Africa

South Africa economy in “precarious” position – official

South Africa Statistician General Pali Lehohla said on Monday the country was in a “precarious position’’ of not creating enough jobs to make a dent in poverty.

Lehohla said in Pretoria that the real economy, which included mining and manufacturing, was not creating enough employment.

“We are in a very precarious position as South Africa in as far as exiting poverty. The type of strategy that can make us exit poverty is when people are working,’’ Lehohla said.

“This kind of poverty cannot be resolved by social grants and the like. That type of poverty is solved if people are doing work and being productive.”

Chief economist for Africa at Standard Chartered, Razia Khan, said agriculture and mining were the only sectors that grew meaningfully in the first quarter of this year but actually experienced job losses in the second quarter.

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“With a significant uplift to growth performance unlikely to be on the horizon just yet, there is little to suggest a meaningful pick-up in job creation for some time,’’ Khan said.

The unemployment rate remained unchanged at 27.7 per cent of the labour force in the second three months of this year.

According to data from the statistics office, the absolute number of unemployed went down slightly to 6.177 million from 6.214 million.

South Africa’s economy sunk into recession and had its credit rating downgraded to junk by two of the three main credit rating agencies.

In July, the statistics office said nearly a fourth of all households are in poverty.

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Although economists expect positive growth in 2017, but warned that political turmoil and regulatory uncertainty will continue to hamper investor sentiment.

President Jacob Zuma faces a no-confidence vote in parliament on Tuesday brought by opposition parties.

The ruling African National Congress says its members would rally behind Zuma and vote against the motion.

The rand, however, shrugged off the unemployment print, with market focus on the no-confidence motion against Zuma.

At early trading, the rand exchanged at 13.4025 per dollar, 0.13 per cent firmer than its close on Friday.

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