WATCH: Are South Africa’s unemployment stats wrong? Capitec Bank data paints an interesting picture…
Capitec Bank CEO Gerrie Fourie is challenging how Stats SA measures unemployment, arguing their figures significantly underrepresent economic activity in the informal sector.
FILE: Job seekers wait on the side of a road holding placards showing their specialisation in Johannesburg, South Africa. Picture: MUJAHID SAFODIEN /AFP
Kfm Mornings with Darren, Sherlin and Sibs chat about Capitec CEO Gerrie Fourie's suggestion that the informal economy should be included in official employment stats.
Watch below:
South Africa’s official unemployment rate stands at 32.9%, with the broader 'expanded' definition reaching 41.9% — a level cited as the highest in the world.
However, Capitec CEO Gerrie Fourie is challenging how the country measures unemployment, arguing that the headline figure significantly underrepresents economic activity in the informal sector.
Capitec Bank’s internal data shows that nearly three million of its customers earn an income that doesn’t come from formal employment, and over a million operate sole proprietorships through their Capitec Bank accounts. This suggests that at least four million people are actively participating in small or informal businesses — roughly a million more than what Stats SA currently captures, even when including informal and self-employed individuals.
“What’s interesting is that we talk about a 32% unemployment rate, but Stats SA doesn’t account for the self-employed,” Fourie said. “That’s an area we need to re-examine. The actual unemployment rate could be closer to 10%. Just look at how many people in townships are running informal businesses, turning over R1,000 a day selling all kinds of goods."
How reliable are these stats? Darren asks while the team joins in on the conversation...
"When you look at a man that's got 24 million customers, that's half of South Africa's population, almost... they know the activity coming in and out of these accounts. But what you've got to look at is the definition of unemployment as well. Let me give you the South African definition..."
- Darren Simpson, Host - Kfm 94.5 Mornings
"... the South African definition is, 'You are employed if you work for another person or entity under specific terms and conditions for remuneration.' So, we would think maybe, you've got a nine-to-five... Monday to Friday... by definition, that means, having a job."
- Darren Simpson, Host - Kfm 94.5 Mornings
"The South African definition of being unemployed is... if you are unemployed and actively looking for a job, you become part of the stats. If you are not looking for a job, they don't count you."
- Darren Simpson, Host - Kfm 94.5 Mornings
"The United States has a 4.5% unemployment rate. The definition of being employed in the United States is, 'Someone is considered employed if they work for an employer or in their own business for at least one hour per week."
- Darren Simpson, Host - Kfm 94.5 Mornings
"So, you can see how they can skew their stats... now, one hour per week if you were working for pay, yes, you would be living in abject poverty but you are gainfully employed... so this is where we can own-goal ourselves with our stats... Is the definition the same all around the world? No, it's not."
- Darren Simpson, Host - Kfm 94.5 Mornings
"It just points to the importance of words and understanding them because what would America's unemployment rate look like if they had defined unemployment by South African standards? We must always make sure we are comparing apples to apples... Is it time for us to broaden our definition of what being gainfully employed means?"
- Sherlin Barends, Host - Kfm 94.5 Mornings
"There's also the reality of how unequal a society we live in and people's very real struggles, which are linked to the employment numbers... There are also so many different types of unemployment... There are people who are educated, have degrees, have actively looked for work for 10 years and then have stopped because they have not been able to find work. Where do they then fall? Do we give up on them completely because there are no opportunities?"
- Sibongile 'Sibs' Mafu, Host - Kfm 94.5 Mornings
"You almost want the government, private sector and the Capitecs to come together to give us the real real numbers because they all have valuable information that can be distributed and shared. I want to hear from Yoco... they are so much of a part of the small businesses of South Africa that make up a lot of these numbers."
- Sibongile 'Sibs' Mafu, Host - Kfm 94.5 Mornings
"This is an interesting debate to watch from the sidelines as all the people with the figures and facts at hand come together and formulate to ask: what's the real number? Are we always as bad as we're made out to be? That's the question."
- Darren Simpson, Host - Kfm 94.5 Mornings