The Western Cape government says it is partly Donald Trump’s fault that 24,000 people lost their jobs in just three months.
This follows the US president’s decision to cut funding to South Africa’s health and research programmes.
Western Cape Finance and Economic Opportunities MEC Ivan Meyer said this in response to a provincial parliamentary question from MPL Nobulumko Nkondlo.
Nkondlo asked about the reason for the province’s rising unemployment rate and loss of jobs between the fourth quarter of 2025 and the first quarter of 2026.
According to the latest Quarterly Labour Force Survey, employment in the Western Cape fell by 24,000 jobs over the period, while the province’s unemployment rate rose from 18.1% to 19.6%.
Nationally, South Africa recorded about 345,000 job losses over the same period, while the unemployment rate rose from 31.4% to 32.7%.
In his response, Meyer said: “This pattern clearly indicates that the decline in employment in the province forms part of a broader nationwide contraction, rather than being driven by province-specific factors alone.”
He said job losses were spread across the economy, with the formal sector shedding about 20,000 jobs and the informal sector about 13,000.
He also pointed to seasonal factors.
“Employment typically weakens in the first quarter of the year, following increased hiring during the fourth quarter associated with festive season demand,” Meyer said.
“As a result, some of the job losses observed in the first quarter can be attributed to the unwinding of temporary or seasonal employment opportunities.”
However, Meyer also singled out the impact of shrinking international donor funding, including funding from the US.
From a sectoral perspective, the biggest losses in the Western Cape were recorded in community and social services, which shed 63,000 jobs during the quarter.
Nationally, the sector lost 206,000 jobs.
The MEC said the sector depended heavily on donor and public funding and was vulnerable to project closures and funding cuts.
“This sector is heavily reliant on donor and public funding and is therefore vulnerable to reductions in funding, project closures, or the non-renewal of fixed-term contracts,” he said.
“Evidence suggests that global funding constraints may have contributed to job losses in areas such as healthcare and research, further exacerbating employment declines.”
Meyer specifically referenced the fallout from cuts to US funding streams.
These included the President’s Emergency Plan for AIDS Relief (PEPFAR), the largest US HIV/AIDS funding programme in South Africa, as well as USAID health contracts and US Centers for Disease Control and Prevention (CDC)-linked programmes.
Much of this funding does not go directly to government but is instead channelled through non-governmental organisations, universities, and research institutions, which employ thousands of health workers and run HIV and TB-related services, testing, and community outreach programmes.
“For example, a Wits University 2025 study estimated that cuts to PEPFAR and USAID funding had an immediate impact, resulting in over 8,000 skilled healthcare workers losing their jobs,” Meyer said.
“The same study reported that Wits University alone lost R3.2 billion, placing a number of research jobs at risk.
“These developments are likely to have had spillover effects in provincial labour markets such as the Western Cape.”
However, Meyer cautioned that reduced US and international funding was only one part of a broader picture.
He said weakness in manufacturing, construction, and transport sectors, combined with slower economic activity and seasonal employment trends, had also contributed to the rise in unemployment.
“In summary, the drivers of job losses are complex, and the increase in unemployment and the loss of 24,000 jobs in the Western Cape between the last quarter of 2025 and the first quarter of 2026 can be attributed to a combination of factors.
“These include a national economic slowdown, sectoral job losses, structural weaknesses in the labour market, and seasonal employment effects.”
The Western Cape ended the first quarter of 2026 with 2.883 million people employed, down from 2.906 million in the previous quarter.
IOL News
Brandon Nel
iol.co.za