South Africa’s unemployment rate drops to lowest level since 2020

South Africa’s unemployment rate fell to its lowest level in more than five years during the final quarter of 2025, driven by job gains in the community and social services and construction sectors.

Statistics South Africa reported that the jobless rate declined to 31.4% for the three months ending in December, down from 31.9% in the previous quarter. The figure came in lower than the 31.7% forecast by economists surveyed by Bloomberg.

While the decline offers a modest boost to Africa’s most industrialised economy, unemployment remains stubbornly high. The country has consistently recorded jobless rates above 30% since the peak of the pandemic in 2020, with approximately 8.4 million people actively seeking work.

South Africa’s economy, estimated at $410 billion, is the largest on the continent, according to Statista’s 2025 GDP comparison. This economic scale underscores both the country’s potential and the immense pressure it faces to generate employment for millions of job seekers.

Government response

In October, the government announced plans to deploy a 2.5 billion rand ($135 million) Youth Fund to provide loans and support small businesses. The initiative forms part of broader efforts to address structural unemployment.

The country has also intensified deportations of undocumented migrants as economic pressures mount and public frustration over joblessness grows. South Africa continues to attract workers from across the region, particularly from Zimbabwe and Mozambique, reflecting its status as a regional economic hub.

President Cyril Ramaphosa reiterated last week his commitment to accelerating reforms aimed at spurring economic growth, attracting investment, and enhancing public sector efficiency. Analysts suggest these measures, if fully implemented, could support sustainable job creation.

Finance Minister Enoch Godongwana is expected to provide further details on the government’s strategy when he presents the annual budget on February 25.

Adekunle Agbetiloye is a Senior Reporter at Business Insider Africa with interests in the African economy, technology, energy transition, and climate change.