The wobbly economy has raised the stakes ahead of local elections on August 3 which analysts say will be the sternest political test that the ruling African National Congress has faced since coming to power in 1994.
Data released on Monday showed unemployment had risen to 26.7 percent in the first quarter.
Forecasts for growth in Africa’s most industrialised economy have fallen to below 1 percent for 2016 as a global commodity slump drags on and rising inflation curbs domestic spending.
“Cabinet has taken a decision to draft a plan to develop least developed parts of the country in an attempt to stimulate the economy, especially among the uneducated youth,” cabinet minister Gugile Nkwinti told a media briefing.
Nkwinti said the government would focus more on technical education for youth in the country to improve employment.
South Africa, one of the world’s biggest metals producers, has been hit by a slide in commodities prices which has come on top of widespread labour unrest in the mining industry.
Moody’s late on Friday left its rating of South Africa debt unchanged, but the other big ratings agencies are expected to release their own reviews in the coming weeks.
Speaking at the same briefing, minister Nosiviwe Mapisa-Nqakula said the cabinet would soon propose new legislation to address racism and hate speech.
A white South African judge was this week accused of making racist comments in the latest incident in a series of race rows that once again drew attention to enduring racial tensions more than two decades after white minority rule ended.
High Court Judge Mabel Jansen was put on special leave by the justice minister while the complaint against her is investigated. Jansen has said her comments were taken out of context.