point.
• Food and Non-Alcoholic Beverages: Increased by 4.5% year-on-year, contributing 0.8 percentage point.
• Transport: Increased by 4.2% year-on-year, contributing 0.6 percentage point.

In July 2024, the inflation rate for goods was 4.6%, down from 5.5% in June, while services inflation rose to 4.7% from 4.6% in the previous month.

School Nutrition Programme Modernization

Cabinet also addressed the modernization strategy for the National School Nutrition Programme (NSNP), which supports 9.7 million learners daily. Minister Ntshavheni affirmed Cabinet's support for ensuring thorough due diligence on the proposed approach to safeguard the interests of the beneficiaries.

Recent discussions within the Department of Basic Education (DBE) have clarified misinformation regarding the NSNP tender. Director-General Mathanzima Mweli refuted claims from a recent article alleging that the DBE had halted a R10 billion school food tender. Mweli emphasized that the tender was published on 22 July 2024 after the new administration had taken office, refuting claims of surreptitious publication or lack of ministerial oversight.

As South Africa navigates these economic challenges, the government's focus remains on building a robust and inclusive economy through strategic initiatives and continued support for key sectors.