The storm over the true rate of unemployment intensified this week as statistician-general Risenga Maluleke accused Capitec CEO Gerrie Fourie of spreading “statistical fiction”.
In a strongly worded opinion piece, Maluleke said the likes of Fourie were insulting the jobless by maintaining that unemployment is closer to 10% than the official 32.9% rate given by Stats SA.
“When public discourse strays into statistical fiction, we must bring it back to fact,” he wrote. “The idea that our unemployment rate is ‘really’ 10% not only undermines sound policy planning; it insults the millions of South Africans who wake up each day still desperately seeking work. It will be one of the biggest mistakes to assume that our country is not facing an unemployment challenge.”
Fourie told Business Day in an interview last week that Stats SA needed to rethink its unemployment metric, arguing that when informal sector activity was taken into account, the figure of 32.9% overstated the jobs crisis.
“The unemployment rate is probably actually 10%. 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,” Fourie said.
In a separate interview with News24, he said Capitec’s 400 township branches provided a deep source of data.
“I go in on a regular basis, and then I see this magnitude of trade and entrepreneurship and people doing things. With respect, many South Africans who are living in urban areas have never been, or have not been for a long time, to places like Tembisa or Vosloorus. Some of our policymakers are not close enough to the market to understand what’s happening.”
The Capitec boss said Stats SA did not take account of people who received an income by, for example, renting out backrooms in townships or running other informal businesses.
But Maluleke defended the Stats SA methodology, saying the quarterly labour force survey (QLFS) was a nationally representative, household-based survey that captured labour market activity across all segments, including the informal sector.
“Credible statistics agencies worldwide adhere to internationally acclaimed methods to conduct their surveys, and Stats SA is no exception. Any deviation from such practice by design or incompetence would lead our nations astray.”
He cited the QLFS for the first quarter of this year, which concluded that 3.3-million people were operating unregistered businesses, often without formal premises. “The QLFS captures this activity in great detail through targeted questions about business registration, size and tax compliance,” he said.
It will be one of the biggest mistakes to assume that our country is not facing an unemployment challenge.
— Risenga Maluleke, statistician-general
He dismissed Fourie’s 10% estimate, saying such a low rate would rank South Africa among the world’s most economically successful countries.
“We also count self-employed persons. These are individuals running businesses, with or without partners. These are not ‘missing’ from our figures; they are clearly documented under status in employment categories in line with International Labour Organisation (ILO) definitions.
“In the first quarter of 2025, 1.9-million South Africans were recorded as own-account workers. Another 953,000 were employers. Together, they form a significant chunk of the employed, and they are absolutely part of the labour force numbers. There is no statistical black hole here,” Maluleke wrote.
Fourie’s comments have sparked a raging debate, with economists and analysts weighing in on both sides of the argument.
Two ministers are among those who appear to agree with him.
Minister of trade, industry & competition Parks Tau told parliament the role of the informal sector in driving economic activity and supporting livelihoods had arguably been understated and the government should optimise the informal sector’s economic impact.
“This point has been raised by various other quarters with regard to what we should calculate and what we shouldn’t calculate. I also hold the view that there is a significant undercount, particularly if you take into account the informal sector,” Tau said.
“It’s something that we should all collectively be engaging in resolving so that we are able to acknowledge the informal sector, but also reinforce the support mechanisms for what is a major contributor to employment in the country.”
Nomakhosazana Meth, the minister of employment & labour, said in an opinion piece published by News24 this week that South Africa needed “new tools to reflect the realities on the ground”.
She suggested combining the QLFS with indicators such as mobile money flows, anonymised bank transaction data and digital platform work patterns to understand the informal economy’s contribution to jobs.
GG Alcock, an entrepreneur and author of KasiNomics — a book that explores the impact of the informal economy in townships — said it was wrong to assume that the informal sector consisted largely of survivalist or subsistence businesses.
He said the majority of businesses have been operating for many years and are often multigenerational family enterprises.
“Every sector in the formal economy is represented in the informal economy,” he said. “From retail to fast food to rental — both business and residential — to kasi mechanics and panel beaters, beauty [salons], internet cafes, construction, manufacturing ... the bakkie brigade, a thriving bakery sector, events services, and, and, and...”
Alcock said turnover varied widely across these businesses but even a vetkoek trader at a taxi rank could sell between 500 and 1,000 amagwinya a day for about R1.50 each, making a turnover of between R1,000 and R2,000 a day, with a profit margin of up to 40%.
He said a decent outlet selling kota (a bread sandwich stuffed with chips, cheese, polony and Russians) could generate a turnover of up to R150,000 a month with a margin of 15% — 20%. “These are not subsistence businesses,” he said.
Alcock also cited the backroom rental business, which he described as a R30bn a year enterprise. Many people who Stats SA might categorise as unemployed were earning between R1,500 and R2,500 a room in monthly rentals, with an average of three rooms per home.
“Are they unemployed? Yes, they are, but they are earning an income from a business no different from an Airbnb in Sandton. Are we recognising businesses like these?” he asked.
Frank Blackmore, lead economist at KPMG, said people on both sides of the argument raised valid points, but the key was to study the data that was available.
“We don’t see Capitec data, so we can’t see what he [Fourie] is seeing. Stats SA has sort of responded to say they take the informal sector into account. If you look at the QLFS, they have the formal and informal split out in the data.
“The problem is more South Africa-centric. Remember, you have a working-age population that is under 65 years of age, but I know people personally who are working well into their 70s out of necessity. Those things are not caught up by the formal statistics and will not be taken into account when calculating official employment,” Blackmore said.
Izak Odendaal, chief investment strategist at Old Mutual Wealth, said Stats SA was doing a “credible job” and adhered to global best practice.
“I don’t think that we underestimate the size of the informal sector more than other developing countries [do]. Ultimately, all these measures try to capture a specific thing, and no single measure, such as the unemployment rate, tells the whole story,” Odendaal said.
Maluleke said Stats SA data was not based on “gut feel or political posture”.
“The official unemployment rate is calculated based on three clear criteria: a person must not be employed, actively looking for work, and available to start work. This is the internationally accepted standard that most countries adopt.
“Using this measure, South Africa’s official unemployment rate was 32.9% in Q1 2025. If we add those who have given up looking — discouraged job seekers — the expanded rate rises to 43.1%. This is not a statistical error. It is a painful truth,” he wrote.
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