The CEO of Capitec, South Africa’s most popular bank by sheer number of customers, Gerrie Fourie is arguing that the country’s real unemployment rate is “probably actually” as low as 10 percent, which would mean that instead of just over 8 million people without jobs, it would be closer to 2.5 million.
Fourie was speaking to Business Day (paywall) in an article that is now being publically contested by Statistics South Africa (Stats SA).
In the article, Fourie declares that South Africa should rethink its unemployment metrics and claims that Stats SA does not take into account the informal sector in its metrics. The banking boss adds that if self-employed people and people working in the informal sector were counted, the official unemployment rate would drop dramatically.
He said that in some informal sectors in the country, vendors can take home up to R1 000 a day, meaning they actually have gainful employment.
“Just go look at the number of people in the township informal market, who are selling all sorts of stuff, who have a turnover of R1 000 a day,” he said.
“Stats SA doesn’t count self-employed people. I really think that is an area we must correct.”
Stats SA pushes back against Capitec’s claims
Statistician General, Risenga Maluleke, has said Fourie’s claims that the organisation does not count people in the informal sector are “incorrect and misleading.”
“The informal sector is measured, tracked and reported on consistently, and if anything the insights these reports provide should guide and enrich policy, not distort it,” Maluleke explains, per Bloomberg.
“While constructive debate is encouraged, it should be based on solid evidence.”
In 2001, the International Monetary Fund (IMF) said that Stats SA’s methodology and techniques to survey employment in South Africa are “sound and follow internationally accepted practices.”
“However, the survey frame has been based on the old business register, with resulting undercoverage in some activity areas that have potentially large numbers of small unincorporated businesses,” adding that the statistics would be more robust if self-employed South Africans are counted too.
In 2008, Stats SA did just that, with a new method that includes self-employed South Africans and files them under the informal sector if their businesses are not registered, according to this study.
The World Bank agrees with South Africa’s unemployment data too. In fact, both the IMF and World Bank poached a significant number of Stats SA employees last year as the organisation faced budget cuts.
These budget cuts are usually the only criticism that is levied on Stats SA, that its accuracy is damaged by being under-resourced and understaffed. Its 2022 national census received significant criticism over the quality of its data, with the organisation forced to admit that the data it collected for the census was “fundamentally flawed” and “not good enough quality to be released” to the public.
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