Unemployment figures call for entrepreneurial solutions

Statistics South Africa on Tuesday 13 August 2024, published a Quarterly Labour Force Survey (QLFS) for Q2 of 2024. The survey shows a 33, 5 % increase in unemployment compared to 32.9 % experienced in Q1. Employment decreased by 92 000 in the second quarter of 2024, following an increase of 22 000 in the first quarter of 2024. The number of employed persons increased from 14,1M in Q2:2020 (COVID inception) to 16,7M in Q2:2024. Further comparison to Q1 of 2024 indicates that the expanded unemployment rate in Q2 of 2024 increased by 0, 7 of a percentage point to 42, 6%, with employment decreases mainly in the Trade, Agriculture, and Private household industries.

Employment losses were observed across several sectors in Q2 2024. The formal sector saw a decline of 77 000 jobs, while the agricultural sector lost 45 000 positions and private households experienced a reduction of 18 000 jobs. In contrast, the informal sector saw a rise of 48 000 jobs during the same period. The trade sector reported the most major employment drop, losing 111 000 positions, followed by agriculture. The construction sector lost 11 000 positions. Conversely, the manufacturing sector experienced an increase of 49 000 jobs, community and social services added 36 000 positions, and utilities, transport and mining saw modest gains of 9 000, 3 000 and 2 000 jobs, respectively.

That translates to 158,000 South Africans who lost their jobs over the last three months and 462,000 over the last year. As things stand, 8, 3 million South Africans are now without work.
According to StatsSA, the expanded unemployment rate paints an even bleaker picture. The real rate of unemployment, including those discouraged and economically inactive, now stands at 42, 6% nationally, an increase of 0, 7% over the last quarter and 0, 5% over the last year, this despite a growth in total employment by 306,000 persons since Q2:2023. Young South Africans between the ages of 15 to 34, it is reported that 44, 2% of our youth are currently economically inactive.

Combined efforts the solution

Leaders in business are calling for their counterparts in government’s small business development departments to continue to support and empower entrepreneurs and cut prohibitive red tape, all vital ingredients to a healthy and growing economy. Expanding support for SMMEs and addressing the challenges they face could significantly increase their contribution to job creation and economic development in the country.

In FASA’s 45 year history, their mandate has been to nurture the entrepreneurial spirit that is at the heart of every franchisor and franchisee and to ensure that this phenomenal business system continues to enrich whilst contributing to job creation and to the economy. With an estimated turnover generated for 2023 of R999 billion, a 36% increase over the figure of R734 billion which is equivalent to 15, 0% of the total South African GDP of R6 660 billion in 2023, through its network of over 700 franchisors and almost 68 500 franchisees and employing close to half a million people, the franchise sector can be proud to have played such a big role in contributing to skills transfer and employment.

But more can be done… as the outcome of the recent meeting of CEOs that make up the business leadership alliance with President Ramaphosa indicated. Their mandate is to work with the government and other social partners, to step up, lead and help create and deliver sustainable solutions for South Africa.

According to CEO Fred Makgato, FASA supports this public/private initiative and is prepared to play its part in turning the tide towards harnessing entrepreneurship. “Whilst we are concerned with the recent unemployment figures, we believe that, on the back of our sector’s strong survey statistics, and with government’s buy-in, we can play our part in keeping the wheels of business and entrepreneurship turning, stimulate new business concepts, create jobs and play a part in the skills development of all South Africans.”
For more information visit www.fasa.co.za