South African Economy Underwhelms in the First Quarter

South Africa’s economy fell short of expectations in the first few months of 2015, growing at an annual rate of 1.3 percent, a stark contrast to 4.1 percent growth from the previous quarter. Analysts forecasted GDP growth of at least 1.7 percent.

South Africa’s economy fell short of expectations in the first few months of 2015, growing at an annual rate of 1.3 percent, a stark contrast to 4.1 percent growth from the previous quarter. Analysts forecasted GDP growth of at least 1.7 percent.

South Africa’s economy suffers from a variety of problems, but unemployment is the largest concern. The unemployment rate rose to 26.4 percent, an increase from 24.3 from the last quarter. People who stopped searching for work expanded to 36.1 percent, which is an increase from 34.6 percent in the last quarter. Many economists believe that young people 25 and under are unable to find unemployment.

Overall, 5.535 million people are without work, and the future of South Africa’s job market remains dire for the foreseeable future. South Africa is undergoing a severe drought that has hampered crop production, placing many people out of work. Members of the government are frustrated by the lack of job growth, with mining minister Ngoako Ramatlhodi expressing concern over the nation’s job slashes in the mining industry, and it is a topic he wishes to address with companies and unions, according to Reuters.

Societal Strife

The unemployment situation is dire to the point where chronic joblessness has caused social unrest and violence. Thousands of people were forced from their homes as rioters destroyed businesses owned by foreigners from places such as Somalia and Zimbabwe, and seven foreigners were murdered in the past few weeks. Many in South Africa believe that foreigners have filled valued jobs, fueling rampant xenophobia.

However, jobs remain scant for foreigners and locals, and many are frustrated by the government’s failure to address the unemployment situation, including other issues such as housing and sanitation. There have been over 15,000 protests since 2014, and though not all the demonstrations have been violent, there has been a significant uptick in protest violence. There is little sign of change on the horizon, as the nation’s ruling party, the African National Congress, won 62 percent of the vote in the 2014 elections, with South African President Jacob Zuma winning a five-year term.

Power Problems

So far, the current government seems unable to address the concerns of the populace, and issues such as power cuts will continue to be a problem. The country suffers from routine power outages that hold back output in mines and factories. According to a cabinet minister within the government, people can expect at least three more years of power outages. The current outage situation is the worst since 2008, but the country’s sole nuclear plant expects to add over 900 megawatts to the national grid as May ends.