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South Africa – High unemployment a result of apartheid

10 July 2013

Apartheid laws are to blame for South Africa’s high level of unemployment, according to Johannesburg chief representative of the Bank of Tokyo Mitsubishi UFJ, Mr Yoshiro Yokoi. Speaking in Japan in May, Mr Yokoi said, “If everyone had access to education back then, we would not have this high unemployment rate.”

According to an article on moneyweb, while apartheid accounts for much of the inequality in employment in South Africa; post-apartheid policies have done little to improve the employment situation. The close relationship between the government and the trade unions has led to a series of labour regulations that are very nice for those who have a job, but make hiring new staff unappealing for employers.

The Black Economic Empowerment programme launched by the South African government to redress the inequalities of apartheid, while important for redressing employment imbalances, have proven burdensome and confusing. Legislation that requires entire industries to accept the outcome of wage negotiations between large employers and trade unions, as well as tough restrictions on hiring and firing, have also discouraged job creation.

There is no doubt that apartheid has left a particularly challenging legacy in South Africa. Under apartheid, most South Africans did not have access to standard education, couldn’t start businesses, and were unable to borrow money at fair rates. Significant differences in employment levels still exist as a result of these restrictions; with unemployment for black South Africans in Q4 2012 at 28.5%, compared with 5.6% for white South Africans. Coloured and Indian Asian South African unemployment levels were 23.5% and 13% respectively, according to the Quarterly Labour Force Survey from Statistics South Africa.

Apartheid created a number of structural problems in South Africa, according to the moneyweb article; however, during the years after apartheid more could have been done to address the urgent problem of employment. While apartheid must shoulder most of the blame for South African unemployment, the African National Congress (ANC) led government cannot escape its share.      

To read the full article, please click here.


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