Private Sector Growth Key to Job Creation

South Africa must shift its focus from short-term public sector job creation to fostering private sector-driven economic growth, according to the Foundation for Rights of Expression and Equality (Free SA).

The latest Quarterly Labour Force Survey (QLFS) for Q4 2024 revealed a slight drop in the official unemployment rate from 32.1% to 31.9%. However, South Africa remains among the top five countries with the highest unemployment rates, far above the global average of 5%.

The Need for Private Sector Growth

Free SA argues that the government’s reliance on public sector employment and state-led job schemes is costly for taxpayers and fails to drive sustainable economic growth. Currently, 73.3% of South Africa’s workforce is employed by the private sector, yet its potential for job creation is hindered by restrictive regulations, policy uncertainty, and failing infrastructure.

Global success stories such as Singapore and South Korea demonstrate that prioritizing private sector job creation leads to long-term economic prosperity. Small and medium enterprises (SMEs), in particular, need fewer barriers to growth and excessive government intervention.

A Sustainable Path Forward

Reuben Coetzer, spokesperson for Free SA, highlighted the urgency of the crisis:

“South Africa leads the world in only two things: the rolling maul and youth unemployment. But unlike the rolling maul, youth unemployment has no try-line, no victory—only an ever-expanding scoreboard of despair with each quarterly report.”

While any decrease in unemployment is welcome, Free SA stresses that celebrating small gains while ignoring the larger crisis is dangerous. At 31.9%, unemployment remains a national emergency that requires bold reforms, not government dependency.

Government Must Enable, Not Hinder, Job Creation

Free SA believes the persistent unemployment crisis stems from excessive government control rather than a lack of intervention. Expanding the public sector without addressing inefficiencies, corruption, and unsustainable spending exacerbates the problem.

To create a business-friendly environment and drive private sector job creation, Free SA recommends that the government:

• Cut red tape and reduce policy uncertainty to attract investment
• Reform restrictive labor laws that discourage hiring
• Improve infrastructure to support business growth
• Encourage entrepreneurship and innovation
• Ensure fair competition by tackling corruption and political interference

Without urgent structural reforms, South Africa risks deepening its economic stagnation. Now is the time for decisive action that empowers businesses and entrepreneurs, paving the way for sustainable job creation and economic growth.