SA faces the risk of a repeat of the July 2021 violence amid high levels of youth unemployment and load-shedding, says the boss of state insurance agency Sasria, joining a growing number of commentators who have warned that the country’s unsolved challenges heighten the risk of another uprising.
“The things that are on my mind are load-shedding, less grid failure but load-shedding ... if it can go on for a sustainable period it would be a worry. The biggest worry is youth unemployment ... the youth are sitting and idling,” Sasria CEO Mpumi Tyikwe said in an interview with Business Day.
The SA Special Risk Insurance Association, or Sasria, which covers losses from civil unrest, was overwhelmed with claims worth more than R30bn from clients affected by the looting frenzy when protests morphed into an outpouring of anger over everything from endemic poverty to unemployment.
Tyikwe’s comments come exactly two years after the unrest that tarnished SA’s image as a friendly emerging market for investor capital and add to a growing chorus of voices about the consequences of youth unemployment.
Also on Thursday, Gauteng co-operative governance and traditional affairs MEC Mzi Khumalo said failure to respond to the unemployment crisis could “lead to a revolution in this country”.
“All hands are needed on deck to address the ill. If we don’t do that, those young people can be ignited,” Khumalo said.
His remarks echo the sentiments of former president Thabo Mbeki in July 2022, when he said inequality and poverty heighten the risk of social unrest comparable to the Arab Spring uprisings.
Recent Stats SA data shows that the number of unemployed rose by 179,000 to 7.9-million due to a number of factors, including economic constraints and low business confidence resulting from persistent power interruptions.
The youth unemployment rate is much worse, having reached 62.1% officially in the first quarter and 71.2% using the expanded definition, which includes people who are available for work but not looking for a job. The data shows the expanded definition of general unemployment stood at 42.4% in the first quarter, down from 42.6% in the fourth quarter.
Khumalo was speaking at a jobs expo in Johannesburg on Thursday, which was attended by employment & labour minister Thulas Nxesi, and EU ambassador to SA Sandra Kramer, who also bemoaned the unemployment crisis in one of Africa’s largest and most diversified economies.
“Unemployment, youth unemployment figures are extremely high,” Kramer said, “and that is bad for the SA economy and society.”
The EU believes a number of interventions could be carried out to “improve that”.
Kramer said a “space” should be created for small and medium-sized enterprises as they have the potential to create job opportunities. These entities, she said, need oxygen to operate sufficiently and contribute to economic growth.
“They do not need red tape.”
The EU wants to be the government’s partner in improving the country’s employment figures, Kramer said.
“The EU is SA’s largest trading partner ... over 45% of foreign direct investment stems from the EU, there are over 1,000 European companies that are active in SA, with 350,000 direct jobs created. That’s the larger context,” Kramer said.
EU imports from SA were worth $26.97bn during 2022, according to the UN Comtrade database on international trade.
Delivering the keynote address at the jobs expo, Nxesi admitted that youth unemployment is a “major challenge”.
Youth remain vulnerable
He said that young people remain vulnerable in the labour market and pose the “greatest risk to social instability in the country”.
Nxesi characterised joblessness as a structural phenomenon that is not unique to SA. “Many countries are experiencing a similar problem.”
Nxesi, whose department is tasked with tackling unemployment, said fixing the crisis should not be his department’s responsibility alone. The private sector too has a role to play, the minister said.
The jobs expo is aimed at creating an opportunity for job seekers to meet prospective employers and organisations/ departments that might put them in reach of employment or learning programmes. It ends on Friday.
With Thuletho Zwane
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