Cape Town recorded 46,000 net job losses in Q1 of 2024, according to data from Statistics South Africa. The job losses come at a time when the city is trying to use the city’s tech hub status as an employment driver.
Western Cape, the province Cape Town falls under, also recorded the worst net job losses in South Africa at 17,000.
Despite the growth of South Africa’s technology industry, the sector is still not contributing significantly to the country’s job creation mandate. In Q1, finance and trade created the most jobs in the country, a combined 450,000 jobs. Technology on the other hand created less than 10,000 jobs.
South Africa’s 33% unemployment rate is the highest in Africa. The country has in the past echoed sentiments of using technology as a driver of unemployment creation but so far, this is yet to materialise. Last month, the country introduced a digital nomad visa to attract foreign tech talent, in the hopes the surge will boost employment in other sectors of the economy.
Cape Town is widely considered one of Africa’s leading tech hubs, attracting dozens of technology professionals from within the continent and the world. The tech hub status, as statistics show, is however yet to create significant employment for local populations and the city will be hoping the visa will change this.
The city of Cape Town government is a proponent of South Africa’s digital nomad regulation as it sees digital nomads driving employment creation. Opposers of the visa on the other hand expressed concerns that although the visa might increase economic activity and hence employment opportunities, its net value is likely to be negative.