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

South Africa’s unemployment rate has climbed to its highest level in four years, with the number of unemployed people rising to 8.5 million, highlighting a further deterioration in the country’s labour market amid economic headwinds and a tense climate for foreign-owned businesses.

The latest figures were released on Tuesday by Statistics South Africa (Stats SA) in its Quarterly Labour Force Survey (QLFS) for the second quarter of 2026, which showed the official unemployment rate rising to 33.6%, up from 32.7% in the first quarter of 2026.

The report covers labour market conditions between April and June 2026.

The QLFS is a household-based survey that collects data on the labour market activities of people aged 15 years and older living in South Africa, although the report focuses on those aged 15–64 years.

The worsening labour market comes at a time when South Africa has experienced sustained anti-foreigner sentiment and xenophobic attacks that have driven many foreign nationals, including Nigerians, to leave the country.

Several Nigerian-owned businesses have reportedly shut down or relocated, with some of the affected entrepreneurs employing South Africans, adding to concerns that the hostile investment climate could weigh on employment and small-business activity.

What the data is saying

Stats SA said the working-age population increased by 121,000 (0.3%) in the second quarter of 2026 compared with the previous quarter, while employment continued to weaken.

The number of employed people fell by 16,000 to 16.7 million, whereas the number of unemployed people increased by 345,000 to 8.5 million. As a result, the labour force grew by 329,000 (1.3%) over the quarter. Employment declined in the formal and household sectors, while the informal sector recorded modest growth.

• “During the same period, the number of employed individuals decreased by 16,000 to 16.7 million, while the number of unemployed persons grew by 345,000 to reach 8.5 million,” Stats SA said.

The agency said the rise in unemployment pushed the official unemployment rate higher by 0.9 percentage points, while the labour absorption rate edged lower to 39.6%.

Get up to speed

The latest figures represent a further deterioration from the first quarter of 2026, when South Africa’s unemployment rate had already risen to 32.7% from 31.4% in the fourth quarter of 2025, a trend that Nairametrics previously reported.

• The second-quarter reading marks the highest unemployment rate since 2022, with the number of unemployed increasing from 8.1 million to 8.5 million.
• The data captures the first full quarter after the Middle East conflict that began on February 28, which pushed up global energy prices and strained household budgets. The South African Reserve Bank also raised interest rates in May in an effort to contain inflation, creating additional pressure on investment and consumer spending.

Employment losses were concentrated in the community and social services and mining sectors, while the trade and construction industries recorded job gains.

What you should know

Although Nigeria’s unemployment rate has not been officially released since November 2024, it is estimated at 4.9% following a rebasing of the country’s labour market metrics.

• The South African figures are likely to reignite debate over the country’s treatment of foreign investors and entrepreneurs. Following repeated xenophobic attacks, many Nigerians have called for an economic boycott of South Africa.
• Among the most vocal has been Air Peace Chairman Allen Onyema, who urged Nigerians to withdraw investments and avoid supporting the South African economy, arguing that economic pressure would be a stronger and more peaceful response than confrontation.

The latest labour market data also poses a setback for South Africa’s fragile economic recovery. With 8.5 million people unemployed and job creation weakening, policymakers face growing pressure to support investment and employment while balancing inflation risks and interest rate concerns. The South African Reserve Bank kept its benchmark rate at 7% last month but signalled that further tightening remains possible if price pressures intensify.