Finance, Economic Development, Environmental Affairs and Tourism MEC Mlungisi Mvoko wishes to welcome the decline in the unemployment rate in the province. The decline is significant as it reflects a continuation of the labour market recovery from COVID-19 lockdowns, but the province is not out of the woods as the third wave starts to emerge.

This follows the statistical release of the Quarterly Labour Force Survey by Stats SA for the first quarter of 2021. The survey shows that EC labour force is increasingly growing, in the midst of an increasing trend in unemployment growth. The Eastern Cape (EC) province created 65 thousand more jobs from 1 236 thousand in observed in 4Q2020 to 1 301 thousand in 1Q2021. Employment by formal (non-agriculture) increased by 37 thousand and is the leading sector, followed by informal (non-agriculture) jobs with a rise of 23 thousand jobs and lastly households with 5 thousand. Over the same period, Non-Metro, Buffalo City and NMB accounted for 25 thousand, 19 thousand, and 21 thousand, of these jobs additional, respectively.

From an industry perspective, the top three industries that created most jobs were finance, trade and households. However, on an annual basis the province is still lagging behind, as employment exhibits a decrease of 81 thousand when compared to the same quarter of the previous year. Worst performing industries are construction industry with a decline of 49 thousand jobs, trade sector declined by 24 thousand as well as manufacturing and government with a decline of 19 thousand each, year-on-year.

This strongly suggests that the province has not yet fully recovered from the impact of the Covid-19 pandemic. Also, a significant number of jobs was created in the informal sector (non-agriculture) especially in the two Metro’s of the province within the reviewed period. Whilst we are welcoming the increase in employment in the Province, we note that its unemployment rate is still above the national average as the absorption rate in the province is quite low, sitting at 29.8 percent quarter-on-quarter (q-o-q), and is equivalent to 8.2 percentage points lower than the national average of 38.0 percent q-o-q. This signifies the need for the province to absorb and create more sustainable job opportunities.

To address this and improve absorption rate, we need additional private investment particularly in rural regions beyond social infrastructure. Also, new and cost-effective initiatives as well as the quick implementation thereof are required to creating employment opportunities to attain increased absorption across the region. Capacity can be built, and more low-skill jobs can be created through revitalizing irrigation schemes for commercial agricultural activities. One way to realize this, is to increase the public capital infrastructure investment (currently accounting for less than 10 percent of the total provincial budget), by reprioritizing spending towards investing more in infrastructural projects in its industrial parks and special economic zones to attract more private investment, the task that the province is seized with. Reinvestment and support towards reskilling and upskilling of the workforce to ensure the right skills are available specifically in sectors that are more labor-intensive.

As government of the Eastern Cape, we remain preoccupied with the task of growing the economy and creating jobs as guided by the Provincial Economic recovery Plan. The plan emphasizes infrastructure investment both by government and the private sector, promoting industrialization and sector development, promoting equitable and inclusive transformation, accelerating digital transformation and utilising public finance as key drivers of our recovery efforts. 

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