South Africa’s unemployment hits 8.5 million as foreign businesses face rising tensions

South Africa's unemployment rate has reached its highest level in four years, with 8.5 million individuals now without jobs, reflecting a worsening labor market and a hostile environment for foreign-owned businesses. Statistics South Africa (Stats SA) revealed these figures in its Quarterly Labour Force Survey (QLFS) for Q2 2026, showing the official unemployment rate climb to 33.6%, up from 32.7% in Q1 2026. The survey, which examines labor market conditions from April to June 2026, focuses on people aged 15–64 years.

The worsening labor market coincides with growing anti-foreigner sentiment and xenophobic attacks in the country, leading to the departure of numerous foreign nationals, including Nigerians. Some Nigerian-owned businesses have shut down or relocated, contributing to concerns that the challenging investment climate could hinder employment and small-business activity.

Stats SA reported that the working-age population increased by 121,000 (0.3%) in Q2 2026 compared to the previous quarter, while employment declined by 16,000 to 16.7 million. The number of unemployed people rose by 345,000 to 8.5 million, pushing the labor force up by 329,000 (1.3%) over the quarter.

Employment losses were observed in the formal and household sectors, while the informal sector saw modest growth. The rise in unemployment elevated the official unemployment rate by 0.9 percentage points, and the labor absorption rate decreased to 39.6%. Job losses were primarily in community and social services and mining, with trade and construction industries experiencing some hiring.

Although Nigeria's official unemployment rate is not publicly released, it is estimated at 4.9% following a labor market metrics rebasing. The latest labor market data adds to South Africa's challenges in its fragile economic recovery, as policymakers face mounting pressure to support investment and employment while managing inflation risks and interest rate concerns.

The South African Reserve Bank maintained its benchmark interest rate at 7% the previous month, hinting at potential further tightening if inflationary pressures escalate.