SA's definition of employment needs to be rethought to include informal sector, says Capitec CEO
Gerrie Fourie says a complete rethink of our metric, to include self-employed people, would drastically lower our unemployment rate.
Barber at work in Cape Town. Wikimedia Commons/Pierre F. Lombard
The Money Show's Stephen Grootes is joined by Francois Viviers, Group Executive for Marketing and Communications at Capitec Bank.
South Africa's official unemployment rate stands at a staggering 32,9%; and it's even higher if the expanded definition is applied.
It's seen as one of our biggest obstacles to economic growth.
But are the Stats SA figures skewed because of the way employment and unemployment are defined?
Capitec CEO Gerrie Fourie has suggested a complete rethink of our metric, to include the informal sector.
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He's quoted by BusinessLIVE as saying that when self-employed people are included, the country's unemployment rate is probably actually 10%.
A follow-up article shows Parks Tau - Minister of Trade, Industry and Competition, in seeming agreement with Fourie.
'Tau said the role the informal sector played in driving economic activity and supporting livelihoods had arguably been understated for a long time.'
Francois Viviers, Group Executive for Marketing and Communications at Capitec Bank, sketches the background to the bank's belief that our unemployment metric should be rethought.
"We have a big challenge but also a big opportunity in this country to drive and collectively work to drive growth, but in order to do that we really have to UNDERSTAND what is the true nature of the economy so that we can tackle the challenges and barriers to growth."
Francois Viviers, Group Executive: Marketing & Communications - Capitec Bank
Stats SA's numbers and specifically the way that unemployment is measured, does not stack up with what they see in their own client data as well as some other market research, Viviers says.
"We see a lot more activity in the informal economy, specifically the township economy, across ALL sectors that is driving economic behaviour. And we think if that is properly understood, then collectively we can work together as regulators, as government and as private sector to say: How do we enable those industries to grow further?"
Francois Viviers, Group Executive: Marketing & Communications - Capitec Bank
Viviers cites specific figures from Capitec's own client base of 24 million to back this up.
"This paints a very different picture to what we see in the official statistics."
Francois Viviers, Group Executive: Marketing & Communications - Capitec Bank
Scroll up to the audio player to listen to this intriguing conversation