The government has unveiled a R1-billion funding partnership aimed at helping small businesses expand and create jobs, as South Africa grapples with an unemployment rate of 33.6% and 8.5 million people officially without work.
The Unemployment Insurance Fund (UIF) and the National Empowerment Fund (NEF) have each committed R500 million to the new partnership, which is designed to increase access to finance for qualifying enterprises, strengthen businesses with growth potential and support the creation and retention of jobs.
Employment and Labour Minister Nomakhosazana Meth said the partnership brings together the UIF’s employment and labour activation mandate with the NEF’s enterprise finance and development capabilities.
“We are investing in the people who build businesses, take risks, serve customers and create work in our communities,” Meth said.
The initiative comes as the latest Statistics South Africa Quarterly Labour Force Survey shows the country’s official unemployment rate rose from 32.7% in the first quarter of 2026 to 33.6% in the second quarter. The number of unemployed people increased by 345,000 to 8.5 million, while employment declined by 16,000 to 16.7 million.
The youth unemployment rate was even higher, reaching 47.4% among people aged 15 to 34.
Stats SA also recorded a broader labour underutilisation rate of 46.3%, which includes unemployed people, those working fewer hours than they would like and people outside the labour force who have potential to work.
Meth said government was repositioning its Labour Activation Programme around skills linked to real demand, workplace experience and placements, as well as enterprise support for small and medium-sized businesses.
The programme aims to recruit 200,000 unemployed people during the 2026/27 financial year, as part of a medium-term target of 605,000 beneficiaries.
The UIF-NEF partnership is expected to target 30,000 employment opportunities, according to the Department of Employment and Labour.
The launch comes ahead of the government’s planned Job Summit, with small businesses being positioned as a key component of efforts to expand employment.
