Durban: Unemployment in eThekwini is at an all time high, with 40% of the city’s adult population having given up looking for work.
The city’s unprecedented unemployment crisis is documented in a detailed report delivered by city officials during a webinar on the state of the city’s economy organised by the Durban Chamber of Business yesterday.
The unemployment rate in the city is at its highest rate since the city started tracking these statistics six years ago. It was also revealed that four of every 10 people able to work were unemployed and have given up on looking for jobs.
Tshegang Chipeya, senior research advisor at the Economic Development Unit in the eThekwini Municipality delivered the overview report titled the State of The Economy.
The report revealed myriad challenges facing the city ranging from unemployment, the battered tourism industry and the declining investment in the construction sector by domestic investors.
Chipeya spoke on the issue of unemployment, saying the city was faced with a high rate of unemployment, with the number of those unemployed, but who have given up on finding jobs approaching 40%.
She said unemployment in Durban is currently standing at 26%, which is up from 20.6%, while the number of unemployed people is at 376 000 (up by 84 000). People who are unemployed and have given up looking for work is standing at 36.9% which is up from 34.9%.
Chipeya also revealed that the number of employed people in Durban were 1.07 million (down by 51 000), while the likelihood of being employed in Durban is at 42.7% (down 5%). Youth unemployment, said Chipeya, was at 31.5%.
She attributed the high unemployment rate to a combination of factors, including the under-performing economy, worsening Covid-19 situation, and unskilled workforce which leaves people unemployed and unemployable.
On the tourism sector, she said a lot of work had gone into reviving this sector.
“The Durban tourism sector is integral to the city’s economy and had taken quite a significant knock, especially leisure tourism, we have seen occupancy up to around the 50% mark which is the lowest in years. It’s better than last year but 50% is quite a challenge for the city and what has been driving these occupancy is mainly business tourism.
“So a lot of work had been done in the tourism sector, including attracting visitors back to Durban, but the looting did not help. A lot of work has gone to attracting visitors from provinces such as Gauteng,” she said, adding that tourism figures will improve significantly once people have been vaccinated.
On the construction sector, Chipeya said: “The good news is that we do have R6.9 billion planned in investments in the economy just in terms of construction applications received this year.”
She also touched on the impact of the looting on business performance in the city, based on the response to a survey conducted.
The survey found that 7 out of 10 businesses committed to keeping their investment in the city, saying it could take between one to three months for them to become operational again.
Chipeya said 30% of the businesses that were affected by the July unrest have either stated that they were unsure about staying, or were forthright in that they do not intend to rebuild in Durban.
The 30% raised security concerns, stating that they could stay in the city if safety and security was improved.
The report stated that due to the unrest 91 000 jobs were at risk, R40 billion was lost in stock, there was R15bn in property damage, equipment and machinery with a value of R20bn was lost and 16 000 businesses were affected by the looting.
She said among the positive projects the city has implemented was investment in the renewable energy sector which she described as an area of growth, adding that the municipality had put out a request for interest on IPPs (Independent Power Producers) for 400megawatts. This, she said, would attract significant interest and would create growth.
“Tech and innovation present inherent opportunities for economic growth which are essential for the city’s future,” he said.
Chipeya said these were presenting an opportunity that the city should take advantage of.
“EThekwini’s economy is forecasted to grow at under 5% this year. However, this is optimistic. Looting has been devastating to the progress made by the economy and a significant drive is required to rebuild the city. Questions remain over the nagging issues resulting in the decline in real investment by domestic private sector in the city’s economy,” she said.
Professor Irrshad Kaseeram, a lecturer on economics from the University of Zululand, said the current unemployment challenges in Durban could be temporary as the city was competitive, adding that of the three big metros in the country, Durban had the lowest unemployment rate for the longest time.
He said the country as a whole was faced with the unemployment issue and the current labour policies have failed to allow for the economy to absorb semi-skilled and unskilled workers.
“Labour policies often favour and protect those that are employed and leave out those who are unemployed, and the high cost associated with dismissing a worker has left many unwilling to hire and to hire the youth, because they do not want to take the risk that they might not perform and will be stuck with them.”
The Mercury