Mass unemployment threatens South Africa
Residents of the Alexandra township in Johannesburg read informative leaflets on the coronavirus, April 27, 2020. MARCO LONGARI / AFP
By: Claire Bargelès Follow
The economic crisis following the coronavirus epidemic raises the specter of mass unemployment in different countries of the world. In the United States, 25% of the population could find themselves unemployed. China, accustomed to full employment, should also face it. The African continent will probably not be spared, and in particular the South African giant, already in bad shape before the pandemic. The country started the year by entering a recession and 29% of the population was already unemployed. President Cyril Ramaphosa announced Sunday, May 24, a further reduction of containment measures from June 1. But the outlook for the post-crisis is bleak for workers in the country.
Judith and her friend installed their chairs on the sidewalk of the township of Alexandra. Idle, they wait for time to pass:
“ We used to work, but not anymore. I had a little job in recycling, but with the confinement it's over. So I stay there all day. "
Like Judith, Sello has not yet received compensation from the government. Since March, his company has no more electrical installation work to give him, and he no longer receives anything from his salary of 500 euros. He came to queue again before the offices of the unemployment benefit fund:
" Because of the coronavirus, many places have closed, so I have no more contracts. But I have children, I have bills to pay! And when we come here, with the right documents, to recover aid for which our company has contributed, it is impossible. I don't even know if I will find my job afterwards, because we depend on other companies, and their needs. "
Despite difficulties, the benefit fund has so far paid almost € 730 million to more than 2.5 million workers. The government has also put in place measures to support businesses. Many will be able to resume their activity from June 1. This lifting of the restrictions is essential for Cos Coovadia, director of the employers' organization BUSA:
" It is especially the smallest companies that are at risk, that is why it is very important to revive the economy as quickly as possible, without of course compromising the health of the inhabitants. "
The crisis is also collapsing large companies that were already in trouble, such as the retail giant Edcon, or the public company South African Airways. For the economist Kevin Lings, the country will have trouble recovering:
“ The situation is now very worrying. Growth for this year could decline by 9-10%. This means that we will see a new jump in the unemployment rate. It is estimated that over 12 months, South Africa should lose roughly 2.1 million jobs. And we should witness corporate bankruptcies. So once the epidemic is under control, all of the government's efforts will surely focus on restarting the country's economic growth and creating jobs. "
Rating agencies like Standard & Poor's are not much more optimistic and are worried about the weight that the measures are putting on the country's financial situation.
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